No Confirmation of Takata Bankruptcy Filing Following Massive Air Bag Recalls

by San Antonio Attorney

Air bag maker Takata has been carrying out negotiations with its major clients in a proposition to share the high costs brought by the biggest recall in the automotive industry.

The Japanese company is liable for $84 million worth of air bags subject to recalls in the Japan, Canada and United States, based on an earnings statement in August.

The faulty air bags tend to explode in a crash, tossing scorching shrapnel into the driver and/or passenger.  The defective products have caused deaths to at least a dozen people and inflicted injuries to about100 people.

In response to queries about potential bankruptcy filing, Takata said that it is doing what it can to deal with the expenses associated to the air bags recall.

According to Honda spokesman Jayme Robinson, they are cautiously keeping an eye on the matter but they do not want to make any comments because the issue is under Takata’s management.

To some extent, all automakers are affected by the product recall.  According to reports, almost 25 percent of all automobiles being used in the United States could be included in the recall.

Takata has an agreement with the National Highway Traffic Safety Administration to replace the faulty inflators of air bags within five periods until December 2019.  Takata will pay about $70 million in fines and about $200 million for not fixing the vehicles or reporting the issue immediately.

The company admitted in August that the problem may largely impact its business in a negative way.

In October, Takata said it has created a committee to look into reorganization options, although it has not confirmed about considering filing for bankruptcy.  A number of companies, including Autoliv and Bain Capital, have reportedly expressed interest to acquire the company.

The latest report released by Takata Corp. stated a 6.6% drop in net sales and 32.9% decrease in net income.

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