Takata filed for bankruptcy Monday and will sell a majority of its business to Michigan-based Key Safety Systems for $1.6 billion, according to court filings and company statements.
As , Key Safety Systems—owned by Chinese electronics supplier Ningbo Joyson—emerged as the leading bidder for Takata. However, Takata’s airbag division will be shut down sometime in 2020 after it finishes manufacturing a sufficient number of replacement inflators for the airbag recall, which involves 32 car brands and 100 million faulty inflators around the world. Takata, which has extensive manufacturing in seatbelts, steering wheels, and other automotive components, will retain its Tokyo headquarters and all employees.
Takata has billions in liabilities stemming from class-action and individual state lawsuits, federal fines, and lost sales as a result of its shrapnel-exploding airbag inflators that first surfaced on Honda vehicles in 2008 and in nearly every major automaker’s products by 2014. Automakers are owed at least $850 million for recall-related costs, while victims and their families have been allocated $125 million. Those fines were part of a settlement reached with the U.S. Department of Justice in February, during which Takata and three executives . The company had covered up its engineering defects over more than a decade. The National Highway Traffic Safety Administration has assessed an additional $180 million in fines, according to Takata’s creditor list, after fining the supplier $70 million in 2015. The states of Hawaii and New Mexico have pending lawsuits against Takata, as does the U.S. Virgin Islands, Canada, and a multidistrict litigation filed in Miami. At least 17 people have died worldwide from Takata’s faulty airbag inflators (11 in the U.S.), and at least 184 people have been injured.
CEO Shigehisa Takada apologized for the company’s failures in a press conference early Monday morning. Takada, whose family owns the majority stake of Takata, will step down and potentially liquidate his shares in the company. He had said in June 2016 that he would step down once Takata created a “new management regime.” At this point, none of Takata’s divisions, factories, or contracts have been affected.