Airbag Manufacturer May File For Bankruptcy
Takata Airbags have been the center of a lot of recent attention due to the massive industry-wide recall that has occurred due to faulty airbag modules made by the company. Unfortunately, the extremely expensive recall has taken its toll on Takata, whom has privately announced that it will be seeking Chapter 11 bankruptcy protection soon to help minimize the damages and loss of money. Takata has been forced to pay nearly one billion dollars in fines, penalties, and repayment to major automakers as a result of the recall. Industry experts estimate that Takata may have to be sold to another competitor after the bankruptcy takes place in order to keep its doors open, or risk going under due to their unpopularity after the recall. The result of the recall may mark the end of a once prominent Japanese company that was started over 85 years ago, as a textile manufacturing company that started out making parachutes for the Japanese Imperial Army during World War II.
The Takata airbags were recalled because of their potential to cause death or serious injury during deployment because the propellant used in the airbags became unstable over time when exposed to heat and humidity. The Takata airbags were responsible for about 17 deaths and numerous injuries as a result of the defective propellant. Of the one billion dollars paid during the recall, approximately $150 million was paid out to victims of injuries due to the defective airbags. More than one dozen automobile manufacturers have recalled vehicles with faulty Takata airbags, including Volkswagen, General Motors, and Toyota. The recall covers approximately 100 million airbag modules from Takata.
One possible outcome of the bankruptcy would be the forced sale of Takata to a competitor. One such competitor, Key Safety Systems, owned by Chinese company Ningbo Joyson Electronic Corporation, has expressed some interest in purchasing Takata. Ningbo Joyson Electronic Corporation has the financial capacity to support Takata during the recall.
Taken from SFGate.com
Tags: Airbag, Takata