Takata, whose defective air-bag inflators have been linked to at least 11 deaths and prompted the largest auto recall in US history, has reached a deal to sell most of its assets to Sterling Heights, Mich. -based auto parts supplier Key Safety Systems Inc. for $1.6 billion.
TK Holdings, Takata's United States operations, filed for Chapter 11 bankruptcy in DE on Sunday with liabilities of US$10 to 50 billion, while the Japanese parent filed for protection with the Tokyo District Court early on Monday, Reuters reported on Monday.
The firm's executives sought to reassure customers, suppliers and shareholders in a news conference on Monday, saying: "As a group our company will continue to count on your understanding and co-operation as we endeavour to provide a stable supply of products".
Automakers have already shifted business away from Takata and toward rivals for about 70 percent of the parts to fix defective airbag inflators, which can explode and cause death or injury with shrapnel, Bloomberg reported.
Japanese airbag maker Takata Corp has filed for bankruptcy protection in the United States and Japan. The defect, which triggered the largest recall in USA history, been linked to at least 16 deaths and more than 180 injuries. That includes 69 million in the US, affecting 42 million vehicles.
The PSAN operations will be run by a restructured Takata and will keep making inflators for recalls, but will eventually be wound down.
Key, which makes inflators, seat belts and crash sensors for the auto industry, would not comment on reports that it would purchase the Takata assets. The scope of the recall means some auto owners face lengthy waits for replacement parts, meanwhile driving cars with air bags that could malfunction in a crash. The process of making all USA vehicles safe again could last until 2023.
May, 2014 - Takata tells U.S. National Highway Traffic Safety Administration (NHTSA) ruptures appear to reflect long-term exposure to high humidity and processing issues.
The suspect inflators use a ammonium nitrate chemistry that can break down and become unstable over long periods in hot, humid conditions.
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"Takata agreed to pay $1 billion over air bag fraud; three of the company's executives were also criminally charged".
Of that amount, 850 million dollars (£666 million) goes to carmakers to cover their costs from the recalls. Takata already has paid $125 million into a fund for victims.
Trading in Takata shares was suspended at the opening of the stock market Monday after a week of wild volatility and the Tokyo exchange said it would delist the firm on July 27.
Takada said he intends to leave Takata's management once it is handed over to Key Safety Systems and things are running smoothly.
Takata was founded as a textiles company in 1933.
With liabilities expected to exceed 1 trillion yen ($9 billion; 306 billion baht), Takata's bankruptcy is the largest ever by a Japanese manufacturer.
The CEO says Key Safety Systems will relocate its Asian headquarters to Tokyo from Shanghai once the takeover is complete, which he said should happen in the first quarter of 2018. Claims are continuing against Honda, Ford, Nissan and Takata. Key is owned by Ningbo Joyson Electronic Corp. of China. CEO Shigehisa Takada speaks during a press conference in Tokyo, Monday, June 26, 2017.
More than a dozen deaths are linked to the company's faulty airbags.
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