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Will The Auto Industry Keep Funding The Takata Recall?

June 20, 2016
Colson Hicks Eidson

One of the largest auto parts manufacturers in Japan is reeling as the US National Highway Traffic Safety Administration prepares to expand the largest consumer safety recall ever. Over 23 million vehicles have already been recalled, and with more vehicles being added to the list every day, Takata Corp. could soon find itself drowning in a pit of replacement part costs.

Will The Auto Industry Keep Funding The Takata Recall?

In December, a man in South Carolina was driving along when he encountered a cow in the road. He swerved to miss the beast but ran into an object on the side of the road instead. The collision set off his airbag, which sprayed him with shrapnel from a defective Takata airbag inflator. The man did not survive.

After news of the death reached NHTSA, it expanded the scope of the Takata recall by another 5 million vehicles. The company immediately felt the sting as its stock tumbled 9.8 percent, and the sheer volume of replacement parts needed was starting to overtax Takata’s manufacturing capabilities. The company needed help, and fast.

What Was Takata’s Response To The Expansion?

That’s when Takata Corp. turned to its competitor, Daicel, to help make up the difference in manufacturing numbers, but even help from a competitor wasn’t solving the company’s problems. In January, Takata called a secret meeting and invited auto manufacturers to attend. According to insiders, the meeting was to discuss the future of the Japanese parts manufacturer, and the possibility of carmakers providing financial aid to help support the recall.

There’s no word on whether any of Takata’s advances were successful, but since the meeting even more airbag manufacturers have joined Daicel in producing Takata replacement parts. The company has also hired the services of restructuring lawyers, raising rumors of an impending bankruptcy.

Do you think the company will fold, or will one of the industry’s leading airbag parts manufacturers pull it together in the nick of time? Keep following our defective car parts blog to find out.