Defective Airbags Plunge Takata Company into Bankruptcy

Public Health Watchdog Breaking News
Public Health Watchdog Breaking News

Takata airbags that have been associated with 11 deaths in the United States, allegedly due to their defective products, has filed for bankruptcy. The Japanese maker of these airbags is estimated to be more than $9 billion in debt, according to CNNMoney. This has led the company to seek bankruptcy protection in Japan and the U.S. This is not expected to affect the enormous ongoing recall.

Takata’s Admission

Takata pled guilty earlier this year to withholding information about the faulty airbags and agreed to pay $1 billion to settle multidistrict litigation (MDL) in the U.S. This agreement was reached due to the company’s admission that the airbags were sold despite the knowledge that some were defective. The $1 billion included a $125 million fund to compensate victims and their families.

In addition, the National Highway Traffic Safety Administration (NHTSA) levied a $200 million fine on Takata, the largest ever. Part of the deal, was that Takata admitted its failure to disclose the defect to the agency, and had withheld vital information despite having that knowledge. Exploding airbag inflators were blamed for approximately 98 injuries.

Personal injury attorneys at Parker Waichman LLP are actively reviewing potential lawsuits on behalf of individuals who have been injured by defective airbags. The firm offers free, no-obligation case evaluations, to anyone seeking legal information and is considering filing a lawsuit.

New Owners

Key Safety Systems, a Chinese-owned company based in Michigan, is reportedly paying $1.6 billion for nearly all of Takata’s operations. But, Key Safety Systems, says it will not get involved with the airbag inflators, which will in time, be wound down, reports CNNMoney.

Following reports of Takata’s bankruptcy filing, Takata stock plunged more than 65 percent at the end of June. The Tokyo Stock Exchange said that its shares were suspended because they were going to be delisted.

Leading automakers including Honda, Toyota, and General Motors (GM), who used Takata airbags in their vehicles, could also be out of pocket, after the Takata bankruptcy filing, because they are probably going to have to cover most of the estimated $5 billion that is needed to pay for replacing tens of millions of the defective Takata airbag inflators still in people’s vehicles in the U.S. and around the world.

At this time, only 35 percent of vehicles with Takata airbags have had their inflators replaced, which meant that it may take until 2023 to make all the affected vehicles safe, according to CNN.

Recycled Airbag Inflators

Takata airbags use ammonium nitrate as an inflator and have served as the foundation for the largest automotive recall in U.S, history. Allegations were made that Takata Corp. was aware that ammonium nitrate was subject to instability with age, rapid change in temperature, and high humidity, but allowed allegedly recalled airbags to be reused in an effort to lower company costs. Unstable ammonium nitrate may unleash an excess of force when the airbag s inflated, shattering the inflator, sending shards of metal shrapnel into the passenger compartment.

It was reported in April 2017, that a 2002 Honda Accord was involved in a relatively minor car accident with a recalled airbag. The young woman driving the car experienced serious injuries when the airbags deployed with such force that it sent shards of metal from the shattered casing into her neck. Shards of metal had pierced her trachea and injured her vocal cords. The woman underwent repair surgery and is healing but may require speech therapy.

It became evident that the 2002 Honda Accord was wrecked in a 2015 car crash, and was written off by the insurance company as a total loss. However, traced the car was traced through AutoCheck, and it was determined the car was given a salvage title, repaired and resold in Las Vegas.

When Honda engineers inspected the car following the crash, it was revealed that the drivers’ side airbag was not original equipment with the car, but rather sourced from a different Honda Accord that was one year older. It was allegedly determined that the defective airbag from the older car had been the subject of a recall for the inflator, bud the inflator had not been replaced. The car was bought without the purchaser being aware of the car’s history.

Some advocates are calling for the creation of a central database that would allow salvage yards to check whether, or not a salvaged part has been the subject of a recall and whether or not it was updated. Others are calling for a law that legally requires a car owner to have a recall properly addressed or face penalties.

The law against selling recalled parts for use in auto repair is seldom enforced. The NHTSA has the authority to impose, and enforce civil penalties against potential violators of the law.

Legal Help for Takata Airbag Issues

Parker Waichman has years of experience representing individuals injured by defective products. If you or someone you know was injured by a Takata airbag, you may have valuable legal rights. We urge you to contact our personal injury lawyers at 1-800-YOURLAWYER (1-800-968-7529).