Takata said to plan bankruptcy filings as soon as next week

By Craig Trudell and Ma Jie / Bloomberg

Takata, the air-bag maker behind the biggest safety recall in automotive history, plans to file for bankruptcy as soon as next week, according to a person familiar with the matter.

The Japanese company is expected to seek protection in its home country first, with its U.S. subsidiary filing for Chapter 11 bankruptcy shortly thereafter, said the person, who asked not to identified because the matter isn’t public and the timing could change. A representative for the Tokyo-based company couldn’t immediately be reached outside normal business hours.

The Nikkei reported earlier that Takata is expected to file for bankruptcy in Japan as early as this month, with liabilities exceeding $9.02 billion (1 trillion yen). The company’s steering committee has recommended Key Safety Systems Inc., a U.S. air-bag maker owned by China’s Ningbo Joyson Electronic Corp., as the preferred bidder for the entire manufacturer.

Finding a new owner is a crucial step in the restructuring of Takata, whose faulty air bag inflators have been linked to at least 17 deaths worldwide. Mounting liabilities from having to replace more than 100 million air bags forced the company to seek an acquirer that could get it through the costly restructuring process.

Honda Motor Co., a Takata shareholder and the auto-parts maker’s largest customer, first started recalling Accord and Civic models in 2008. The supplier’s air bag inflators use a propellant that can be rendered unstable after long-term exposure to heat and humidity, leading them to rupture and spray deadly metal shards at vehicle occupants. More than a dozen automakers have recalled vehicles since, include Volkswagen AG, Toyota Motor Corp. and General Motors Co.

Takata in January agreed to pay $1 billion to U.S. regulators, consumers and carmakers. The settlement includes a $25 million criminal fine, $125 million in victim compensation and $850 million to compensate automakers who have suffered losses from massive recalls.

The U.S. District Court in Detroit earlier this month said it will consider Kenneth Feinberg, a lawyer who has administered some of the nation’s highest-profile settlements, to replace former Federal Bureau of Investigation director Robert Mueller in overseeing the $1 billion settlement fund. Mueller stepped down from his role to accept an appointment as special counsel to oversee the FBI’s investigation of Russia’s alleged efforts to influence the presidential election.

—With assistance from David Welch

takata

Talk to us

More in Herald Business Journal

FILE - A Boeing 737 Max jet prepares to land at Boeing Field following a test flight in Seattle, Sept. 30, 2020. Boeing said Tuesday, Jan. 10, 2023, that it took more than 200 net orders for passenger airplanes in December and finished 2022 with its best year since 2018, which was before two deadly crashes involving its 737 Max jet and a pandemic that choked off demand for new planes. (AP Photo/Elaine Thompson, File)
Boeing inks deal for up to 300 737 Max planes with Ryanair

At Boeing’s list prices, the deal would be worth more than $40 billion if Ryanair exercises all the options.

Logo for news use featuring Snohomish County, Washington. 220118
Four recognized for building a better community

Economic Alliance of Snohomish County hosts annual awards

Logo for news use featuring Snohomish County, Washington. 220118
Business Briefs: Pandemic recovery aid and workforce support program

Snohomish County launches small business COVID recovery program, and is now accepting NOFA grant applications.

Elson S. Floyd Award winner NAACP President Janice Greene. (Olivia Vanni / The Herald)
Janice Greene: An advocate for supplier diversity and BIPOC opportunities

The president of the Snohomish County NAACP since 2008 is the recipient of this year’s Elson S. Floyd Award.

Emerging Leader Rilee Louangphakdy (Olivia Vanni / The Herald)
Rilee Louangphakdy: A community volunteer since his teens

Volunteering lifted his spirits and connected him with others after the death of a family member.

Emerging Leader Alex McGinty (Olivia Vanni / The Herald)
Alex Zitnik-McGinty: Find a group you like and volunteer!

Her volunteer activities cover the spectrum. Fitting in “service work is important as we grow.”

Opportunity Lives Here award winner Workforce Snohomish and director, Joy Emory. (Olivia Vanni / The Herald)
Workforce Snohomish receives Opportunity Lives Here Award

Workforce offers a suite of free services to job seekers and businesses in Snohomish County.

Henry M. Jackson award winner Tom Lane. (Olivia Vanni / The Herald)
Tom Lane: An advocate for small and local businesses

The CEO of Dwayne Lane’s Auto Family is a recipient of this year’s Henry M. Jackson Award.

John M. Fluke Sr. award winner Dom Amor. (Olivia Vanni / The Herald)
Dom Amor: Working behind the scenes to improve the region

Dom Amor is the recipient of this year’s John M. Fluke Sr. Award

Dr. David Kirtley at the new Helion headquarters in Everett, Washington on Wednesday, Jan. 19, 2022  (Olivia Vanni / The Herald)
Everett nuclear fusion energy company nets first customer: Microsoft

The Everett company, on a quest to produce carbon-free electricity, agreed to provide power to the software giant by 2028.

Hunter Mattson, center, is guided by Blake Horton, right, on a virtual welding simulation during a trade fair at the Evergreen State Fairgrounds in Monroe, Washington, on Wednesday, May 3, 2023. High school kids learned about various trades at the event. (Annie Barker / The Herald)
Trade fair gives Snohomish County kids glimpse of college alternatives

Showcasing the trades, the Trade Up event in Monroe drew hundreds of high school students from east Snohomish County.

A Tesla Model Y Long Range is displayed on Feb. 24, 2021, at the Tesla Gallery in Troy, Mich.  Opinion polls show that most Americans would consider an EV if it cost less, if more charging stations existed and if a wider variety of models were available. The models are coming, but they may roll out ahead of consumer tastes. And that could spell problems for the U.S. auto industry, which is sinking billions into the new technology with dozens of new vehicles on the way.  (AP Photo/Carlos Osorio)
Tesla leases space at Marysville business park

Elon Musk’s electric car company reportedly leased a massive new building at the Cascade Business Park.