Airbag Disaster

German Carmakers Face Financial Hit from Takata Bankruptcy

A Takata airbag that was removed from a 2001 BMW vehicle under factory recall program is shown in Alexandria Virginia
A Takata airbag removed from a BMW as part of a factory recall. Picture source: Reuters

Not Volkswagen’s dieselgate scandal, but defective, and at times lethal airbags inflators, have caused the to-date biggest recall in automotive history. Japanese car parts maker Takata, which had been plagued with numerous lawsuits since the defect became public in 2014, is now pulling the plug and filing for bankruptcy protection, according to news agency Reuters. But with some 20 percent of worldwide cars being equipped with the Japanese system, the bankruptcy is bound to have ripple effects across the entire industry.

Damages associated with the global recall of the defective airbag systems, which have been blamed for at least 16 deaths and more than 150 injuries, are estimated to total some €10 billion, or $11.1 billion. The casualties were caused by exploding airbag inflators that blow apart a metal canister which causes metal shrapnel to spew through the car. About 100 million inflators have been recalled worldwide. Those damage claims come on top of the €8 billion in debt family-controlled Takata already faces.

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