Japan’s Takata, at the centre of the auto industry’s biggest-ever product recall, filed for bankruptcy protection in the US and Japan, and said it had agreed to be largely acquired for $1.6bn (€1.42bn) by the Chinese-owned US-based Key Safety Systems (KSS).
In the biggest bankruptcy of a Japanese manufacturer, Takata faces tens of billions of dollars in costs and liabilities resulting from almost a decade of recalls and lawsuits.
Its airbag inflators have been linked to at least 16 deaths and 180 injuries around the world because they can rupture and send metal fragments flying.
TK Holdings, its US operations, filed Chapter 11 bankruptcy in Delaware on Sunday with liabilities of up to $50bn, while the Japanese parent filed for protection with the Tokyo District Court yesterday.
Scott Caudill, chief operating officer of TK Holdings, said in a court affidavit that the company “faces insurmountable claims” relating to the recalls and owes billions of dollars to automakers.
He disclosed that Takata has recalled, or expects to recall, by 2019 about 125 million vehicles worldwide, including more than 60 million in the United States. Takata’s total liabilities stand at $15bn, Tokyo Shoko Research estimated.
Final liabilities depend on the outcome of discussions with carmaker customers who have borne the bulk of the replacement costs.
The filings open the door to the financial rescue by KSS, a Michigan-based parts supplier owned by China’s Ningbo Joyson Electronic.
In a deal that took 16 months to hammer out, KSS agreed to take over Takata’s viable operations, while the remaining operations will be reorganised to continue churning out millions of replacement airbag inflators, the two firms said.
The US company would keep “substantially all” of Takata’s 60,000 employees in 23 countries and maintain its factories in Japan.
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