Japan’s Takata Corporation filed for bankruptcy protection in Japan and the United States and agreed to be acquired for $1.6 billion by Key Safety Systems which is Chinese owned and U.S. based. Takata faces tens of billions of dollars in costs and liabilities that came from almost a decade of recalls and lawsuits. This included airbag inflators that have been linked to at least 16 deaths and 180 injuries around the world due to rupturing and flying metal fragments. Totaling to 1.7 trillion yen ($15 billion) in liabilities, Takata aims to recall about 125 million vehicles worldwide by 2019. However, costs for recalls could reach up to $10 billion.
On Sunday, Takata’s U.S. operations TK Holdings filed for Chapter 11 bankruptcy with $10 to $50 billion worth of liabilities while Japanese operations filed for protection with the Tokyo District Court the day after.
Parts supplier Key Safety Systems (KSS) agreed to take over Takata’s workable operations while the remaining operations will be reorganized to continue replacing airbag inflators. That way Takata can continue operating without interruptions to its supply chain and can keep their employees to maintain factories in Japan.
Stock prices for Takata has collapsed by 95 percent since January 2014 and the Tokyo Stock Exchange said shares would be delisted on July 27.