Takata succumbs to airbag scandal, declares bankruptcy image

Japanese automotive parts supplier and airbag manufacturer Takata – one of the most important automotive safety suppliers but made famous by the airbag scandal – has officially went into bankruptcy protection in Japan and the United States.

Live during a special news conference in Tokyo, CEO Shigehisa Takada took a bow to apologize for the demeanor of the company, “If things are left as is, we are aware of risks that we may not able to raise fund and to continue stable supply of products,” he commented. “In light of the management environment we face, the state of negotiations with the sponsor candidate and carmakers, and the external expert committee’s opinion, we have decided today to file for bankruptcy protection.” Takada further explained they have decided to sell the company assets to access cash – with U.S. supplier Key Safety Systems acquiring “substantially all” of Takata’s global assets and operations for $1.59 billion.

“We spent much time on negotiations, it was extremely difficult to reach an agreement with more than 10 carmakers worldwide and a sponsor candidate company,” the CEO added. Takata is still discussing with automakers about liabilities, with industry experts discussing about $10 billion, covering penalties, ongoing recalls, and settlements. As a reminder, Takata is the main culprit for the world’s largest single recall in automotive history – with airbags malfunctioning with the potential to injure and kill people.