Industry, Markets

Takata close to bankruptcy after massive recalls of its faulty airbags

According to latest reports, Japanese car parts-maker Takata is readying to file for bankruptcy following its faulty airbags led to the largest safety recall in car-making industry.

This filing could arrive in the coming week both in Japan and the US, where it has a subsidiary and is looking for a buyer. Reports said Takata faces billions of dollars in liabilities over the recall.

Up to now about 100 million Takata airbags, which can burst with deadly force and squirt shrapnel at passengers, have been recalled all over the world.

Not just that these faulty airbags have been linked to at least a dozen fatal incidents and more than 100 injuries worldwide.

Meanwhile Japan’s Nikkei newspaper predicts the company faces liabilities more than 1 trillion yen ($9bn).

However Takata did not responded on the reports in Japan, from sources close to the case, of looming bankruptcy.

Furthermore it is reported that Takata is thought to be discussing a possible agreement with US auto parts maker Key Safety Systems. Key Safety Systems may purchase some of its assets under a shake-up plan.

Back in January, Takata agreed to give out $1 billion in penalties in the US for hiding dangerous defects in its blowing up airbags. It also pleaded guilty to a single criminal charge.

Moreover the company paid a $25 million fine, $125 million to people hurt by the airbags and $850 million to companies that used them. But it still faces the chance of more lawsuits.

Reports said that All top carmakers, even the likes of General Motors and Volkswagen, have been affected.

Above all Honda Motor, which as Takata’s largest customer is one of the worst affected, have to recall their famous Accord and Civic models in 2008 because of the airbags.

Following the news, Takata stock was for the time being suspended on the Tokyo stock exchange.

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