Takata would stop making air-bag inflators under new plan

Takata would stop making air-bag inflators under new plan

Takata would stop making air-bag inflators under new plan

Takata is working towards a deal for financial backing from the USA auto parts maker Key Safety Systems Inc., according to sources.

Almost 100 million cars, including about 70 million in the United States, were subject to the airbag recall, the largest in auto history, over the defective Takata airbags blamed for 11 deaths in the United States alone.

Takata is still building replacements required under a recall of around 100 million inflators that could detonate with excessive force after prolonged exposure to heat.

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

A spokeswoman for Tokyo-based Takata said she wasn't aware of the reported plan and the company will issue a statement on it soon.

If you think your auto or truck might have recalled airbag inflators, check with the National Highway Traffic Safety Administration by entering its vehicle identification number, or VIN, here.

Takata's (7312.JP) long-expected bankruptcy protection filing to address the mounting liabilities related to faulty automotive air bags, which were linked to several fatalities and many more injuries, is in its final stages.

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In January, Takata agreed to plead guilty to criminal wrongdoing and pay a $25 million fine to resolve a U.S. Justice Department investigation.

Takata is facing billions in liabilities that have come up as a result of defective airbag inflators, and the component manufacturer also owes $850 million to major automobile manufacturers around the globe.

Inflator recalls began around 2008 and involve around 100 million inflators around the world used in vehicles made by 19 automakers, including Honda Motor Co, Ford Motor Co, Volkswagen AG (VOWG_p.DE) and Tesla Inc.

Takata airbag inflators came under controversy when it was found that they explode with excessive force, causing metal and plastic shrapnel to go haywire inside the auto, therefore injuring occupants.

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

"Longer term, the question is whether Takata, with a new owner, can rebuild trust with automakers to build future business".

Presumably, Takata will continue manufacturing airbags throughout the bankruptcy proceedings. Beyond that, Takata faces a massive uphill climb, both from a financial and brand image perspective.

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