Takata's restructuring plan unveils in May for car makers

By Staff Writer

Feb 04, 2016 04:05 AM EST

Takata Corp, engaged in making air bags at the center of a global consumer safety crisis, will present its restructuring plan to automakers in May. The restructuring plan may cover the sharing of recall costs. Takata Corp hopes to finalize an agreement with automobile majors by May. Pressure has been mounting on Takata over air bag crisis as several automobile companies started recalling millions of vehicles equipped with defective airbags. 

Takata Corp is also involving a third-party panel helping it formulate the restructuring plan. However, Takata's spokesperson, Toyohiro Hishikawa says he's not aware of the schedule and restructuring plan. Takata is hoping that once agreement with automakers is finalized then it'll give more clarity on recall costs.  
Bloomberg reports that in several accidents, a number of car owners of several automobile companies were affected by the air bag crisis causing deaths. Arriving on final agreement on recall costs would also give clarity on liabilities for Takata in cases pertaining to air bag crisis. For instance, Honda Motor Co was affected by such air bag crisis resulting in 11 deaths. It involved recalling of over 20 million vehicles in the US. 

About 14 automakers recalled 28 million airbag inflators so far. The metal casing used in airbags is propellant. The millions of cars have defective inflators made by Takata, said two senators, who urged the Obama government to further expand airbag recalls. Richard Blumenthal of Connecticut and Edward Markey of Massachusetts, both Democrats, wrote a letter to Obama Administration.

The Democrats senators further called for recalling every Takata airbag that has propellant that contains a compound called ammonium nitrate. This can degrade over a time and become unstable, they said in the letter, as reported by The New York Times. The letter follows the death of Joel Knight. 

Knight was killed in a car crash in December 2015. Knight was driving his 2006 Ford Ranger and after hitting a stray cow in South Carolina, the airbag ruptured spraying metal debris into his throat. Similarly ten deaths and over 100 injuries have been reported linked to the defective airbags. 

Reuters reports that Takata recalled airbag inflators in 5.1 million US vehicles. The US Auto Safety Regulators on Tuesday said that Takata Corp declared 5.1 million US vehicles have defective airbags. The company also disclosed the 11th death that could be linked with defective airbag. 

Ford Motor Co has announced a recall. So far nine deaths were reported in the US due to defective airbag made by Takata. Honda, BMW, Volkswagen, Audi, Daimler Mercedes Benz, Mazda Motor and Saab Ab were in the list of auto companies, which announced recalling the vehicles with defective Takata air bags.  

Takata is feeling the heat as automakers approach the eight-year mark. Honda owns 1.2 percent stake in Takata. Honda first recalled vehicles with air bag inflators. Because, these air bags were deployed with too much force and also results in spraying metal and plastic shards at drivers and passengers.

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