DETROIT (AP) — Japanese air bag maker Takata Corp. is expected to file for bankruptcy
DETROIT (AP) — Japanese air bag maker Takata Corp. is expected to file for bankruptcy protection in Japan and the U. S. on Monday, having been dragged into financial trouble by millions of faulty air bag inflators that can kill or injure people.
The inflators, which fill up air bags in the event of a crash, can explode with too much force and spew metal shrapnel. At least 16 deaths worldwide and more than 180 injuries are blamed on the inflators. They also touched off the largest automotive recall in U. S. history, that began in 2008, with up to 69 million inflators and 42 million vehicles affected. Worldwide, about 100 million inflators are being recalled.
What car owners need to know about the massive recall:
WILL THE RECALLS CONTINUE?
Yes. Automakers are ultimately responsible for the safety of their vehicles, and they have been funding the recalls.
Takata’s assets are expected to be sold for $1.6 billion to a rival company, Key Safety Systems, and part of Takata will remain under a different name to make replacement inflators for the recalls. Money from the sale will go to pay claims against Takata, including a court-ordered $850 million that will reimburse automakers for their expenses.
Another $125 million will go to victims and Takata will pay a $25 million fine to the U. S. government. It’s not clear yet where the rest of the $1.6 billion will go.
WHAT’S WRONG WITH THESE AIR BAGS?
Three independent reports concluded that the chemical Takata uses to inflate its air bags — ammonium nitrate — can degrade after long-term exposure to environmental moisture and high temperatures. If the ammonium nitrate degrades substantially, it can cause the inflators to become over-pressurized and rupture during air bag deployment.
