Takata may take a $500M charge and a net loss over airbag recall

Article by Christian A., on June 30, 2014

Takata Corp. could take a $500-million charge and post a net loss this year as an expanding recall of airbag inflators gives rise to financial worries despite its deep pockets. A number of carmakers across the globe have called back 10.5 million vehicles over five years to fix Takata airbags that could explode and shoot shrapnel at drivers and passengers.

Creditors, however, are not overly concerned about Takata’s financial health as it still boasts of around $1 billion of cash on its books, banking sources told Reuters. Despite that, creditors are observing the supplier after customer-carmakers recalled 5.2 million cars this month due to the issue.

Koji Endo, an analyst at Advanced Research, said that there are concerns that the volume of transactions with carmakers might decline due to the recall.

He, however, remarked that Takata has long had strength in design and development – which means that it would be hard for carmakers with large order volumes to shift to other suppliers in the short term.

The issue has already prompted a nearly 30-percent drop on the shares of Takata since the start of 2014. Takata’s Japanese customers like Honda Motor Co. and Toyota Motor Corp. this month called back millions vehicles acround the world equipped with Takata’s airbags, over concerns of defective possibly defective air bag inflators made in 2000-2002.

Honda and six other carmakers separately announced this week that were going to issue recalls of vehicles some high-humidity regions of the United States, as per request of the National Highway Traffic Safety Administration.

The affected vehicles will have their Takata air bag inflators replaced. A number several analysts were estimating a cost per recalled vehicle of between $90 and $100, based on replacement part prices, labor costs and other factors.

Topics: takata, airbag, recall

If you liked the article, share on:

Comments

Recommended

A lot of fans are excited with the news that Porsche could be unveiling a performance version of its Panamera 4 E-Hybrid plug-in hybrid during the 2017 Geneva Auto Show. ...
by - February 25, 2017
Tesla is finally setting a more “definite” schedule with regards to the official launch of the Tesla Model 3 electric car. A “limited production” is said to be slated to...
by - February 25, 2017
Are you a big fan of legendary boxer Mike Tyson, the former heavyweight world champion? Or are you a big fan of the iconic Ferrari F50? Either way, you will...
by - February 24, 2017
It seems that AM-RB 001 hypercar is not the only vehicle project that Aston Martin and Red Bull Racing has gone into. This time, don’t expect something as outlandish as...
by - February 24, 2017
The year 2018 marks the golden anniversary of Subaru of America. Of course, the company will celebrate 50 years of being at the helm of the brand’s crusade in North...
by - February 24, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries