Takata files for protection
Takata, the Japanese auto parts maker hurt by air bag recalls, has filed for bankruptcy protection in the United States and said it would sell its surviving operations to a Chinese-owned American rival, Key Safety Systems.
The deal seals the fate of the company at the center of the farthestreaching auto safety crisis in history. Exploding Takata air bags have been linked to at least 14 deaths. Carmakers have recalled nearly 70 million of the company’s air bags in the United States, in 42 million vehicles, as well as millions overseas.
Takata said it will sell its factories and other assets to Key Safety Systems, which makes air bags and other auto safety equipment. Key Safety Systems said it will buy Takata’s factories and other assets for about $1.6 billion. Key is based in Michigan but is owned by Ningbo Joyson Electronic Corp. in China.
The deal effectively means the end of Takata, which was established in 1933 and is still controlled by its founding family.
CEO Shigehisa Takada said a court-supervised restructuring is the best way to ensure that Takata can keep supplying automakers.
A new corporate entity will take over Takata’s production operations, which encompass seat belts and other equipment as well as air bags. Takata has held on to about 20 percent of the global air bag market, which is dominated by a handful of companies.
Takata will continue to exist on paper, working to pay off debts.
Takata owes billions of dollars to banks and automakers, which have been paying to replace tens of millions of potentially dangerous Takata air bag inflators. And it has promised the U.S. government that it will pay $125 million in compensation to victims.
Takata’s bankruptcy is thought to be the largest ever by a Japanese manufacturing company. Takata said it could not yet estimate the scale of the liabilities it would ultimately face. But the figure is expected to be about $10 billion.