Japanese safety auto parts maker Takata Corp, struggling with a safety crisis on its airbag business, is actually still tallying the incoming costs from the huge recalls made so far this year.
Automakers – mainly the Japanese ones, but not only – have so far in the past five years recalled 10.5 million autos equipped with defective airbags manufactured by the Japanese supplier – the critical safety system is possibly faulty, with a risk of its inflators exploding and sending shrapnel throughout the cabin. The defect has been allegedly tied to a couple of fatalities so far.
“We shareholders have been proud of Takata and how its Japanese technology has been protecting people globally, so it was shocking to learn that people have died,” said Shinji Sakagami, 45, a high school teacher that has 300 Takata shares. “I don’t think I’ll keep the stock much longer.”
During yesterday’s annual shareholder meeting, Takata Chief Executive Shigehisa Takada apologized for the safety crisis and said the company doesn’t yet know how much it will lose from the mishap, as it’s still counting the total costs.
According to analyst assumptions, by adding a $90 to $100 cost for each recalled car this year, based on assessing the replacement part prices, labor costs and other issues, the total charge for this financial year, ending March 2015, Takata could incur a $500 million charge on its balance sheet.