Effects of Takata Bankruptcy to Extend Far and Wide
By JONATHAN SOBLEJUNE 26, 2017
TOKYO — Takata, the airbag manufacturer at the center of the world’s largest auto safety recall, filed for Chapter 11 bankruptcy in the United States on Sunday
and said it was selling its surviving operations to a rival supplier.
Key Safety Systems, which is owned by a company in China, Ningbo Joyson Electronic Corporation, has sought
to wall itself off from Takata’s legal problems by buying Takata’s assets, but not the company itself.
In its bankruptcy filing in the United States, Takata projected its liabilities at $10 billion to $50 billion,
vastly more than it will have to give even after the infusion of cash from Key Safety Systems.
Takata said on Monday that it remained committed to a promise it made to the United States government to pay $125 million in compensation to victims.
Carmakers say they are committed to finishing the job, and Takata said on Monday
that it would continue to manufacture replacement airbag inflaters until the process is finished, something it expects will happen by 2020.
The huge range is because of major uncertainties: The recalls are only partially completed,
and no one yet knows how much they will ultimately cost or how much victims might be awarded in lawsuits.
Honda, Takata’s largest customer, summed it up on Monday when it warned shareholders
that it would “become difficult to recover the majority of the claims” that the automaker holds against Takata, including costs of the recalls.