Takata Discussing Cash Flow With Bankers On A Daily Basis As Recalls Close In On 36 Million Vehicles

Takata Corp. asked automakers to allow it to pay for costs related to its recalled air bags by installment and is meeting with its bankers almost every day to ensure it has enough cash flow, according to an analyst who attended a company briefing.

The automakers are close to agreeing to the installment proposal, which will allow the company to avoid paying large sums of money at one time, Takata Chief Financial Officer Yoichiro Nomura told analysts Thursday in Tokyo, according to the person. As of the financial year ended March, Takata hasn’t breached conditions that would allow its banks to call back loans, Nomura said, according to the person, who declined to be named as the meeting wasn’t open to the media.

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TheSteve - 5/14/2015 3:22:43 PM

+1 Boost

If we read between the lines, Takata has been impacted so severely by this airbag fiasco, that they're close to insolvency. They're meeting daily with their creditors to reassure them that they're solvent and they can get through this. Don't be surprised if this one crisis is Takata's undoing and they go bust.

Unfortunately, this will leave their customers -- those who bought Takata products like all those faulty airbags -- with little or nothing in the form of recourse or compensation. That means that affected auto manufacturers will be out of pocket when they end up replacing faulty (recalled) airbags with good ones that are sourced from a credible, solvent, supplier. Ouch, all around.

Agent009 - 5/14/2015 4:28:23 PM

+1 Boost

The ramification of everyone placing their eggs in one basket.

Potentially If they go bust then there might be a shortage of new air bags for new vehicle therefore restricting production for almost everyone. One kink in the supply chain is all it takes when the supply chain has little or no depth.

Of course it didn't help that Takata was guilty of price fixing as well.