A filing to restructure doesn't relieve a manufacturer of recall responsibilities.
Takata says Chapter 11 proceedings could be over in the first quarter of 2018, but anyone expecting a quick and simple process needs to reckon with the history of other companies that filed for bankruptcy while facing faulty-product class actions.
"The proposed structure for the potential transaction is meant to minimise transaction risk and supply chain disruption concerns for Takata's (automaker) customers", Luo added. More than a dozen other automakers including Volkswagen AG, Toyota Motor Corp. and General Motors Co. have also recalled vehicles fitted with the Japanese company's devices.
"The big risk", Rasmussen said, "is how much are the assets worth versus what's the cost to do the replacements".
In February, Takata Chief Financial Officer Yoichiro Nomura appeared in federal court in Detroit on behalf of the corporation to plead guilty to wire fraud and to express the company's "deep regret".
As a result, the company has seen its liabilities shoot up to 397.8 billion yen as of March, while it posted 30 billion yen in net assets, down sharply from about 160 billion yen five years ago.
"There's not enough money", Upham said.
In the US alone, about 43 million air bag inflators are now subject to recall, and only about 38 percent have been repaired as of May 26, according to data on the NHTSA's website.
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Takata is on the hook for billions of dollars to banks and automakers, which have been covering the replacement costs of tens of millions of the recalled air bag inflators.
The challenges for the acquirer are manifold.
Takata faces billions in lawsuits and recall-related costs to its clients, including Honda, BMW, Toyota Motor and others, which have been paying recall costs to date. It faces a talent exodus and auto industry distrust.
The Tokyo Stock Exchange suspended the stock from trading as of 8:20 a.m.in Tokyo. Key Safety, which makes active and passive safety systems for vehicles, is an independently operated subsidiary of Chinese supplier Ningbo Joyson Electronic Corp.
Its new owner said there were no immediate plans to reduce Takata's employee headcount or close factories, as it tries to keep the business stable for customers. Yet only about 15.5 million of the 69 million inflators had been replaced as of the end of April.
June - Takata CEO Shigehisa Takada, grandson of founder, says he will resign after a "new management regime" is found.
May - NHTSA says Takata admits some inflators faulty. "We look forward to finalizing definitive agreements with Takata in the coming weeks, completing the transaction and serving both our new and long-standing customers while investing in the next phase of growth for the new (Key Safety)". "The No. 1 priority is the safety of the driving public, and I think everybody realizes that".
Honda said it would continue talks with the supplier but anticipated difficulties in recovering the bulk of its claims.
In 2000, the company started using a chemical, ammonium nitrate, as a propellant in its airbag inflators. In the air bags being recalled, Takata didn't use a chemical desiccant, a drying agent that can counteract the effects of moisture.