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Takata Losses Deepen on Airbag Woes
Takata Corp. says it expects to report a net loss of about 64 billion yen ($563 million) for the fiscal year ending March 31.
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Takata Corp. says it expects to report a net loss of about 64 billion yen ($563 million) for the fiscal year ending March 31. The company previously expected a 20 billion-yen ($176 million) profit for the year.
Takata blames a special 112 billion-yen ($985 million) charge linked to its explosion-prone airbag inflators. Sales for the year are likely to shrink 9% to 650 billion yen ($5.7 billion). The company expects its operating profit for the year will drop 5% to 40 billion yen ($352 million).
For the first time Takata is acknowledging risk to its ability to survive its ever-expanding airbag inflator crisis, The Nikkei observes. So far 19 carmakers have committed to recalling about 100 million of the devices, which have been linked to at least 16 deaths.
The company has posted nearly 11 billion yen ($97 million) in losses connected with recalls through the first three fiscal quarters and is booking 97 billion yen ($853 million) against future losses. Analysts have estimated the actual cost of the recalls at roughly 1 trillion yen ($8.8 billion). Carmakers conducting the recalls have not yet demanded partial compensation from Takata for the campaigns.
The company continues to seek a financial savior. Carmakers and the two leading bidders, Sweden’s Autoliv and U.S.-based Key Safety Systems, are pushing for a court-mediated restructuring.
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