Takata plummets 55% on bankruptcy fears

tokyo — Takata suffered another crushing collapse on Thursday, plummeting more than 50 per cent on fears the airbag maker at the centre of the auto industry’s biggest-ever safety recall is headed for bankruptcy.

The Tokyo-based car parts giant, facing lawsuits and huge recall-related costs over a bag defect linked to at least 16 deaths globally, has tumbled for four straight days.

It is now worth less than a quarter of its value from just a week ago when a report by Japan’s leading Nikkei business daily said it would seek bankruptcy protection and sell its assets to a US company. At Thursday’s close, the embattled stock had plummeted 55 per cent to ¥110 ($1) from a day earlier.

“The shares are going to keep falling because the only buyers are day traders hoping to lock in gains from fluctuations in the price,” Hiroaki Hiwata, a strategist at Toyo Securities, told earlier. Another Nikkei report Thursday said Takata, with liabilities exceeding one trillion yen, would file for bankruptcy protection as early as Monday.

Takata’s major automaker clients reportedly support the bankruptcy filing plan.

The scandal-hit airbag firm and some of its car customers are facing legal claims they knew about the problem and kept silent about it. Millions of vehicles produced by some of the largest firms, including Toyota and General Motors, are being recalled because of the risk that an airbag could improperly inflate and rupture, potentially firing deadly shrapnel at the occupants. Takata issued a brief statement Thursday that said “no decision of any kind has been made” on a bankruptcy filing.

A filing would clear the way for American autoparts maker Key Safety Systems, owned by China’s Ningbo Joyson Electronic, to take over the firm’s operations, the Nikkei has said.

Takata’s US-based unit TK Holdings is also expected to file for Chapter 11 bankruptcy.

Nearly 100 million cars, including about 70 million in the United States, were subject to the airbag recall, the largest in auto history, over the defective Takata airbags.

Takata has already agreed to pay a billion-dollar fine to settle lawsuits in the US over its airbags, and the company was heavily criticised for staying largely silent as the crisis grew. — AFP