Takata plans a restructuring process after reporting loss image

As the Japanese auto supplier posted an expected drop in its earning over recall costs, it looks to review its airbags unit.

Takata confirmed this week the anticipated financial hit over recall costs, reporting a net loss of 13.1 billion yen (120.5 million dollars) for the year ended in March, its third in the past four financial years. Surprisingly, the supplier sees the current year to be a profitable one, expecting a net income of 13 billion yen, but added that recall costs have not been factored in, as the root cause of the defect has not been determined. “Once we determine the cause of the airbag defect, then we’ll discuss costs with automakers,” Chief Financial Officer Yoichiro Nomura said at a briefing.

Takata launched an internal investigation over the matter and it said the results were to be made public sometime in the summer. The company has not been affected much by the recall costs, as most of those have been endured by the carmakers affected by the defective inflators. However, it is unlikely this situation will last, considering the fact that the crisis abruptly escalated, with US regulators announcing last week that recalls are to be extended to another 35 million-40 million inflators.

There have been many reports suggesting that Takata is preparing a restructuring program – relying on a third-party panel to help formulate it, for the supplier to now confirm the move. It said it has appointed a team of five experts to help with the plan, a strategy which it hopes to have in place by autumn. It is likely for the plan to include trimming some of its global airbag operations, by consolidating production plants in Europe and reducing overseas staff.

Via Reuters