Takata investors worried after Honda backs out of financial help image

Takata Corp., the auto safety supplier involved in a global crisis over defective airbags, has taken a hit after Honda Motor, the third largest Japanese automaker and its biggest client announced it would not provide financial relief.

Honda Chief Executive Officer Takanobu Ito said his company – which is currently battling its own quality monsters – has no plans to bail out Takata if the auto supplier sinks, refuting a report made by the Nikkei financial newspaper back in December – the executive was cited there saying Honda would come up with financial relief if the supplier needs it. Worldwide recalls of around 25 million vehicles have been announced since 2008 by a dozen automakers – with Honda in the lead – due to flawed airbags. The Takata-built airbag inflators tend to explode with too much force, sending shrapnel and metal debris inside the cabin at high velocity. Five fatalities have been reported so far in the US, along with dozens of injuries, all in Honda-produced autos. Another fatality – again in a Honda vehicle – occurred in Malaysia, where a woman died while carrying a child – the infant was lost too.

The auto safety parts maker has lost the confidence of investors, with Takata sliding 5.4 percent to its biggest drop since January 26, to 1,321 yen at the close in Tokio. The company has lost more than 50 percent of the share value in 2014 as analysts and industry experts believe the recall-related costs and compensation expenses could lead to the company’s untimely demise.

Via Bloomberg