News

Fiat Chrysler Automobiles (FCA) announced that it will stop using Takata airbag inflators that don't contain a chemical drying agent that have been proved to be less safe. The plan is to go in place as soon as next week until all units are removed in mid-September.

The inflators in question are ones that aren't equipped with a non-desiccated ammonium-nitrate chemical. In the FCA lineup, it appears that the Jeep Wrangler is the only model that comes with these specific airbags, which won't be a big overhaul for the Detroit-based automaker.

Takata has been in the news and under close scrutiny for over a year for having faulty airbags that could potentially deploy and spray out shrapnel into the face and body of the driver and passengers. The Japanese airbag company has had to deal with close to 70 million recalls worldwide since 2008 from 15 different automakers. Due to the explosive airbags, 13 reported deaths have been confirmed along with more than 100 other injuries reported.

Takata has ruled out using bankruptcy as a way of mitigating liabilities from its record airbag recalls and is instead seeking buyers that could take a controlling stake and carry the company through its safety crisis, according to a person with knowledge of the restructuring process.

Lazard, Takata’s financial advisor, will meet manufacturers as well as financial firms with the aim to find buyers by the fall, according to the person, who asked not to be named because the discussions are private.

Takata’s plan is to remain listed and maintain its core seat-belt, airbag and steering-wheel businesses, while selling off non-core operations, the person said. Company spokeswoman Akiko Watanabe declined to comment.

Any Takata suitor will be betting it can still make a return even after resolving claims from automakers, which until now have shouldered the vast majority of the costs of replacing air bags tied to the auto industry’s unprecedented safety crisis. Recalls of the devices, which can deploy with too much force and spray metal and plastic at passengers, are expanding by as much as 40 million units in the U.S., after 13 fatalities worldwide.

“There is no advantage and no one will benefit from turning Takata around through bankruptcy in this case,” said Taketoshi Tsuchiya, a credit analyst in Mizuho Financial Group’s fixed-income group in Tokyo. “Automakers can’t say they won’t go through with the recalls because Takata filed for bankruptcy. They have to continue paying for the costs on their own without Takata.”

New Management

In exchange for injecting capital, the founding family’s stake will be diluted, the person said. The company has targeted having new management in place this year, replacing executives including President Shigehisa Takada, the person said. A consortium of investors is also an option to raise funds.
Talks with potential buyers are at the preliminary stage and no offers have been made, the person said. Takata is negotiating with customers led by Honda over how much of the multi-billion dollar recall bill it will have to pay.

Takata is willing to be flexible with the restructuring plan as long as its top objective of supplying replacement air bags in a stable manner is met, the person said. Japan last week ordered the replacement of air bags in 7 million more vehicles, expanding the total number recalled in the country to about 19.6 million. Regulators earlier this month forced automakers to roughly double the number of air bags recalled in the U.S., to as much as 69 million.

“Now, the focus is on how Takata and automakers share the costs of air-bag recalls,” said Shintaro Niiimura, an analyst with Nomura Holdings Inc. “If Takata has to owe the majority of it, it would make it difficult for them to secure enough funds.”

TORONTO — Transport Canada has released a detailed list of vehicles being recalled in Canada due to faulty airbags made by Japan’s Takata Corp., saying 1.2 million vehicles in this country are part of the worldwide recall.

The list of affected vehicles was posted online and includes the Honda Civic, Accord, and CR-V, Chrysler products, including the Dodge Ram and the Chrysler 300, BMW sedans and the X5, and Ford’s Ranger and Mustang.

The majority of the affected models are from the 2001 to 2011 model years, although more recent Ford Mustang models are also affected.

The Takata airbag recall began in 2008 over concerns that airbag inflators can explode with too much force, spewing metal shrapnel into drivers or passengers when deployed.

American regulators say six people have been killed and more than 100 injured due to the problem, though Transport Canada says it has no reports of any deaths or injuries in Canada from consumers or auto manufacturers.

Last week, the U.S. National Highway Traffic Safety Administration said Takata agreed to declare 33.8 million airbags in the U.S. defective, triggering the largest auto recall in history.

The full list of the 1,242,111 vehicles included in the expanded recall can be found on Ottawa’s HealthyCanadians.ca website, while a list of affected models in older recalls for the same issue can be found on Transport Canada’s website.

Affected vehicles include Honda’s Civic, Accord, Odyssey, CR-V, Pilot, Element, and Ridgeline models; Acura’s TL, CL, MDX, and 1.7EL models; Chrysler’s Aspen and 300 models; Dodge’s Charger, Magnum, Ram, Dakota, and Durango models; Ford’s Ranger and Mustang models; as well as BMW’s X5 and 3 Series and 5 Series models.

Consumers in Canada and the United States have launches class-action lawsuits against automakers and Japan-based Takata Corp. for failing to provide timely warnings about the problem.

The first recall for issues with Takata airbags in Canada came in 2008. It included 91,447 vehicles involving two Acura models and two Honda models produced in 2001 and 2002.

That recall expanded in 2010 to include more model years as well as Honda CRVs and Odysseys produced in 2002.

In 2013 and 2014, vehicles from Mazda, Toyota, General Motors, Nissan, BMW, and Subaru were added to the recall, as well as more Honda models.

Chrysler Canada reported a voluntary recall of more than 258,000 vehicles in January.