Takata files for bankruptcy protection

Deadly faults in Takata's airbags triggered the auto industry's biggest ever safety recall

Meanwhile, Takata faces class action lawsuits from people claiming injuries as a result of exploding airbags, while it must also reach agreements with its automaker customers over how to divide up payment responsibilities for recall costs. So far, about 100 million inflators have been slated for recall, a process which will take until about 2020 to complete.

The company's air bags are used on vehicles for almost all of the world's major automakers, affecting about one-quarter of all vehicles on the road in the U.S.as of two years ago, according to one estimate.

Japan-based airbag manufacturer Takata has filed for bankruptcy protection in the USA and Japan.

Bankruptcy will allow Key Safety to indemnify itself from legal liability for Takata's airbag fiasco.

Dorado's auto was found to have a defective Takata air bag that had been taken from another vehicle. The new sponsor will not be liable for these inflators, which use ammonium nitrate, the volatile chemical compound at the root of the defective airbags.

"Although we have acquired the right to be reimbursed for the costs of both past and future recalls from Takata and its affiliates, following Takata's filing, it is likely that we will not be able to exercise this right in most cases", Nissan said in a filing with the Tokyo Stock Exchange.




Japanese air-bag manufacturer Takata filed for bankruptcy protection late Sunday.

In February, Takata Chief Financial Officer Yoichiro Nomura appeared in federal court in Detroit on behalf of the corporation to plead guilty to wire fraud and to express the company's "deep regret". Despite its troubles, Takata has held on to about 20 per cent of the global air bag market, which is dominated by just a handful of companies. Not included in the deal are some activities that are related to Takata's ammonium nitrate business. Malfunction of Takata's airbag inflators led to at least 16 deaths and a $1 billion fine in the U.S.

The exact number is still unknown, but it is already clear that this review is the largest in the history of the automotive industry. The present management team, including Chairman and CEO Shigehisa Takada, will step down by next spring once the business transfer gets on track. Honda, a major Takata customer, first sounded the alarm in 2008 that there might be a problem.

Honda also reiterated its position that it did not hide knowledge of Takata defects, but instead was itself a victim of deception by Takata officials. Toyota, Subaru, Mazda and BMW will reimburse out-of-pocket expenses, provide loaners to some vehicle owners and set up an outreach program to increase participation in recalls, according to court papers filed May 18.

January 22, 2016: Federal auto safety regulators attribute a tenth death to a ruptured Takata air bag.

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