Takata, the Japanese safety equipment company, known for its seat-belts and airbags is in the middle of one of the worst safety scandals in the history of automobiles.The company has been brought down by the huge cost related to recalling of its faulty airbags across the world.
The scandal involves deaths and injuries that has been been recorded because of the opening of airbags manufactured by Takata wherein the blast propels a shrapnel into drivers and passengers. With debts mounting to more than 9 million dollars, the company has filed for bankruptcy in both Japan and in US. A major share of the business is to be acquired by Key Safety Systems, a Japanese company owned by a Chinese business group Ningbo Joyson Electronic Corp which will pay around 1.6 billion dollars to buy the bankrupt company.
“We caused troubles for our supporters, those who cooperated with us and the creditors,” Chairman Shigehisa Takada said at a news conference Monday where he bowed before the cameras. “On behalf of Takata, I apologize deeply from the bottom of my heart.”
The company which started out as a textile manufacturer more than 80 years ago had later diversified into seat-belts and other safety equipments. The proceeds from the sale of its business to Key Safety Systems will be used by Takata to cover the costs associated with the recall.
“The sad saga of Takata … has resulted in the implosion of one of the automotive industry’s oldest and most successful suppliers due to technical hubris, mismanagement and a systemic corporate culture of manipulation,” said Scott Upham, the CEO of Valient Market Research.
Takata’s bankruptcy is unlikely to affect the recall as the company will be supplying around only 25% of the replacement inflators while the rest will be provided by its competitors.
Key Safety Systems would not be touching Takata’s airbag division and despite a disastrous airbag business, Takata’s other operations are in good shape which has tempted Key Safety Systems to acquire the company.