Takata said to be planning bankruptcy filings as soon as next week
Takata plans to file for bankruptcy as soon as next week, paving the way for a sale of the 84-year-old Japanese air-bag maker behind the biggest safety recall in automotive history.
The supplier is expected to seek protection in its home country first, with its US subsidiary filing for bankruptcy shortly thereafter, according to a person familiar with the matter, 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.
Trading in the company's shares were temporarily suspended on Friday following media reports about the bankruptcy plan.
* Takata admits fraud in air bag scandal that has killed at least 16
* Takata airbag recall: What New Zealanders need to know
* 300,000 faulty airbags to be recalled: 'It's 10 times as large as we have ever had in NZ'
Bankruptcy filings would put Takata a step closer to a sale to Key Safety Systems, the US air-bag maker owned by China's Ningbo Joyson Electronic Corp.
A Takata steering committee has recommended Key Safety as the preferred bidder for the manufacturer of faulty air bag inflators linked to at least 17 deaths worldwide. Mounting liabilities from having to replace more than 100 million of the devices forced Takata to seek an acquirer that could help see through the costly restructuring process.
"They were trying to avoid this as much as possible," Scott Upham, the president of Valient Market Research, said of Takata. "That's what has been holding this up. But all of the bidders insisted that this happen so they can manage the liabilities."
A bankruptcy filing would mark the end for an iconic Japanese company that started out as a textile maker and produced parachutes for the Imperial Japanese Army during World War II. Honda Motor, a Takata shareholder and the auto-parts maker's largest customer, first started recalling Accord and Civic models in 2008 due to the flaw that may end up being Takata's undoing.
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, include Volkswagen, Toyota Motor Corp and General Motors.
Automakers have been going to Takata rivals to get replacement air bag inflators. Takata currently provides none of the replacement inflators for Honda and Acura vehicles under recall in the US, according to Chris Martin, a spokesman for the carmaker.
Takata in January agreed to pay US$1 billion to US regulators, consumers and carmakers. The settlement includes a US$25 million criminal fine, US$125 million in victim compensation and US$850 million to compensate automakers who have suffered losses from massive recalls.
The US District Court in Detroit earlier this month said it would 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 US$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.