Takata Corporation, the company that supplied the defective airbags at the centre of the automotive industry’s largest recall, has officially filed for bankruptcy protection in the United States and Japan.
The Japanese firm also confirmed that it would sell key assets to US supplier Key Safety Systems. Bankruptcy would effectively allow Key Safety Systems to indemnify itself from legal liability related to the Japanese firm’s airbags.
Key Safety Systems said in a statement that it would purchase Takata’s assets and operations for the sum of $1,588-billion (about R20,5-billion).
The suspect airbags, used by as many as 19 major automakers, employ potentially defective ammonium nitrate inflators that can result in metal shards being sprayed into the cabin on inflation. At least 16 deaths and some 180 injuries have been linked to these inflators, according to Automotive News.
Interestingly, Key Safety Systems said that it would “acquire substantially all of Takata’s assets, except [CARmag.co.za‘s emphasis] for certain assets and operations that relate to Takata’s manufacturing and sale of phase-stabilised ammonium nitrate airbag inflators”.
The US firm added that it was expected that this part of the operation would be run by a “re-organised Takata” following the transaction closing and that it would eventually be “wound down”.
Automotive News says 17 automakers, from Honda and Toyota to BMW, have been listed as “unsecured creditors” with unknown claims against Takata.
“Takata has deep management talent, a dedicated work force and a long history of exceptional customer service. Although Takata has been impacted by the global airbag recall, the underlying strength of its skilled employee base, geographic reach, and exceptional steering wheels, seat belts and other safety products have not diminished,” said Jason Luo, president and CEO of Key Safety Systems.
“We look forward to finalising definitive agreements with Takata in the coming weeks, completing the transaction and serving both our new and long-standing customers while investing in the next phase of growth for the new Key Safety System.”
