Japan's Takata is considering a bankruptcy filing for its U.S. unit as the air bag maker looks for a sponsor to help pay for liabilities related to its faulty inflators, a source told Reuters. Fred Katayama reports.
Ailing air bag maker Takata is considering filing for bankruptcy protection for its U.S. unit, a source told Reuters. Its American arm, TK Holdings, is struggling to supply replacement parts for defective air bag inflators, which have been linked to at least 16 deaths worldwide. TK accounts for nearly half of Takata's sales, and the company has instituted the largest auto safety recall in U.S. history. The source said a Chapter 11 filing is not expected soon. That's because Takata first has to find a sponsor to help pay for liabilities and reach an agreement with creditors. Reuters Correspondent, David Shepardson. (SOUNDBITE) DAVID SHEPARDSON, REUTERS CORRESPONDENT, (ENGLISH) SAYING: "After a long time, years of dealing with this issue, and recalls of close to seventy million inflators, around a hundred million worldwide, that Takata is moving closer to taking the difficult step necessary to restructure the company and move forward. And one of those, as painful as it might be, is a possible bankruptcy." Takata says it would prefer to reach an out-of-court settlement over a court-ordered bankruptcy. That, it says, would help ensure a stable supply of inflator replacement parts required in the recall.