Japanese Airbag Maker Files for Bankruptcy

Japanese Airbag Maker Files for Bankruptcy

Japanese Airbag Maker Files for Bankruptcy

More than 100 million cars with Takata air bags, including around 70 million vehicles in the USA, have been recalled since concerns first emerged in 2007.

Takata's overall liabilities stand at 1.7 trillion yen ($15 billion), Tokyo Shoko Research study estimated.

Final liabilities would depend on discussions with carmaker customers who have borne the bulk of the replacement costs, a lawyer for the company said.

Takata's assets are expected to be sold for $1.6 billion to a rival company, Key Safety Systems, and part of Takata will remain under a different name to make replacement inflators for the recalls. It is owned by China's Ningbo Joyson Electronic Corp.

"Although Takata has been impacted by the global airbag recall, the underlying strength of its skilled employee base, geographic reach and exceptional steering wheels, seatbelts and other safety products have not diminished", he said.

In the US, more than 16 million inflators have been repaired so far, or 38 percent of the total. Claims are continuing against Honda, Ford, Nissan and Takata.

GOP Senate Bill Would Cut Health Care Coverage By 22 Million
Six Republicans have now publicly opposed the proposal as written, though some of those votes could change if the plan is revised. The pressure is on for them to deliver now that they control the White House, House of Representatives and Senate.

Takata does not plan to hold an auction of its assets, often used to ensure assets fetch top dollar for creditors.

The CEO of Takata, who has long pushed back the scenario of bankruptcy, refused to let go the reins, officially welcomed the choice of KSS, "an ideal takeover".

At least $1 billion from the sale to Key is expected to be used to satisfy Takata's settlement of criminal charges in the USA for concealing problems with the inflators. The ensuing recall - the largest in automotive history - has turned out to be messy, confusing and frustrating for auto owners.

"We're in a very hard situation, and we had to find ways to keep supplying our products", Takada said, according to the Associated Press.

The lead attorney for people suing the automakers said in a statement following the announcement that he doesn't expect the bankruptcy to affect the pending claims against the companies. Takata is expected to use $1 billion of the proceeds to cover its settlement of criminal charges with US authorities.

Takata and the automakers were slow to address the problem with the inflators despite reports of deaths and injuries.

Jose Mourinho Absolutely Destroyed On Twitter After Reports Of Tax Fraud Emerge
This is similar to deals struck with the Spanish taxman by fellow Argentinians Javier Mascherano and Lionel Messi previous year . Barcelona's Lionel Messi was sentenced to a 21-month jail sentence and 2.09 million euro fine past year for tax fraud .

"We now have pending a number of cases across the United States involving wrongful deaths, people that are hit with these flying shrapnel", he said.

Honda said it'll become hard to recoup the majority of its claims against Takata with the bankruptcy filing.

The embattled company has manufactured airbags for more than 30 automotive brands including Honda, BMW, Toyota, Mazda and Mitsubishi, with replacement parts hard to source due to the huge scale of the recall. Although Takata will use part of the sale proceeds to reimburse the automakers, experts say the companies still must fund a significant portion of the recalls themselves.

The ammonium nitrate compound used in the air bags was found to become volatile with age and prolonged exposure to heat, causing the devices to explode. "This agreement would allow that to continue".

Costs so far have pushed the company into the red for three years, and it has been forced to sell subsidiaries to pay fines and other liabilities.

Chile feels the fatigue from its all-out play in Confed Cup
Portugal's Cristiano Ronaldo celebrates after scoring a penalty during the 2017 Confederations Cup match against New Zealand . While Ronaldo garners the attention, another dynamo is blossoming in Russian Federation .

Related news