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Wednesday, October 23, 2019  Spokane, Washington  Est. May 19, 1883
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News >  Business

Air-bag maker Takata reportedly will file for bankruptcy protection

Tribune News Service

TOKYO – Beleaguered car air-bag manufacturer Takata is planning to file for bankruptcy protection in Japan, possibly by the end of this month, the Kyodo News agency reported Friday, citing unnamed sources.

The 84-year-old Japanese company’s liabilities are likely to exceed $9 billion after a worldwide recall of air bags, which is likely the biggest corporate failure in manufacturing in Japan in the postwar era, Kyodo said.

The Tokyo Stock Exchange suspended trading of shares in Takata Friday.

A spokesman for Takata said: “Nothing has been decided at this point.”

The Nikkei business daily reported the U.S. car-parts maker Key Safety Systems, owned by China’s Ningbo Joyson Electronic, will sponsor Takata’s turnaround process.

A new company established under KSS is to purchase Takata operations for abolut $1.62 billion and continue to supply its air bags, seat belts and other products, the Nikkei added.

Bloomberg reported, citing an unidentified source, that Takata plans a bankruptcy filing in the United States as soon as next week.

Takata’s defective air bag inflators have forced carmakers to recall about 100 million vehicles worldwide. The air bags can rupture explosively when deployed in a collision, spraying metal fragments at drivers and passengers.

At least 16 deaths and more than 180 injuries have been linked to the defect worldwide.

In January, Takata agreed to plead guilty to wire fraud for falsifying testing data and reports provided to carmakers.

The penalty includes a $25 million criminal fine, a $125 million compensation fund for victims, and an $850 million restitution fund for carmakers.

Three of Takata’s executives were indicted in connection with the safety defects.

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