Takata decides to file for bankruptcy
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Japan’s Takata Corp decided on Monday to file for bankruptcy protection in Japan with liabilities of more than 1 trillion yen (US$9 billion), Japanese media reported, as the auto parts supplier has struggled due to its defective air bag inflators at the center of the auto industry’s biggest ever product recall.
The decision came at a special board meeting, public broadcaster NHK said.
Takata is expected to file for a U.S. Chapter 11-style bankruptcy protection procedure, along with a similar filing in the United States, sources have told Reuters. This would open the door for a financial rescue from U.S. auto parts supplier Key Safety Systems, which Takata has tapped as its preferred financial sponsor.
Faulty air bag inflators made by Takata have been linked to at least 17 deaths in the United States and other countries, prompting a massive global recall which began nearly a decade ago.
Questions & Answers
Q.What is the primary reason for Takata's bankruptcy filing?
What is the primary reason for Takata's bankruptcy filing?
Takata has struggled financially due to its defective air bag inflators. These inflators are at the centre of the automotive industry's largest product recall, which has created significant liabilities for the company.
Q.Which company is expected to provide financial rescue for Takata?
Which company is expected to provide financial rescue for Takata?
U.S. Auto parts supplier Key Safety Systems has been tapped by Takata as its preferred financial sponsor. This company is expected to provide a financial rescue once the bankruptcy proceedings are underway.
Q.How large are Takata's reported liabilities?
How large are Takata's reported liabilities?
Japanese media reports indicate that Takata's liabilities amount to more than 1 trillion yen. This figure translates to over US$9 billion, highlighting the substantial financial burden faced by the company.
Q.How many deaths have been linked to Takata's faulty air bag inflators?
How many deaths have been linked to Takata's faulty air bag inflators?
At least 17 deaths in the United States and other countries have been linked to Takata's faulty air bag inflators. This serious safety issue prompted a massive global recall that began nearly a decade ago.
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