Takata to post $119M loss as recall costs explode

Takata to post $119M loss as recall costs explode

Takata expects to take a 13 billion yen ($119 million USD) net loss for its fiscal year concluding March 31.

The hit reflects the ever-increasing costs of the company’s airbag recalls. The campaign is now the largest automotive recall in US history, affecting nearly 70 million airbag inflators in the US market.

Nearly eight years have passed since the first signs of trouble prompted a Honda recall for 2001-model-year vehicles. Takata nonetheless continued to build inflators with ammonium nitrate. When exposed to moisture over time, the controversial propellant can explode with too much force and send shrapnel flying through the cabin.

The National Highway Traffic Safety Administration last week outlined a much wider recall program for Takata’s full range of ammonium-nitrate inflators that do not employ a desiccant to prevent moisture from affecting the propellant. The announcement more than doubles the number of defective components, stretching the repair schedule into 2019 or beyond.

Automakers share repair costs, however some analysts warn that the crisis could threaten Takata’s financial viability if the company fails to secure outside funding or convince automakers to cover a larger portion of the final bill.

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