Canadian Manufacturing

Recalls taking financial toll on faulty airbag maker Takata

Takata, which controls 22 per cent of the global airbag market, will record a $218 million loss for this fiscal year

TOKYO—Takata Corp., the Japanese airbag maker embroiled in a massive recall totalling some 12 million vehicles globally, is taking more special losses for new recalls and will sink deeper into the red.

Takata, which controls about 22 per cent of the global airbag market, said it will record a 25 billion yen ($218 million) loss for the fiscal year through March 2015. It previously forecast a 24 million yen ($210 million) loss.

Takata airbags are suspected in fatalities and injuries involving several defects, including a faulty inflator suspected of exploding and hurling shrapnel toward drivers and passengers. Safety advocates say defective air bags caused four deaths in the U.S.

The U.S. National Highway Traffic Safety Administration is investigating, especially the question of whether Takata and automakers that use its airbags acted quickly enough once the defects were suspected.

Earlier this week, NHTSA demanded more documents from Japanese automaker Honda Motor Co., which has reported the biggest number of Takata air bag related recalls. It said Honda may have failed to report incidents related to the problem airbags.

Eight million of the recalls are in the U.S., including vehicles made by Honda, Toyota Motor Corp., General Motors Co. and other automakers. Globally, the recalls involve 10 automakers, and various nations, including Japan, China and Europe.

Takata, which again apologized for the problems, had already booked a special loss of 45 billion yen ($393 million) for the April-June period for the ballooning recalls.

It will take an additional special loss of 2.3 billion yen ($20 million) for additional recalls announced recently by Toyota, Honda and Nissan Motor Co.

The latest problem to surface stems from a production error that crept into some vehicles starting in 2009 and lasting through June this year, according to Takata.

The Tokyo-based manufacturer reported a July-September loss of 35 billion yen ($306 million), a reversal from 769 million yen in profit for the same period a year earlier.

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