Takata close to bankruptcy after massive recalls of its faulty airbags

Posted June 17, 2017

The Tokyo Stock Exchange has suspended trading in shares of Takata following the reports of pending bankruptcy. Takata recorded a ¥79.5 billion ($716 million) loss for the financial.

The major problem now faced by Takata is that, a deal with Key Safety Systems might not become reality until Takata files for bankruptcy, which is exactly what the company has made a decision to do.

Automakers have been going to Takata rivals to get replacement air bag inflators.

According to reports it is expected that the company will first seek bankruptcy protection in Japan; after that its USA subsidiary can then file for Chapter 11 bankruptcy protection in America.

The Japan Times has also reported today that safety officials at Takata and Nissan will be referred to prosecutors on suspicion of professional negligence resulting in injury after a recalled airbag inflator in a Nissan vehicle ruptured in a collision in 2015.

As advocates say "hundreds of thousands" of drivers are behind the wheel of vehicles with defective airbags in places like Riverside County in California, multiple online media reports surfaced this week that the maker of those defective airbags - Takata - is expected to file for bankruptcy this month.

The Michigan-based corporation, which is controlled by a Chinese supplier going by the name of Ningbo Joyson, refused to comment on the arrangement.

Earlier this year an American judge said the costs of replacing all of the faulty Takata inflators could be $8 billion.

In January, Takata agreed to plead guilty to criminal wrongdoing and pay a $25 million fine to resolve a U.S. Justice Department investigation.

Takata is still building replacements required under a recall of around 100 million inflators that could detonate with excessive force after prolonged exposure to heat.

Takata Corp, one of the world's biggest automotive suppliers for airbags, is preparing to file for bankruptcy by next week. As far as airbag inflators are concerned, Takata has proven that it's not cut for this line of business. "Its cost will reach far beyond Takata, weighing on the financials of almost 20 automakers", Brauer continued. It's likely that process will continue throughout Takata's bankruptcy proceedings and will take years to complete. Takata now provides none of the replacement inflators for Honda and Acura vehicles under recall in the USA, according to Chris Martin, a spokesman for the carmaker.