The Japanese auto parts maker Takata has filed for bankruptcy protection in the United States and Japan after finding itself at the centre of an enormous safety crisis.
In-car airbags made by Takata were found to have exploded in a series of cases and its products were linked to at least 14 deaths.
Tens of millions of vehicles fitted with Takata airbags have since been recalled in the US and various other parts of the world.
The company was founded in the 1930s and is still controlled by its founding family but is now heading for what is expected to be the largest bankruptcy case ever involving a Japanese manufacturer.
Quite what scale compensation claims against the company might ultimately reach remained unclear as the business filed for bankruptcy protection but Takata as a standalone company is not expected to survive.
Elements of its operations that do survive are set to be sold to a one-time rival in Key Safety Systems
(KSS), which is Chinese-owned but based in the US.
KSS, a Michigan-based maker of seatbelts and airbags, has said that it will buy Takata’s production facilities for a sum of around $1.6 billion.
Antitrust regulators in several different countries will need to approve any deal that would see KSS acquire Takata’s factories and increase considerably its share of the world’s airbag market.
Takata’s chief executive Shigehisa Takada said of the deal: “KSS is the ideal sponsor as we address the costs related to airbag inflator recalls, and an optimal partner to the company’s customers, suppliers and employees.
“The combined business would be well positioned for long-term success in the global automotive industry.”
Expectations are that Takata will not be able to repay its creditors in full even after all its assets have been sold off.
The business owes billions of dollars to banks and to some of the world’s leading car makers which have been hit with huge bills for replacing potentially dangerous airbags supplied by the Japanese firm.
At various points in recent years there was optimism that a new owner may have been found for
Takata but the issue of deciding who would be left to deal with its liabilities could not be resolved in a way that made that outcome possible.
The company is now expected to close down once all of its potentially dangerous airbags have been replaced.