Takata Corp releases statement on bankruptcy filing

Shigehisa Takada whose grandfather founded the company 84 years ago said that he would resign as chief executive once the assets were sold

The 84-year-old Tokyo-based auto parts giant is facing lawsuits and huge costs over an airbag defect linked to at least 16 deaths globally. By 2020, it will cover 64 million to 69 million inflators in 42 million cars, according to the National Highway Traffic Safety Administration. This points to around 40 million air bags as yet uncollected in the USA and Japan combined.

Aairbag maker Takata has filed for bankruptcy in its home nation of Japan and in the United States, as the firm continues to bear the brunt of a scandal related to faulty airbags. The company was part of a group of global automakers that held discussions with Takata and Key Safety Systems prior to Monday's filing.

For Takata, the decision to file for bankruptcy is a stunning fall from grace. In 2013, the company issued a recall for vehicles equipped with airbags that used ammonium nitrate in the inflation process.

"At a board meeting on June 26, our company made a decision to begin procedures in filing for bankruptcy protection", Takata said in a statement after making the filing with the Tokyo District Court.

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Takata's bankruptcy is thought to be the largest ever by a Japanese manufacturing company. Its new owner said there were no immediate plans to reduce Takata's employee headcount or close factories, as it tries to keep the business stable for customers.

The company has admitted that its employees knew about the potential problems with its air bag inflators as early as 2000.

Shigehisa Takada, chairman and CEO of Takata, answers questions during a press conference in Tokyo on June 26, 2017.

In February, Takata Chief Financial Officer Yoichiro Nomura appeared in federal court in Detroit on behalf of the corporation to plead guilty to wire fraud and to express the company's "deep regret". As part of its bankruptcy filing the company agrees to sell most of its assets to Sterling Heights-based Key Safety Systems for $1.6 billion.

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February 27, 2017: Takata pleads guilty to criminal charges in a USA court, agreeing to pay $1 billion in penalties, and its chief financial officer says that the company's conduct has been "deeply inappropriate". The penalties include $850 million in restitution to automakers, $125 million for victims and families and a $25 million criminal fine.

- Some proceeds will fund an $850 million fund, already agreed with the U.S. Department of Justice, to help satisfy claims from drivers who bought cars with airbags using PSAN inflators.

Takata's biggest customer, Honda, first started recalling Accord and Civic models in 2008 to replace the supplier's air bags.

Honda also reiterated its position that it did not hide knowledge of Takata defects, but instead was itself a victim of deception by Takata officials.

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January 22, 2016: Federal auto safety regulators attribute a tenth death to a ruptured Takata air bag.

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