Takata to File for Bankruptcy after Faulty Air Bags Scandal
Takata is reportedly filing for bankruptcy after its faulty air bags led to the biggest safety recall in automotive industry.
The filing could come next week in both Japan and the US, where it has a subsidiary and is seeking a buyer.
The Japanese car parts maker shares were temporarily suspended on the Tokyo stock exchange because of the news.
Takata faces billions of dollars in liabilities over the recall.
So far, about 100 million Takata air bags, which can rupture with deadly force and spray shrapnel at passengers, have been recalled globally.
Takata’s faulty air bags have been linked to at least a dozen deaths and more than 100 injuries worldwide.
Japan’s Nikkei newspaper estimates Takata faces liabilities exceeding 1 trillion yen ($9 billion).
Takata has not commented on the reports in Japan, from sources close to the case, of imminent bankruptcy.
The company is said to be in talks about a potential deal with US auto parts maker Key Safety Systems. The latter may buy some of its assets under a restructuring plan.
In January, Takata agreed to pay $1 billion in penalties in the US for concealing dangerous defects in its exploding air bags. It also pleaded guilty to a single criminal charge.
Takata paid a $25 million fine, $125 million to people injured by the air bags and $850 million to carmakers that used them. However, it still faces the possibility of more lawsuits.
Most major auto makers, including GM and VW, have been affected.
Honda Motor, which as Takata’s biggest customer is one of the worst affected, started recalling their popular Accord and Civic models in 2008 because of the air bags.