An airbag is at the heart of the Takata bankruptcy

Takata Bankruptcy: Airbag Scandal Finally Brings Company Down

Embattled airbag maker Takata has filed for Chapter 11 bankruptcy protection in Japan and the U.S. The Takata bankruptcy announcement comes as the Tokyo-based company was trying to survive amid an ongoing scandal involving faulty airbag components.

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The defective car safety parts, which can explode and blast shrapnel onto car drivers and passengers, are the alleged cause of at least 17 deaths worldwide, 11 in the United States. The Takata airbags were allegedly also the cause of at least 180 of other motorist injuries and the subject of the largest automotive recall in history.

Sold to Rival Parts Supplier

Under the bankruptcy agreement, Takata will begin to dismantle itself in phases. The first stage will see the company’s assets, such as factories, sold to rival auto parts supplier Key Safety Systems. The transaction is valued at $1.6 billion.

As a part of the agreement with Key, a small portion of Takata’s facilities will continue to operate to produce replacement pieces for the recalls. The parts recall affects 19 automakers.

Takata’s president Shigehisa Takada told reporters at a conference on Monday that he would step down once the transaction with Key Safety Systems was complete.

At least $1 billion from the transaction from the sale to Key will help satisfy a settlement of criminal charges in the U.S. The U.S. Justice Department brought suit against Takata, claiming the company intentionally concealed knowledge of the defective airbag pieces. Most of settlement money, $850 million, will be used to reimburse automakers for covering the cost of the recalls.

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After a $125 million fund for victims, what’s left of the sale will also go toward reimbursing automakers. However analysts said the total cost could be closer to $10 billion. In its bankruptcy filing in the U.S., Takata projected its liabilities at $10 billion to $50 billion, according the New York Times. Car makers will ultimately have to cover the remaining difference.

The Largest Automotive Recall in History

Currently more than 100 million airbags have been recalled globally. That’s the largest automotive-related recall in history. Around 69 million of the recalls are in the U.S., and they affect about 42 million vehicles.

In Japan, more than 70 percent of the recalled airbags have been replaced. However, in the U.S. only 36 percent have been replaced. With that number so low, it means it could be a long time before car owners in the U.S. can get their replacement parts, which unfortunately could result in more vehicular deaths or injuries.

List of Affected Vehicles with Takata Airbags

USA Today published a current list of the vehicles involved in the Takata airbag recall:

Acura

Audi

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BMW

Cadillac

Chevrolet

Chrysler

Daimler trucks and vans

Dodge/Ram

Ferrari

Fisker

Ford

GMC

Honda

Infiniti

Jaguar

Jeep

Land Rover

Lexus

Lincoln

Mazda

McLaren

Mercedes-Benz

Mercury

Mitsubishi

Nissan

Pontiac

Saab

Saturn

Scion

Subaru

Tesla

Toyota

Volkswagen

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