By on November 6, 2015

Takata Logo on Belt

Toyota said Thursday that the world’s largest automaker would no longer use the beleaguered company’s airbags, joining Honda, Mazda and others, putting in doubt that supplier’s viability, Bloomberg reported (via Fortune).

Reuters (via Automotive News) reported that the automotive supplier, who was hit with a $70 million fine from the National Highway Traffic Safety Administration earlier this week, is preparing for the worst.

“We are considering some plans to survive, but it is not at the stage I can talk about yet,” CEO Shigehisa Takada said Wednesday, according to Reuters.

The company’s use of a propellant for its airbags that would explode with too much force, spraying metal into the passenger cabin, has been blamed for eight deaths and nearly 100 injuries. The company signed an agreement with NHTSA this week that acknowledged that the company was slow to react and covered up its faulty airbags.

Honda said it would not use the company’s airbags in its cars for “the foreseeable future.

“We have become aware of evidence that suggests that Takata misrepresented and manipulated test data for certain airbag inflators,” Honda said, according to Reuters. “Honda expects its suppliers to act with integrity at all times and we are deeply troubled by this apparent behavior by one of our suppliers.”

Shares for Takata were down 40 percent after the company signed the consent order with NHTSA.

Airbag sales were roughly 38 percent of the company’s yearly revenue, according to Bloomberg.

When regulators announced Takata’s fine, NHTSA officials said the fine could grow to $200 million if the supplier doesn’t comply with all aspects of the order, including appointing an independent monitor that would oversee the company’s compliance for five years.

NHTSA said it would speed up the recalls for cars equipped with potentially dangerous Takata airbags. Up to 19 million cars from 12 different automakers — 23 million inflators in total — could be affected.

The most dangerous airbags would be replaced by June 2016 and all airbags could be recalled by 2019.

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24 Comments on “Takata May Go Under As More Automakers Back Away From Supplier...”


  • avatar
    PeriSoft

    These guys are poster children for why laissez faire capitalism doesn’t work – for consumers *or* corporations! If any company deserves to go under for its actions, it’s this one; they make VW look like saints.

    • 0 avatar
      thornmark

      >>These guys are poster children for why laissez faire capitalism doesn’t work – for consumers *or* corporations! If any company deserves to go under for its actions, it’s this one; they make VW look like saints.<<

      ??? Under capitalism they should go under. But under socialism and crony capitalism bad actors get bailed out and no one learns the proper lesson – that's called moral hazard and it’s one reason socialism doesn't work.

      Real capitalism may have faults but it’s the best system for the most people.

      • 0 avatar
        PeriSoft

        “Under capitalism they should go under.”

        And under reasonably well-regulated capitalism, they will (it looks like). But without that regulation, the damage would have been much deeper and gone on for much longer. What are car buyers supposed to be doing, verifying personally that the suppliers of their cars’ airbags aren’t using dubious practices before they purchase? The market is *horrible* at solving this kind of problem, and all the airbag companies whose mottos *weren’t* “who cares, ship it anyway!” were hurt by Takata’s negligence. That’s called a *market distortion*, and whatever Rand Paul and his ilk would have you believe, those aren’t solely caused by the government.

      • 0 avatar
        ClutchCarGo

        Socialism has nothing to do with the moral hazard of bailouts. Bailouts are either the result of crony capitalism (i.e. fascism) or laissez-faire that allows the Too Big to Fail syndrome to develop where allowing the business failure creates so many negative ripple effects that a bailout is less painful.

      • 0 avatar
        DenverMike

        No kind of bailout can save Takata. They’re like a drunk employee that sh!t the break room. OEMs have moved on, not looking back. They won’t buy floor mats from Takata.

        But then GM will continue getting buyers just thinking of themselves, even if aware of GM’s past and current Kunt like business practices and outright manslaughter.

    • 0 avatar
      Lou_BC

      The comparison to VW is incorrect. VW deliberately cheated testing whereas they did not deliberately lie about “killer” airbags.

      • 0 avatar
        PeriSoft

        “they did not deliberately lie about “killer” airbags.”

        No, they did. They knew the bags were faulty, they knew how dangerous they’d be if they failed, and when their own engineers raised the alarm the engineers were ordered to destroy the evidence they’d gathered. Then they kept shipping them, and THEN they stonewalled when people started actually getting killed. VW’s behavior doesn’t hold a candle to Takata.

