Bankruptcy Plan Would Make Takata Quit Producing Airbag Inflators: Report

Photo credit: Joe Raedle/Getty Images
Photo credit: Joe Raedle/Getty Images

A restructuring plan under consideration for longtime Japanese auto supplier Takata, responsible for the largest automotive safety recall ever, would make the company stop producing airbag inflators, sources told Reuters. Takata has had to replace more than 100 million defective inflators worldwide.

Takata’s huge airbag recall started with a cheap explosive that the company reportedly knew would be dangerous, which replaced the more expensive components the company once used in manufacturing. The decision led to the biggest recall in the industry, with Takata having to up its recall number more than once. In addition to at least 17 deaths, Reuters reports that more than 150 people have been injured by the defective airbag inflators worldwide.

The bankruptcy filings for Takata—in both the U.S. and Japan—could come as soon as next week, and Michigan-based rival Key Safety Systems, Inc. is in talks with Takata’s steering committee to take over the company. Reuters reports that Key Safety Systems is smaller company in producing seat belts and airbags.


But that’s not the interesting part of the talks: Sources told Reuters the plan to make Takata stop inflator production, though still under consideration, would kick in as soon as Takata finishes supplying the recall inflators and its current contracts for automakers. The contracts, Reuters reports, are likely up in 2020.

A production cut isn’t the only thing in Takata’s future, if things continue to go like they are right now. From Reuters:

Job cuts are also on the table, the sources said, including upper-level managers involved in manipulating inflator test results to conceal possible defects. Many plant managers would likely remain to ensure that production continues during the transition period.

The plan is critical for a bankruptcy restructuring that could be launched as early as next week. Takata is hoping to erase billions in liabilities and resolve the recall of air-bag inflators.

Any bankruptcy would pose limited risk to Takata’s ability to supply the roughly 100 million replacement inflators required to complete the global recall, one of the sources familiar with the company’s plans said. U.S. vehicle safety regulators are putting pressure on Takata and automakers to speed up the replacement of defective inflators in the United States.

Any decisions and bankruptcy filings must be approved by Takata’s board, and the company declined to comment to Reuters on its plans. The bankruptcy plan under consideration would have the other components of Takata’s production—airbags and seatbelts—rebranded as Key Safety Systems products.

Staff writer, Jalopnik

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Only 17 people died?

With the knee jerk reaction some people had not drive with the airbags, I’m going to assume they’ve still saved way more than 17 people.

As shitty as their company policy has been, it’s hardly the massive issue it’s been made out to be.

It’s barely a statistic as far as vehicle deaths go.