After years of trying to recover from its worldwide airbag scandal, Takata has finally surrendered. The company filed for bankruptcy on June 26, 2017, with estimated debts totaling more than $9 billion.
The company has been drowning in costs and liabilities associated with its defective airbags, with the largest payments possibly to come as more lawsuits go to trial. Their defective airbags have been linked with at least 16 deaths worldwide and nearly 200 injuries.
Takata Chairman Apologizes to Supporters
According to The Los Angeles Times and other news outlets, the Japanese airbag maker stated that they were going through with the bankruptcy so they could keep on supplying airbag replacements for recalled vehicles.
Rival company Key Safety Systems, a Chinese company based in Detroit, has paid $1.6 billion to take over most of the company’s assets. Operations will continue at the company to manufacture the new inflators that will be used as replacement parts.
Takata chairman Shiigehisa Takata apologized on behalf of the company at a news conference on June 26, 2017. He also assured listeners that the company would “find ways” to keep supplying products for replacement parts, and that failing to do so “would have a major impact across the industry.” He plans to leave the company once Key Safety Systems has effectively taken over.
Part of the sale price is expected to be used to reimburse automakers that have shouldered much of the burden of replacing the defective airbags, but the reimbursement will not cover all the costs incurred. Honda, Toyota, GM, and other automakers are likely to end up having to pay for much of the estimated costs to replace the remaining faulty airbag inflators still in use.
At least $1 billion of the sale will also be used to settle criminal charges in the U.S. The company has also already set aside $125 to reimburse victims.
Takata Facilities to Continue Operating to Supply Replacement Parts
So far, only about 36 percent of the defective Takata airbags have been replaced in the U.S., according to Takata’s Vice President. Government entities like the National Highway Traffic Safety Administration (NHTSA) have been working to speed up the process, particularly for high-risk vehicles in hot and humid locations.
At the core of the issue is the propellant that was used in Takata’s airbag inflators, which could become unstable over time, especially when exposed to high temperatures and high humidity. Defective airbags could then explode upon deployment, sending shrapnel into the interior of the vehicle and causing life-threatening wounds.
Key Safety Systems also makes inflators, as well as crash sensors and seat belts, and has stated that it won’t close any of Takata’s facilities.
Exclusively focused on representing plaintiffs, especially in mass tort litigation, Eric Chaffin prides himself on providing unsurpassed professional legal services in pursuit of the specific goals of his clients and their families. Both his work and his cases have been featured in the national press, including on ABC’s Good Morning America.