    • 0 avatar
      wsn

      “These guys are poster children for why laissez faire capitalism doesn’t work – for consumers *or* corporations! If any company deserves to go under for its actions, it’s this one; they make VW look like saints.”

      Exactly, under communism there won’t be personal cars and thus no one would be hurt by faulty air bags.

      • 0 avatar
        JohnTaurus_3.0_AX4N

        Dont worry, you may get lucky enough to drive a brand-new 30 year old Fiat derivitive with 59 hp getting you 16 mpg that has to be repaired/rebuilt only on days that end in “y”. No need to worry about air bags, they wouldnt help.

      • 0 avatar
        PeriSoft

        I’m pretty sure that there are options other than “communism” and “no regulation”.

  • avatar
    APaGttH

    They could always sell their designs to foreign militaries or shadowy underworld organizations. With slight modification they apparently make outstanding anti-personnel mines.

  • avatar
    honda_lawn_art

    Takata’s being portrayed as an evil entity, but in automotive supply; if you don’t get the contracts, you’re out of business, so we’re manufacturing devices designed to save lives to a price point. There was a company in Aurora, CO called OEA that made airbags and they went out of business because of some non-lucrative contracts. Some of that business assuredly went to Takata. Now Takata is losing business and it’s going to whoever else, but the real problem isn’t fixed; automakers aren’t paying anyone enough to make the right airbag, and only after every supplier in the world has a tarnished record will this be news.

    • 0 avatar
      tresmonos

      Autoliv now owns that OEA business. Some other suppliers will buy up Takata’s pieces at a fire sale price. Some plants may survive, some will not. Design teams will merge or move. Asset reallocation will begin. Wages will be frozen for years, layoffs will occur and uncertainty will reign.

      This is the life of a Tier 1 supplier. It f*cking sucks. All bow before the mighty purchasing source contract.

      The B&B peanut gallery will carry on with little regard to the human cost of the almighty dollar. Welcome to the dark side of Japanese business practices.

    • 0 avatar
      anomaly149

      People aren’t paying enough for automakers to make the right car in general.

      You want a vehicle:
      1. designed from start to production in 3.5 years
      2. sold for <30,000$ or <500$/mo.
      3. close to or over 40 MPG highway
      4. despite having well over 250 horsepower
      5. fully optioned with every bit of tech you can imagine
      6. and leather seats
      7. with a 5 star plus crash test rating
      8. that meets all of the myriad federal regulations
      9. without the styling looking like a turd

      Tall order.

      • 0 avatar
        JohnTaurus_3.0_AX4N

        Agreed anomaly149.

        Add in that the car must be near perfect mechanicly for at least 100k, and perform in January in Alaska exactly how it performs in Phoenix in July: perfectly.

        I for one think we get some damn decent cars from just about all auto makers. None are perfect, that doesnt exist. Any where you look, youre getting something that is respectable and fairly decent for what you must pay for it.

    • 0 avatar
      bikegoesbaa

      I’m genuinely confused as to why anybody works in the automotive supply business. Seems like it’s incredibly frustrating and stressful with not much in the way of rewards to balance that out.

      I went to a car school for engineering, saw what all the guys working at auto suppliers were doing, and then very explicitly decided that I wanted nothing to do with that and decamped for another industry. With 15 years of hindsight I am positive that was the correct choice.

      Cars are a great hobby but unless you’re doing really interesting/awesome stuff there are much better ways to make a living.

      I especially don’t get the tech guys who complain about the horrors of the auto industry. Just leave! There are lots of opportunities elsewhere, with employers who treat their people well and have interesting projects to work on.

  • avatar
    gasser

    Meanwhile, how do I get a new airbag for my car? Also who, if anyone, is on the hook to replace it?

    • 0 avatar
      brn

      We must bailout Takata. They’re too dangerous to fail. ;)

    • 0 avatar
      JohnTaurus_3.0_AX4N

      That’s what Im wondering! Who makes the replacements? What do I do, take the car to Honda asap?

      Ive been looking at used Accords for $3000 and under for my widowed cousin. Im going to have to check up on them when we get ready to buy. We live in a very high humidity area (50 some odd miles from the Gulf Coast).

      We are selling her 2wd 2003 Expedition Eddie Bauer first (we put it at $3500 obo). Most likely will be a 1998-2002 Accord, I-4, prefer EX, likely a 4-door but she rarely has her two grand kids so she might consider a coupe.

      She had a 98 EX sedan before, had well over 300k when she finally sold it. She really liked it, she named it Precious lol.

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