Japan’s Takata Corp. the auto safety parts supplier at the center of a global auto safety recall scandal has forecasted it would incur higher than anticipated losses during the fiscal year ending March 31.
Even though the parts maker has projected higher deliveries of parts for the fiscal year, the forecasted losses have also gone up from $214 million to $264 million. Tokyo-based Takata is currently under worldwide scrutiny because of widespread recalls of airbag inflators that can explode with too much force, sending metal debris and shrapnel inside the cabin at high velocity. At least five fatalities and dozens of injuries have been attributed to the flaw around the globe, while ten automakers have recalled millions of cars worldwide, with more than 12 million units in the United States alone. Even as it has been investigated by safety regulators and faces a criminal probe in the US, the parts maker has yet to determine the root cause of the defective part.
Takata has so far declared it has been hard at work with the automakers affected to deal both with recalls and associated expanses – with much of its cost shielded by insurance. “Depending on further developments, our financial results and our cash flow may be affected,” declared the company in a statement, acknowledging it had no assessment of possible future costs stemming from lawsuits and possible fines from authorities. Honda – the largest Takata client – has already agreed to pay a record $70 million in the US for not reporting deaths, accidents and injuries for many years, including Takata-linked accidents.