(26 Jun 2017) Japanese air bag maker Takata Corp. filed for bankruptcy protection in Tokyo and the US on Monday, saying it was the only way to ensure it could carry on supplying replacements for faulty air bag inflators linked to the deaths of at least 16 people.
Most of Takata's assets will be bought by rival Key Safety Systems, a Chinese-owned company based in suburban Detroit, for about $1.6 billion (175 billion yen).
The company's executives sought to reassure their customers, suppliers and shareholders in a news conference on Monday.
With the company rapidly losing value while Takata struggled to reorganize its finances, filing for bankruptcy protection was the only option, Takata's Chairman and CEO, Shigehisa Takada, told reporters.
"As a maker of safety parts for the automobile industry, our failure to maintain a stable supply would have a major impact across the industry," Takada said in Tokyo.
Takata's inflators can explode with too much force when they fill up an air bag, spewing out shrapnel.
Apart from the fatalities, they're responsible for at least 180 injuries, and are grappling with the largest automotive recall in U.S. history.
So far 100 million inflators have been recalled worldwide including 69 million in the U.S., affecting 42 million vehicles.
More than 70 percent of the airbags recalled in Japan have been replaced, and 36 percent in the U.S., said Hiroshi Shimizu, a Takata vice president. He said progress of the recalls in other countries was unknown.
Under the agreement with Key, remnants of Takata's operations will continue to make inflators to be used as replacement parts in the recalls, which are being handled by 19 affected automakers.
Takata will use part of the sale proceeds to reimburse the automakers, but experts say the companies still must fund a significant portion of the recalls themselves.
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