PITTSBURGH (KDKA) — Takata’s chairman bowed deeply and apologized from the bottom of his heart, he said, as his company filed for Chapter 11 bankruptcy protection in both Japan and the United States on Monday.
“Takata has had problems with its airbags, and there’s been a massive recall of their airbags,” said Michael Shiner, a bankruptcy attorney.
Takata’s faulty air bags were recalled after evidence that some would explode on impact, sending shrapnel into victims, injuring instead of saving them.
“Takata is having trouble because it can’t pay of the cost of all the airbag recalls.”
Shiner has 20 years’ experience in bankruptcy, including international bankruptcies like this one.
As usual, he says, it comes down to money.
Takata’s principal creditors, according to court documents, are all primarily auto manufacturers to whom it owes replacement air bags.
“What this bankruptcy is really about is ultimately who’s going to bear the cost of these recalls,” Shiner told KDKA money editor Jon Delano on Monday.
The cost of replacing the tens of millions of Takata airbags still in vehicles around the world is estimated at $5 billion, and only 35 percent of affected cars have had new air bags installed.
But even if Takata gets off hook for paying the cost of new air bags, consumers, says Shiner, should be okay.
“As consumers, it’s your auto manufacturer’s responsibility to fix any defects with your vehicle, regardless of who’s responsible for that defect.”
So if Takata can’t pay, your car manufacturer will.