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Report: Takata’s Airbag Recall Costs Could Reach $24 Billion
Takata Corp. estimates the widening scope of recalls involving its defective airbag inflators could reach 2.7 trillion yen ($24 billion), a source tells Bloomberg News.
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Takata Corp. estimates the widening scope of recalls involving its defective airbag inflators could reach 2.7 trillion yen ($24 billion), a source tells Bloomberg News.
The source says Takata figures a worst-case scenario would involve the recall of almost 288 million inflators. Roughly 50 million of the devices have been recalled so far by a dozen carmakers.
The recalls cover several types of Takata inflators. But all are powered by ammonium nitrate, a propellant that appears to deteriorate when exposed to moisture and then explode when triggered in a crash.
Bloomberg notes that Takata’s shares plummeted 20% to 414 yen ($3.68) today, shrinking the company’s market value to about 35 billion yen ($307 million). The company’s net assets were worth about 140 billion yen ($1.2 billion) at the end of last year.
Takata has been in talks with its customers about sharing the recall costs. The company also reportedly will seek a capital infusion by September.
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