Embattled Japanese airbag supplier Takata has officially filed for bankruptcy protection in Japan and the United States.
The supplier said Monday it would sell off the majority of its key assets to Key Safety Systems Inc. of Lansing, Michigan. The company paid $1.59 billion for nearly all of Takata’s global assets, save for some of the operations related to its defective airbags.
Takata’s airbags were the subject of the largest automotive recall in U.S. history. In 2013, the company issued a recall for vehicles equipped with airbags that used ammonium nitrate in the inflation process. The company said the airbags may explode with too much force, sending shrapnel into the cabin and potentially injuring vehicle occupants. At least 16 deaths and 180 injuries worldwide were linked to the faulty airbags.
The supplier made matters worse when it was discovered it had purposely withheld information in regards to the recall and altered airbag test data. It pleaded guilty to federal wiretapping charges in February and agreed to pay a $1 billion fine. A federal grand jury also indicted three Takata executives for their role in the scandal in January.
With Key Safety Systems now in charge, the airbag recall will be held by a reorganized Takata, the American supplier said. Components needed to fix affected vehicles will continue to be produced through to 2020, at which point Takata’s operations will begin to wind down entirely. In a press conference Monday, CEO Shigehisa Takada said it was necessary to enter bankruptcy protection to ensure it had the cash on hand to handle the recall.
“If things are left as is, we are aware of risks that we may not able to raise fund and to continue stable supply of products,” he said. “In light of the management environment we face, the state of negotiations with the sponsor candidate and carmakers, and the external expert committee’s opinion, we have decided today to file for bankruptcy protection.”
[Source: Automotive News]