Tokyo — Japanese airbag maker Takata Corp. has filed for bankruptcy protection in Japan and the U.S., succumbing to the weight of the world's biggest automotive recall. Takata said it would sell key assets to U.S. supplier Key Safety Systems.
Key Safety, based in based in Sterling Heights, Mich., and owned by China's Ningbo Joyson Electronic Corp., said separately it would buy "substantially all" of Takata's global assets and operations for $1.59 billion.
The sale will not include some operations related to Takata's scandal-plagued business in ammonium nitrate airbag inflators subject to the global recall that torpedoed the company.
Both Takata and Key have extensive operations involving plastics, including housings and functional components.
The inflators were prone to exploding with too much force and spraying vehicle cabin's with metal shards. At least 16 deaths and 180 injuries worldwide were linked to the airbags.
In February, Takata pleaded guilty to wire fraud charges in the U.S. for systematically withholding information about the defects and manipulating inflator test data. In January, a federal grand jury indicted three former Takata executives for criminal wrongdoing in connection with the safety defect. A month later, Takata agreed to a $1 billion criminal penalty.
Key Safety said the ammonium nitrate airbag inflator operations would be run by a reorganized Takata following the closing of the transaction — and they would eventually wind down. Takata said it would keep producing the components through March 2020 to ensure a steady supply of replacement inflators for the millions being recalled.