Carmakers Expect to Pay Most Takata Recall Costs

Takata Corp.’s bankruptcy is all but certain to leave carmakers to cover most of the expense of recalling and replacing the supplier’s faulty airbag inflators.

Honda, Nissan and Toyota all say they don’t expect to be reimbursed by Takata for the bulk of their recalls after the company filed for bankruptcy protection on Monday.

About 120 million of Takata’s explosion-prone devices are being called back by 19 carmakers, 17 of which are listed as unsecured creditors in the supplier’s court filings. Takata told reporters on Monday it can’t specify its liabilities because it hasn’t agreed with its carmaker customers about how to allocate them.

Takata’s bankruptcy-related asset sale to Key Safety Systems Inc. will generate $1.6 billion. The company agreed in January to pay $1 billion to settle claims by the U.S. Dept. of Justice that includes $850 million in compensation to carmakers.

But that amount is dwarfed by the actual costs to replace the flawed inflators. Bloomberg News notes that Toyota has set aside 570 billion yen ($5.1 billion) for Takata airbag inflator replacements. Honda has allocated 556 billion yen ($5 billion). Audi, BMW and Daimler have set aside €232 million ($260 million), approximately €200 million ($224 million) and €563 million ($630 million), respectively, for similar recall costs.