This month, Japanese airbag maker Takata announced that they are ready to be sold, after filing for bankruptcy protection in the United States, as well as Japan. Eventually, they also revealed that US-based Key Safety Systems is willing to offer $1.6 billion in order to buy the company.
The airbag maker company is in big trouble
Known for being behind one of the biggest recalls in the automotive industry, Takata is currently dealing with tens of billions of dollars in costs and liabilities, after almost 10 years of recalls and lawsuits, reports Reuters, as their airbags have been linked to 17 tragic deaths around the world.
The same source mentions that TK Holdings, the company’s U.S. operations, filed Chapter 11 bankruptcy, with liabilities between $10 and $50 billion, while the Japanese parent company filed for protection instead, with the Tokyo District Court.
Currently, Takata has total liabilities standing at 1.7 trillion yen, which roughly translates to $15 billion, while the final number depends on the conclusions of the discussions with carmaker customers.
Back to the Key Safety Systems deal, the U.S. company would eventually keep all of Takata’s 60,000 employees, in factories spread over 23 countries, as well as the factories in Japan. Basically, this allows them to continue operating without any interruptions, as well as minimal disruptions to the supply chain.
Could this save Takata?
“We believe taking these actions in Japan and the U.S. is the best way to address the ongoing costs and liabilities of the airbag inflator issues with certainty and in an organised manner,” CEO Shigehisa Takada said in a statement.
Eventually, when the timing of the restructuring will be set, the entire top management department would design.
Takata and Key Safety Systems are expected to give more details about the deal in the upcoming weeks, while the bankruptcy processes should be finalized somewhere in 2018. However, lawsuits from clients like Honda, BMW or Toyota Motor Corp are still yet to be finalized.