Takata bankruptcy means air bag victims get less

Xavier Trudeau
Juin 20, 2017

Takata announced back in February it was holding negotiations to sell its business to Key Safety Systems based in Detroit, Michigan, which is owned by a company based in China. The supplier is expected to seek protection in its home country first, with its USA subsidiary filing for Chapter 11 bankruptcy shortly thereafter, a person familiar with the matter said last week. A Takata steering committee has recommended Key Safety as the preferred bidder for the manufacturer of faulty air bag inflators linked to at least 17 deaths worldwide. Tens of millions of airbags have been replaced since 2008 until now.

In a statement late Friday, Takata said that "all options are being considered" for its restructuring and that "no decision of any kind has been made". The company was awaiting the final proposal from the outside panel set up to oversee its restructuring, and would make a decision quickly once it received the proposal, it said.

The Japanese company became famous for manufacturing airbags with defects.

Takata might be getting nearer to its end.

The supplier's airbag inflators use a propellant that can be rendered unstable after long-term exposure to heat and humidity, leading them to rupture and spray deadly metal shards at vehicle occupants.

As this crisis has grown, Takata has attempted to figure out how to survive and keep supplying the replacement parts to the carmakers affected, such as Toyota and Honda.

The stock was suspended Friday in response to the reports, which said the troubled company plans to file for bankruptcy protection as soon as this week.

The sale to Key Safety of the company's business operations would then take place following the filing.

Automakers that have used Takata's air bags still need an uninterrupted supply of parts to replace air bags in markets around the world.

Honda CEO Takahiro Hachigo said at a media briefing on Friday that the auto maker had not heard any specifics about the Takata bankruptcy plan. "We have told the third-party committee to make sure to prioritize parts procurement".

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