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Airbag Recall Could Cost Takata $24 Billion

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Shalini Shah1 year ago

More than 50 million Takata airbags have been recalled around the world to replace defective inflators.

Cost of the Takata Airbag Recall

In the worst case scenario, Japan’s Takata Corp. could lose $24 billion in their airbag recall. This news has resulted in the companies shares tumbling by one-fifth to an all-time low.

The airbag recall involves inflators containing ammonium nitrate. According to reports, the inflators can explode upon deployment, sending metal shrapnel into vehicle cabins.

If all airbag Takata inflators containing ammonium nitrate were recalled from the market, it would affect 287.5 million units.

The new $24 billion figured exceeds by far previous industry estimates that Takata could face a recall bill of more than $3.5 billion.

Currently, the company’s assets are about $1.3 billion. The company’s current market value is only $302 million.

10 Deaths Linked to Airbag Recall

The defective airbags have been linked to 10 deaths globally, nine of which occurred in the United States.

NBC News reports that U.S transport authorities have fined the company $70 million. Takata is also facing class action suits in the United States, where most of the airbag-related injuries have happened.

Automakers like Honda Motor Co Ltd and Toyota Motor Corp have said they will stop using Takata airbag inflators in their new vehicles.


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