The troubled Japanese manufacturer is under considerable debt following its massive airbag recall.
The world’s biggest airbag manufacturer and supplier – Takata Corp, is reportedly planning to file for bankruptcy, reports Reuters. The report also claims that the Japanese company is in talks with Key Safety Systems, its rival company, for financial backing.
Takata’s troubles started after its airbags became infamous for violently exploding under excessive force, thus causing serious injuries to the passengers. Takata’s airbag inflators have been held responsible for 16 fatalities and atleast 180 injuries across the globe, with a majority of them being in the United States.
This was followed by the automotive industry’s biggest airbag recall – 100 million airbags were recalled by the Japanese manufacturer for the risk of explosion. A total of 19 manufacturers were affected under this recall, which included everyone from Takata’s fellow Japanese companies like Honda and Toyota, to the Italian supercar manufacturer, Ferrari.
In India, Honda was the biggest victim of Takata’s recall. The company had to recall about 41,000 units of Jazz, City, Civic and Accord to replace Takata’s faulty airbag inflators. Consequently, Takata was penalised about US $25 million (Rs. 16 crore) and paid another $125 million (Rs. 80 crore) as to a victim’s compensation fund.
Additionally, Takata as of now owes as much as US $850 million to global automotive manufacturers, which is part of a settlement reached earlier in 2017. The deadline for Takata to pay the aforementioned amount is 2018.
The Japanese company, reportedly, plans to first file for bankruptcy first in its motherland, Japan, and then in the United States. The execution of the same is planned before its annual shareholder meeting takes place, which is on June 27.
While the problem with Takata airbag inflators was first discovered back in 2008, even today, as much as 65 percent of the recalled vehicles haven’t been fixed, owning to various reasons. Many automotive manufactures are concerned over the disruption of replacement airbag inflators if Takata fails to strike a sale deal.