Dressed in black since they are headed for their own funerals?
In the automotive equivalent of football’s “Hail Mary” pass, Takata Corporation today said that it has retained investment bankers Lazard to find new capital as part of a desperate attempt to address its dire financial and operational issues. It also wants to resolve its deadly airbag inflator issues “on a consensual basis in partnership with its automotive customers.”
It has no choice given the gravity of the problem that has seen Honda Motor fire it as a supplier – virtually unheard of in the tightly linked Japanese auto industry. Quietly, other automakers have likely shifted suppliers or will.
No more gas / cash left in the airbags.
Takata inflators are linked to ten deaths and more than 100 injuries in the United States. Under a Consent Order issued to Takata earlier in May, the company is required to make a series of safety defect decisions that will support vehicle manufacturer recall campaigns of an additional estimated 35-40 million inflators in the U.S., adding to the 28.8 million inflators previously recalled by NHTSA.
Bet on the snowball traversing the nether regions of Hades intact, instead of wagering that the ailing Japanese supplier will emerge in anything but a much diminished form after the airbag fiasco – if it exists at all. This is fourth down and very long yardage (meters?).
A Steering Committee formed in February by the Board of Directors of Takata Corporation is now apparently trying to use the media to put pressure on automakers to cut a deal. Unless the airbag business can’t be moved without disrupting ongoing production, there is no reason for an automaker to do so.
“These are highly challenging and complex issues, but the Committee strongly believes that it is in the best interests of all Takata stakeholders for Takata and its automotive customers to reach a consensual resolution that addresses the costs of the inflator issues while enabling Takata to remain a viable and valued global supplier to the automotive industry,” said Hideaki Sudo, Chairman of the Committee and Partner at Tokyo Fuji Law office.
When you stop laughing you can read this from Takata, published verbatim:
The Committee’s work is guided by several core principles, including:
- Ensuring the adequate, uninterrupted supply of safe, high quality parts and components,
- Coming to a final root cause determination on the inflator issues and implementing appropriate countermeasures to address the root cause(s),
- Expeditiously seeking new investment for Takata,
- Reforming Takata’s governance structure, and
- Ensuring the equitable treatment of claims for all automotive customers and providing full transparency throughout the process.
About the Steering Committee
The Board of Directors of Takata Corporation formed the Steering Committee in February 2016 to develop a restructuring plan to address the financial and operational issues related to airbag inflators. In addition to Mr. Sudo, the Committee consists of four other outside business, legal and financial experts.
