Takata Fails To Forecast For 40 Million Recalls - Finances Now In Peril

The embattled Japanese supplier chalked up its latest forecast -- for a 13 billion yen ($121 million) annual loss for the year ended in March -- to charges it’s booking for recall costs and settlements with consumers injured by its rupture-prone airbags. Those 20.1 billion yen in provisions were announced days before a U.S. regulator’s order that may add 35 million to 40 million devices to the recall list.

Also unaccounted for are the demands Takata may face from automakers that have shouldered most of the financial burden of the biggest safety crisis in the industry’s history. Mazda Motor Corp. -- one of the relatively smaller carmakers affected by the airbag recalls -- booked twice as big a charge as Takata last fiscal year. The supplier also still faces class-action lawsuits in the U.S. for which it’s been unable to estimate the financial toll.

TheSteve - 5/10/2016 1:14:43 PM

0 Boost

Just months after this crisis broke and Takata had to start issuing recalls, they were in serious financial doo-doo. At that time, they had daily phone calls with their banks to prove their solvency... on a DAILY basis! They were that close to bankruptcy.

It comes as no surprise to me that today, Takata is... well... close to bankruptcy.

Agent009 - 5/10/2016 3:05:53 PM

+2 Boost

How were they that naïve?

You base your ENTIRE global production on a flawed design and you think only a small portion are going to be recalled? Their head is STILL in the sand.

TomM - 5/10/2016 9:16:23 PM

+2 Boost

It really makes no difference. In the end - Takata will have to declare the Japanese equivalent of Chapter 11 - or go belly up. Either way - a lot of people will have to step forward to fix the cars because technically - the problem is the manufacturers fault (Ie -the Car Maker).