Jessica DiNapoli and David Shepardson writing for Reuters reported that Takata Corp, the Japanese company facing billions in liabilities stemming from its defective air bag inflators, is preparing to file for bankruptcy as early as next week as it works toward a deal for financial backing from USA auto parts maker Key Safety Systems Inc, sources said on Thursday.
According to reports it is expected that the company will first seek bankruptcy protection in Japan; after that its US subsidiary can then file for Chapter 11 bankruptcy protection in America. Takata's airbag inflator recalls began in 2008 and involves the replacement of around 100 million airbag inflators.
The Michigan-based corporation, which is controlled by a Chinese supplier going by the name of Ningbo Joyson, refused to comment on the arrangement. The proceedings for filing of bankruptcy is to begin shortly in the U.S. and in Japan.
Takata airbag inflator recalls are expected to continue through at least the end of 2019.
Takata is still building replacements required under a recall of around 100 million inflators that could detonate with excessive force after prolonged exposure to heat.
If you think your auto or truck might have recalled airbag inflators, check with the National Highway Traffic Safety Administration by entering its vehicle identification number, or VIN, here. The automotive parts supplier is facing an $850 million payment to auto makers, as part of a settlement for a U.S. Justice Department criminal probe.
The Japan Times has also reported today that safety officials at Takata and Nissan will be referred to prosecutors on suspicion of professional negligence resulting in injury after a recalled airbag inflator in a Nissan vehicle ruptured in a collision in 2015.
Moreover the company paid a $25 million fine, $125 million to people hurt by the airbags and $850 million to companies that used them. Takata's bankruptcy was nearly a foregone conclusion, but the need to replace tens of millions of airbags remains.
Takata Corp.'s exploding airbag scandal has pushed the company to bankruptcy.
"Longer term, the question is whether Takata, with a new owner, can rebuild trust with automakers to build future business".
"Now that the company's credibility has been shot, it's possible the brand may never recover and get back to where it once was", Anand went on to say.