Takata Files For Bankruptcy Following Airbag Scandal
Takata Files For Bankruptcy Following Airbag Scandal

Takata Files For Bankruptcy Following Airbag Scandal


Japanese airbag manufacturer Takata has announced it is filing for bankruptcy protection in the US and Japan in the wake of the largest ever product recall in the history of the automotive industry.

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Implicated in over 100 million faulty airbag recalls and the deaths of at least 17 people worldwide, it is estimated Takata's total liabilities stand at $US15 billion ($A19.78 billion), according to reports.

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Only 70 per cent of affected vehicles have been remedied in Japan, down to 38 per cent in the US, and an unknown amount in the rest of the world, including Australia – which has at least 2.1 million affected vehicles.

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Takata is expected to be acquired by US-based, Chinese-owned Key Safety Systems (KSS) for $US1.6 billion ($A2.1 billion).

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The embattled company has manufactured airbags for more than 30 automotive brands including Honda, BMW, Toyota, Mazda and Mitsubishi, with replacement parts difficult to source due to the huge scale of the recall.

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Takata is expected to be acquired by US-based, Chinese-owned Key Safety Systems (KSS) for $US1.6 billion ($A2.1 billion), who will take over Takata's global assets and operations – excluding resources related to the manufacturing and sale of recall-related ammonium nitrate airbag inflators.

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The handover has been engineered for minimal disruption, and is not expected to affect Takata's employees, customers or supply chain.

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Earlier in the year Takata pleaded guilty to a felony charge in a US court as part of a $US1 billion ($A1.3 billion) settlement deal with the justice department that includes compensation funds for victims of the defective airbags, and the manufacturers who used them.

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The primary fault with the airbags stems from moisture intrusion into the airbag inflator, which can rupture the metallic casing and lead to shrapnel being shot into cabin upon deployment.

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An Australian motorist in the Northern Territory was allegedly injured earlier this year in a car crash due to a defective Takata airbag.

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Takata chairman and CEO Shigehisa Takada said the ongoing recall, support for its employees and its customers all factored into the bankruptcy filing and handover.

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The combined business would be well positioned for long-term success in the global automotive industry.

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\"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.

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\"The combined business would be well positioned for long-term success in the global automotive industry.

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\"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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KSS president and CEO Jason Luo said the acquisition of Takata brought with it a large degree of expertise and quality safety products.

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\"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.

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\"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.\"

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Is the speed at which Takata is replacing defective airbags adequate? Tell us what you think in the comments below.

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