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Takata files for bankruptcy

Not quick: The Takata airbag debacle is not only costing motor companies big dollars but also Australian taxpayers, who have to foot the bill for the ACCC to make sure recall repairs are done.

Airbag supplier Takata seeks bankruptcy protection in US, sells assets for $US1.6b

General News logo26 Jun 2017

EMBATTLED airbag manufacturer Takata has filed for bankruptcy protection in the United States and Japan after buckling under the weight of recalling over 100 million faulty airbags linked to the deaths of at least 17 people worldwide.

According to reports, Takata’s global liabilities are expected to reach up to $US10 billion ($A13.2 billion) as the airbag crisis continues, with only 70 per cent of affected vehicles repaired in Japan, 38 per cent in the US and an unknown percentage for the remainder of the world including Australia – which at last count had 2.1 million vehicles caught up in the recall.

The identified fault with the airbags involves the potential for moisture seeping into the inflator, rupturing the metallic casing and leading to the possibility of shrapnel hitting occupants once an airbag is deployed.

As GoAuto has reported, an Australian motorist was allegedly injured by shrapnel from a Takata airbag following a car crash in the Northern Territory in April this year.

With Takata having manufactured airbags for more than 30 automotive brands around the globe – including Honda, Toyota, BMW, Mitsubishi and Mazda – replacement parts have been slow to procure due to the widespread nature of the recall.

Earlier this year, Takata pleaded guilty to a felony charge in a US federal court as part of a $US1 billion ($A1.32 billion) fine which also allowed the Japanese parts-maker to secure a buyer, which it has now revealed to be US-based Key Safety Systems (KSS).

KSS will take over Takata’s global assets and operations – excluding resources related to the manufacturing and sale of recall-related ammonium nitrate airbag inflators – for the sum of $US1.6 billion ($A2.11 billion).

The changeover is designed for minimal disruption and is not expected to affect Takata’s existing supply chain, customers or employees.

KSS president and CEO Jason Luo said he expects the deal to close in the next few months and recognised Takata’s wide-reaching expertise.

“Although Takata has been impacted by the global airbag recall, the underlying strength of its skilled employee base, geographic reach and exceptional steering wheels, seatbelts and other safety products have not diminished,” he said.

“We look forward to finalising agreements with Takata in the coming weeks, completing the transactions and serving both our new and long-standing customers while investing in the next phase of growth for the new KSS.” Meanwhile, Takata chairman and CEO Shigehisa Takada said the deal was inked with the ongoing recall, its customers and support for its employees all in mind.

“KSS is the ideal sponsor as we address the costs related to airbag inflator recalls, and an optimal partner to the company’s customers, suppliers and employees,” he said. “The combined business would be well positioned for long-term success in the global automotive industry.

“Throughout this process, our top priorities have been providing a steady supply of products to our valued customers, including replacement parts for recalls, and a stable home for out exceptional employees. This agreement would allow that to continue.”

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