Takata, the beleaguered airbag manufacturer struggling under the weight of the largest consumer safety recall in U.S. history, reportedly plans a meeting with major automakers Friday to determine whether the carmakers would extend financial aid to the floundering parts supplier. At the meeting, sources in Tokyo told Bloomberg today, Takata will lay out its business plan, using the plan to gauge automaker reaction to any request for funds.
So far, Honda and Nissan have said they have received invitations to the meeting, a source told the financial news service. They declined to provide further information. Takata also declined to comment. Toyota and Fuji Heavy Industries, Subaru’s parent said they were not aware of Friday’s meeting. Mitsubishi was unavailable. “It’s really a rare case for a Japanese supplier to call up automakers and hold such a joint meeting,” Takeshi Miyao, an analyst at researcher Carnorama in Tokyo, said. Miyao ndicated that while airbag manufacturer may have been seeking help from individual carmakers before, “I would guess this time they decided to hold a meeting” on a larger scale.
The meeting follows closely on the heels of the 10th reported fatality involving a Takata airbag inflator. The news dealt the already-struggling parts supplier a body blow as its stock sank Monday by 9.8 percent. Takata’s stock slumped to its lowest level since March 2009. According to the National Highway Traffic Safety Administration (NHTSA), the latest death occurred in November when a Ford Ranger pickup swerved off the road and hit an obstruction. The airbags deployed, injuring the driver. On deployment, the airbag inflator housing shattered spraying shrapnel into the passenger compartment, wounding the driver who later succumbed to the injuries. More than 100 others have also been injured.
At the time of the information release, a spokesman for NHTSA, Gordon Trowbridge, indicated that 5 million vehicles have been added to the ongoing recall because of this incident and three other failures in a series of agency inflator tests. He indicated that 1,900 inflators had been subject to testing.
The number of cars now involved in the recall is 23 million, making it the largest U.S. car safety recall in history. Worldwide, the number of vehicles recalled is more than 50 million. Estimates of the amount of additional funding Takata may need to meet the latest recall numbers are between $5 and $6 billion.
The importance of the announcement Friday is that the recall has now expanded beyond a single automaker. Until the NHTSA announcement, Honda had been the only automaker reporting deaths related to exploding airbag inflators. Now, Ford has been added to the mix. Other manufacturers may ultimately include Volkswagen, Honda, Daimler, Audi, Mazda, Saab and BMW, Japan’s Transport Ministry said Monday.
The Nikkei newspaper has also reported that Takata and rival manufacturer Daicel have been discussing ensuring a stable supply of inflators to meet the demands of the recall. Also, said Daicel spokesman Masahiko Hirokawa, no decision has been reached on whether Daicel will invest in a joint venture with Takata. Nikkei reported on the possible venture.
Takata is facing potential liabilities that are huge. No one can put an exact price on it at the moment because Takata’s level of compensation to carmakers depends, of necessity, on the extent of its responsibility for the defect. Indeed, the Nikkei reported Monday that Takata will separately seek assistance from carmakers as recall expenses mount. The airbag manufacturer hopes to have automakers pay some costs, easing pressure for discounts on parts. “Takata has to share costs from the recalls to some extent,” Tadashi Ono, a Tokyo-based analyst at Japan Credit Rating Ltd. Ono said further that even if its scope of responsibility for the recalls is small, Takata will still face huge expense because of the number of vehicles involved.