Takata files for bankruptcy, rival Key to acquire most assets
DETROIT | Japanese air bag maker Takata Corp. has filed for bankruptcy protection in Tokyo and the U.S., overwhelmed by lawsuits and recall costs related to its production of faulty air bag inflators that are linked to the death of at least 16 people.
The company announced the expected action Monday morning Tokyo time. Takata confirmed that most of its assets will be bought by rival Key Safety Systems, based in suburban Detroit. Key will pay about $1.6 billion (175 billion yen), according to an announcement by the two companies.
Takata’s defective inflators can explode with too much force when they fill up an air bag, spewing out shrapnel. Besides the fatalities, they also caused at least 180 injuries, and touched off the largest automotive recall in U.S. history.
Under the agreement with Key, Takata’s manufacturing of inflators will be kept separate in order to keep
manufacturing inflators used as replacement parts in recalls. The recalls, which are being handled by 19 affected automakers, will continue.
Key also said it won’t cut any Takata jobs or close any of Takata’s facilities.