Takata Bankruptcy: Japanese Air Bag Maker Files for Bankruptcy, Acquired by Chinese-Owned Key Safety Systems
Japanese air bag maker Takata confirmed earlier this week that it was filing for bankruptcy in Japan and the United States. According to the company, this was done so they could still provide all the necessary replacements for their defective airbag inflators.
For the past decade, Takata has been dealing with recalls due to its alleged faulty products. After confirming that it was filing for bankruptcy, the company also announced that Key Safety Systems would acquire its assets. The Chinese-owned company is currently operating in suburban Detroit.
Based in Japan, Takata started to operate in the early 1990s as they manufactured a cheap alternative to expensive air bags. However, its low cost has proven to compromise the quality of the product, with some complaining that its faulty inflators do blow up and deliver shrapnel into vehicles. In the United States alone, Takata's faulty air bags have caused at least 12 deaths and 180 injuries.
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Along with the tampering of testing data, the company also pleaded guilty for falsifying the reports that it had given to automakers. The verdict by the end of the trial had the company paying $25 million in fines and raising $125 million for each of the victims of its faulty air bags. The company was also ordered to pay $850 million to the automakers it had sent falsified reports to.
In a news conference held in Tokyo on Monday, Takata president Shigehisa Takada reassured their customers, suppliers and shareholders that they would replace all the faulty airbag inflators they had previously supplied them with. "As a maker of safety parts for the automobile industry, our failure to maintain a stable supply would have a major impact across the country," said Takada.
For the past years, Takata has lost its value and has struggled dealing with the reorganization of its finances. Right now, the company is still in the process of providing replacements to all the recalled airbags in the market.
