Takata Will Leave Air-Bag Inflator Business, Report Says

Takata might stop making airbag inflators altogether after fulfilling its recall.

byJustin Hughes|
Takata Will Leave Air-Bag Inflator Business, Report Says

Takata will pull out of the air-bag inflator market under the terms of its pending bankruptcy, according to Reuters. A scenario like this would come after fulfilling the backlog of 100 million inflators recalled that could explode and launch shrapnel at vehicle occupants. Rival airbag manufacturer Key Safety Systems is also in the process of negotiating for control of Takata, which may bode well if it could help produce replacement airbags for affected vehicles around the world.

Replacing the recalled units is of the utmost importance to Takata in any bankruptcy agreement. The majority of cars in the US equipped with faulty Takata airbags have yet to be fixed, primarily because the parts are not yet available. Both manufacturers and the US officials are displeased with the situation, yet the airbag scandal—between the fines leveled against them and the need to replace so many airbags at no charge—has run Takata into the ground. Bankruptcy could eliminate billions of dollars worth of liabilities for the company and help enable it to fulfill the recall backlog more promptly.

Job cuts are also under consideration at Takata, including upper-level managers who were aware of the issues with their airbags and allowed or enabled them to be sold anyway. Plant managers, however, are among those whose jobs would likely be spared in order to continue production of replacement parts as quickly as possible.

To say that Takata's brand name has suffered as a result would be an understatement. It is no surprise that it might no longer produce air-bag inflators once its recall obligations are fulfilled. If Key Safety Systems is successful in its bid to take over Takata, it would rebrand Takata's seat belt and airbag systems under the Key Safety Systems name.

Hopefully it won't be too long before Takata's legal and financial issues are worked out to a point where it can focus on building the replacement parts. This way, dealers would actually be able to fix the affected cars in a timely fashion.