Japanese air bag maker Takata Corp., found in 1933, filed Monday for bankruptcy protection in Tokyo and the U.S. "We're in a very difficult situation, and we had to find ways to keep supplying our products," Takata's president Shigehisa Takada told the media.
This cleared the way for a $1.6-billion takeover of most of Takata's assets by rival Key Safety Systems, owned by a Chinese company. Key makes inflators, seat belts and crash sensors for the auto industry and is owned by China's Ningbo Joyson Electronic Corp.
Remnants of Takata's operations will continue to make inflators to be used as replacement parts in the recalls. The process could take years. Takata air bag inflators were linked to the deaths of at least 16 people and for at least 180 injuries worldwide. More than 70% of the airbags recalled in Japan have been replaced, and 36% in the U.S. About 100 million inflators have been recalled worldwide, the largest automotive-related recall in U.S. history. Tokyo Stock Exchange delisted Monday the company. At least $1 billion from the sale to Key is expected to be used to satisfy Takata's settlement of criminal charges in the U.S. for concealing problems with the inflators. Takata's total liabilities stand at 1.7 trillion yen ($15 billion), Tokyo Shoko Research Ltd estimated. Takata already has paid $125 million into a fund for victims and a $25-million fine to the U.S. Justice Department.