Takata Corporation is considering filing bankruptcy in the U.S. as a way of coping with billions of dollars in losses from fines, penalties and vehicle recall costs related to defective airbags. To date, more than 100 people have been injured and 14 have been killed by faulty Takata airbags that erupted and sprayed metal shrapnel into vehicle cabins. Japanese advisors think that filing bankruptcy could assist Takata in its negotiations with auto makers about sharing billions in recall costs. A bankruptcy judge might approve the bankruptcy if Takata has enough support from car companies. Auto makers are currently shouldering the costs of Takata airbag recalls in the U.S., which could affect up to 70 million airbags and cost more than $12 billion. Although auto makers would like to unload some of the recall costs, they are concerned about Takata's long-term financial viability. These companies prefer competition in the airbag industry to drive down prices and Takata represents approximately 20 percent of the international airbag industry. Takata's negotiations with auto makers are a crucial part of making a separate deal with an auto supplier or private equity firm to give Takata an infusion of cash. Potential investors want assurances from Takata that they will not face significant financial claims from auto makers in the future, according to Japanese advisors to Takata. Takata turned a profit in the second quarter, so it does not currently face a cash squeeze. However, Takata revealed losses of $400 million during the previous two fiscal years and the company faces conditions that cast doubt over its long-term financial health. If you have been injured because of a defective Takata airbag, contact the Takata airbag recall lawyers at O'Connor, Acciani & Levy. We will fight for maximum compensation for the damages you have suffered.
Takata Considers Filing Bankruptcy To Deal With Airbag Recall Costs
