IT&Software

Takata To Go Belly Up As Early As Next Week

Takata To Go Belly Up As Early As Next Week

Reuters reported that the Tokyo Stock Exchange has suspended trading in Takata shares following the reports of imminent bankruptcy.

"They were trying to avoid this as much as possible", Scott Upham, the president of Valient Market Research, said of Takata.

Takata declined to comment in the plans.

Facing billions in liabilities from the defective airbag inflators, Reuters reports Takata is preparing to file for bankruptcy, and it could happen as early as next week.

A bankruptcy filing would mark the end for an iconic Japanese company that started out as a textile maker and produced parachutes for the Imperial Japanese Army during World War II.

Also at stake is $850 million owed by Takata to major global automakers under a settlement agreed to earlier this year stemming from the automotive industry's largest ever safety recall.

The supplier's air bag inflators use a propellant that can be rendered unstable after long-term exposure to heat and humidity, leading them to rupture and spray deadly metal shards at vehicle occupants.

Toyota's priority at this point is to ensure a steady supply of replacement inflators for its customers, said spokeswoman Sonomi Aikawa in an email. USA vehicle safety regulators are putting pressure on Takata and automakers to speed up the replacement of defective inflators in the United States. Bill Nelson states that almost two-thirds of faulty Takata airbags nationwide continue awaiting repairs.

"Ultimately the responsibility for the Takata airbag recalls rests with the automakers who must figure out how to replace the flawed airbags", Krebs said.

Back in January, Takata agreed to give out $1 billion in penalties in the United States for hiding unsafe defects in its blowing up airbags.

A USA judge said earlier this year the costs of replacing all of the faulty Takata inflators could be $8 billion.

The Nikkei news agency has reported that a new company created under Key will purchase Takata operations for about 180 billion yen.

Takata has already paid a $25 million fine and $125 million to a victims' compensation fund, including for future incidents.

Takata isn't the only major Japanese company to have issues this year.

This filing could arrive in the coming week both in Japan and the U.S., where it has a subsidiary and is looking for a buyer.


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