Takata seeks money to pay for the airbag crisis image

Takata is in some serious financial predicament over its faulty airbags and it is reportedly looking for a partner who can help the supplier pay for the massive recalls.

There have been tens of millions of faulty airbags made by Takata recalled so far, but the scale of this major safety crisis could get to another dimension, as sources said that there were nearly 300 million inflators filled with the volatile substance that made them explode with a deadly force. Because of the scandal, the Japanese supplier is currently facing financial problems and some estimates are showing that a comprehensive callback of its airbags would cost about 24 billion dollars. Therefore, Takata has begun looking for a financial backer and has plans to draw up a list of candidates by August, two people familiar with the matter told Reuters.

The supplier also plans to make a move to ease up some of that building pressure, by preparing a restructuring program – relying on a third-party panel to help formulate it – and bring it in front of carmakers, a strategy that includes a proposal of sharing the recall costs as well. So far, most of those costs have been borne by the carmakers affected by the defective inflators, but Honda – which has had the most cars involved in the recalls – already said it did not intend to offer any financial aid to Takata. To cut some of its costs, the company is considering taking some drastic actions, by trimming its global airbag operations. Some other sources said Takata is exploring the idea of consolidating production plants in Europe and reducing overseas staff.

Via Reuters