Airbag maker Takata bankrupt

JAPAN’S Takata Corporation, the firm at the centre of the motor industry’s biggest product recall yet, filed for bankruptcy protection in the United States and Japan, and said it had agreed to be largely acquired for $1.6-billion (R20.5-billion) by Chinese-owned, US-based Key Safety Systems.

In the biggest bankruptcy of a Japanese manufacturer, Takata faces tens of billions of dollars in costs and liabilities after almost a decade of recalls and lawsuits.

Its airbag inflators have been linked to at least 16 deaths and 180 injuries around the world because they can rupture and send metal fragments flying.

TK Holdings, its US operations, filed Chapter 11 bankruptcy in Delaware on Sunday with liabilities of $10- to $50-billion (R128.5 to R642.5-billion), while the Japanese parent filed for protection with the Tokyo District Court early yesterday.

TK Holdings chief operating officer Scott Caudill said in a court affidavit that the company faced insurmountable claims relating to the recalls and owed billions of dollars to motor firms.

He said Takata expected to have recalled about 125 million vehicles worldwide by 2019.

Takata’s total liabilities stood at 1.7-trillion yen (R192.7-billion), Tokyo Shoko Research Ltd estimated. Final liabilities would depend on the outcome of discussions with carmaker customers who had borne the bulk of the replacement costs, a lawyer said.

The filings open the door to the financial rescue by Key Safety Systems (KSS), a Michigan-based parts supplier owned by China’s Ningbo Joyson Electronic Corp.

KSS had agreed to take over Takata’s viable operations, while the remaining operations would be reorganised to continue churning out millions of replacement airbag inflators, the firms said.

The US company would keep most of Takata’s 60 000 employees in 23 countries and maintain its factories in Japan. – Reuters