The Japanese company behind one of the worst automobile safety scandals has filed for bankruptcy.
Airbags have been instrumental in minimizing the injuries of automobile drivers and passengers, but once the danger presented by Takata airbags became known, the National Highway Traffic Safety Administration (NHTSA), the federal agency responsible for automotive safety in the United States, mandated the recall of these airbags and encouraged Takata to hurry up its production of safer and approved replacements.
Takata finally collapsed under the huge cost associated with its exploding airbag crisis. The defective airbag inflators were linked to at least 11 deaths in the United States and motivated the recall of millions of vehicles. Reports flooded in of metal shards flying into the faces and bodies of both drivers and passengers, causing moderate to severe injuries. These defects were not limited to a single manufacturing company but they apply to all companies and brands across the globe.
Saddled with over $9 billion in debt, Takata announced at the end of June that it was seeking bankruptcy protection in the U.S. and Japan. It is also selling the majority of its business to a rival, China-owned Key Safety Systems, in the U.S. According to company spokespeople this was the only way that it could continue to provide replacements for faulty and dangerous airbag inflators.
The airbag scandal precipitated Takata’s slow and steady demise; The company started as a manufacturer of textiles over 80 years ago and over time became known as a specialist in automobile safety equipment such as seat belts.
Takata admitted to concealing essential information about the dangerous inflators for a long time, even after they began blowing up in cars and injuring the occupants. The beleaguered company also pleaded guilty to wire fraud in the U.S. and was ordered to pay a fine of $1 billion, $125 million of which was allotted to a fund to compensate injury victims and their families. The proceeds from the sale to Key Safety Systems will go towards these and similar costs related to the mass recall.
The leading automobile manufacturers who installed Takata airbags in their cars, such as GM, Toyota, and Honda, could also lose money, as they will likely have to cover the costs of the greater percentage of the approximately $5 billion needed to cover the costs of replacing the millions of Takata airbags that remain in consumer vehicles across the globe.
By current estimates, only 35% of cars affected by the crisis have had their inflators replaced, meaning that all American automobiles might not be completely safe until 2023. If you or someone you love is injured by a defective Takata inflator, then contact a New York personal injury attorney immediately, so that steps may be taken to obtain both the justice and compensation you deserve. Call 718-329-9500 or 800-660-5299 to reach the law office of Jayson Lutzky, P.C. Mr. Lutzky is a Bronx, New York attorney who handles defective product and personal injury cases. If you were injured in an accident, then you may be entitled to compensation for lost wages, medical bills and pain and suffering–past, present and future. Visit www.MyNewYorkCityLawyer.com/Accidents to learn more about our law office.