Report: Takata’s Troubles Continue to Grow as Recalls Widen
Supplier continues to bleed money due to airbag crisis
Automotive supplier Takata is reportedly struggling to get ahead of its current airbag recall crisis, and it failed in its latest financial forecasts to take into account the National Highway Traffic Safety Administration's (NHTSA) mandate that nearly doubled the number of devices that need to be replaced.
Automotive News states that the Japanese supplier reported an annual loss of $121 billion for its latest forecast due to the costs of recalls and settlements with consumers that were injured by rupturing airbag inflators. However, the supplier hasn't accounted the 35 to 40 million additional devices NHTSA added to the recall list, not to mention possible demands from automakers that have had to cover the costs of the airbag recall.
"Takata's recall crisis is like the Titanic hitting the iceberg," said Takeshi Miyao, an analyst from market research firm Carnorama told AN. "You don't realize the enormity until you see the impact from it." The supplier has declined to comment on the matter before the release of its financial forecast.
There have been 13 fatalities reported due to Takata inflators that can deploy too forcefully, rupture, and spray shards of metal and plastic at occupants. Automakers have since recalled over 60 million airbags due to the issue and may rise 118.5 million worldwide after NHTSA ordered an expansion of the recall. A research study hired by a group of automakers revealed in February that moisture seeping into the inflators was the reason why the airbags may rupture, leading to NHTSA's order for a recall expansion. In the U.S., up to 69 million airbags will need to be replaced.
Other investigations are still being conducted but there are difficulties trying to determine the root cause. As a result of the airbag crisis, Takata has started to look for financial sponsors to replenish its capital and enable it to emerge as a new company, according to a source familiar with the issue.