Trading suspended for shares of Takata after report claims Takata is filing for bankruptcy protection.
–Takata reportedly will be sold to Key Safety Systems for $1.8B
The writing was on the wall as early as last year for the Tokyo-based auto parts company but it looks like it’s about to be official. According to the Nikkei Asian Review in a report that shut down trading of Takata shares on the Tokyo Stock Exchange earlier today (Apr. 26,2017) Takata operations will be sold to Key Safety Systems a U.S. based subsidiary of Ningbo Joyson Electronics whereas Takata has the onus to take care of any outstanding debts stemming from numerous massive recalls of defective airbags. Shortly after, Takata as we know it, will cease to exist, operating under a new company name.
Shares of Takata hovered around $26 a share in 2013 before recalls started to roll into an all-time low of just around $4 as of yesterday’s trading.
Earlier last year Ningbo Joyson Electronics acquired Takata’s closest competitor, Key Safety Systems Inc. for $920 million. From then on rumors linked Ningbo to make moves towards acquiring Takata becoming a key player in the active and passive safety systems market for cars. Ningbo Joyson plans to acquire Takata for $1.8 billion.
Takata’s airbag recall troubles stem all the way back from 2013 when several automakers recalled vehicles equipped with Takata-made airbags. In 2014, Takata admitted that its Mexican subsidiary mishandled the manufacture of explosives propellants and improperly stored chemicals used in the airbags leading to moisture that destabilized the propellant insides. It was further revealed that Takata inflators were not perfectly sealed and were investigated for filing fraudulent test results. Helium is injected into an airbag and placed in a vacuum chamber and if helium is detected, seals are bad and the inflator fails. Takata’s policy allowed repeated testing of the failed inflator with the inflator sooner or later passing as previous helium already leaked out.
In the United States alone, more than 11 deaths have been linked to their airbags. 35 separate automakers have been affected by Takata’s defective airbags, the two largest companies being Honda and Toyota. Honda has since discontinued use of Takata as a supplier for airbags.
Takata has been an automotive industry icon for more than 84 years with over 47 thousand employees under its watch. It’s a shame to see such a epoch-defining safety company get dragged through the mud for such a simple oversight in testing but reparations must be made on the global stage. The drama will only become more public and shared as Takata’s operations find a new home with their China-based savior.
