Photo: Kia
The inevitable, as we all know, is something that cannot be avoided, evaded, or escaped. In the case of Takata, it was pretty clear since 2013 that the Japanese company will not survive the airbag inflator-related recall without taking a nosedive into oblivion. Four years since the mess-up started to unravel, Takata conceded that bankruptcy is the way to go.
The first piece of the domino comes in the form of a filing for Chapter 11 bankruptcy by TK Holdings, the corporation’s U.S. subsidiary, on Sunday. Then Monday morning came, and the Japanese mothership followed suit with the Tokyo District Court, therefore putting Takata on what is, in essence, life support.
All is not lost, though. The helping hand comes courtesy of a U.S.-based company owned by a Chinese holding. Key Safety Systems is its name, and it agreed to pay $1.6 billion to acquire most of Takata’s assets. The deal, according to reports, took almost 16 months for the two parties to agree upon it. Be that as it may, the business’ operations that will survive this takeover are scheduled to go through a bit of reorganization.
“KSS is the ideal sponsor as we address the costs related to airbag inflator recalls, and an optimal partner to the company’s customers, suppliers and employees,” commented Shigehisa Takada, chairman and chief executive officer of the airbag manufacturer. “The combined business would be well positioned for long-term success in the global automotive industry.”
Up to this point in time, Takata’s airbags have been connected to at least 17 deaths on a worldwide scale. More than 100 million vehicles of all shapes and sizes were equipped with substandard airbag inflators, with almost 70 percent of them being vehicles sold in the United States. Incidentally, the airbags in question were produced in Takata’s North American plant.
The first incident happened in 2004, the victim being the driver of a Honda Accord. In 2014, Takata tried to cover up the mess, but legal actioned forced the company to come clean about its business conduct. On that note, here’s hope Takata’s new owner will imbue some responsibility into its business model.
All is not lost, though. The helping hand comes courtesy of a U.S.-based company owned by a Chinese holding. Key Safety Systems is its name, and it agreed to pay $1.6 billion to acquire most of Takata’s assets. The deal, according to reports, took almost 16 months for the two parties to agree upon it. Be that as it may, the business’ operations that will survive this takeover are scheduled to go through a bit of reorganization.
“KSS is the ideal sponsor as we address the costs related to airbag inflator recalls, and an optimal partner to the company’s customers, suppliers and employees,” commented Shigehisa Takada, chairman and chief executive officer of the airbag manufacturer. “The combined business would be well positioned for long-term success in the global automotive industry.”
Up to this point in time, Takata’s airbags have been connected to at least 17 deaths on a worldwide scale. More than 100 million vehicles of all shapes and sizes were equipped with substandard airbag inflators, with almost 70 percent of them being vehicles sold in the United States. Incidentally, the airbags in question were produced in Takata’s North American plant.
The first incident happened in 2004, the victim being the driver of a Honda Accord. In 2014, Takata tried to cover up the mess, but legal actioned forced the company to come clean about its business conduct. On that note, here’s hope Takata’s new owner will imbue some responsibility into its business model.
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