Airbag maker Takata going ‘pop’ huge concern for industry

Airbag maker Takata going ‘pop’ huge concern for industry

airbagTakata – an airbag supplier to top auto makers – is straining under the weight of the massive airbag recall.

Japan’s transport ministry have extended the recall to another seven million vehicles, this time for cars with airbags that don’t have the drying agent that slows deterioration of the bags’ inflators.

American transport safety officials have said that moisture and temperature changes could make the airbags unstable and prone to explode. This would cause fragments of metal to fire through the car’s interior. This has been blamed for at least 13 deaths worldwide.

The latest recall puts the number of Takata-recalled cars in Japan to 19.6 million. In the US that number is around 63 million – the largest vehicle recall ever in that country.

Questions are being raised as whether the Japanese company can cope with the liability from the recall. Last week Takata said it had borrowed from investment bank Lazard to cover the problem.

Takaki Nakanishi, an independent industry analyst told the New York Times: “Obviously, Takata will have a huge liability that they have to handle.”

He said normally car companies themselves would share the cost of a recall. Takata is a key parts supplier to the industry, giving automakers serious incentive to stop it collapsing under the weight of the giant recall

“If Takata disappears, automakers will be in trouble,” Koji Endo of Japan’s Advanced Research. “Automakers are not happy with the situation, but there is a realistic option they have to pay the cost.”

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