Airbag manufacturer Takata files for bankruptcy protection

New York, NY — Shattered by recall costs and lawsuits, Japanese air bag maker Takata Corp. filed Monday for bankruptcy protection in Tokyo and the U.S., saying it was the only way it could keep on supplying replacements for faulty air bag inflators linked to the deaths of at least 16 people.

The company's bankruptcy filings cleared the way for a $1.6 billion takeover of most of Takata's assets by rival Key Safety Systems, which is based in Detroit but owned by a Chinese company.

Takata's inflators can explode with too much force when they fill up an air bag, spewing out shrapnel. Apart from the fatalities, they're responsible for at least 180 injuries worldwide.

So far 100 million inflators have been recalled worldwide, the largest automotive-related recall in U.S. history.

That includes 69 million in the U.S., affecting 42 million vehicles.

Takata's president Shigehisa Takada told reporters in Tokyo that with the company rapidly losing value, filing for bankruptcy protection was the only way it could carry on.

"We're in a very difficult situation, and we had to find ways to keep supplying our products," Takada said.

"As a maker of safety parts for the automobile industry, our failure to maintain a stable supply would have a major impact across the industry." "There was no other way," he said.

Takada said he intends to leave Takata's management once it is handed over to Key Safety Systems and things are running smoothly. "It would be a big nuisance for the new company if a person like me were to get involved in its management," he said.

The bankruptcy filings by Takata, founded in 1933 as a textiles maker, led the Tokyo Stock Exchange to announce Monday it was delisting the company.