Takata Corp., the air bag supplier behind the biggest-ever U.S. consumer safety recall, plans to detail its business outlook to major customers at a meeting this week so as to gauge how receptive they will be to extending financial aid, according to a person familiar with the matter.
Takata wants to hold the meeting to dispel rumors and gauge the reaction of automakers to the possibility that it will ask for financial support, according to the person, who asked not to be identified because the information is not public.
Honda Motor Co. and Nissan Motor Co. both said they received invitations to a meeting with Takata on Friday, without giving more details. Takata spokesman Toyohiro Hishikawa declined to comment.
“It’s really a rare case for a Japanese supplier to call up automakers and hold such a joint meeting,” said Takeshi Miyao, an analyst at researcher Carnorama in Tokyo. “Takata might have been asking for help from individual car makers before but I would guess this time they decided to hold a meeting in a larger scale.”
The meeting will take place in the wake of a 10th reported death involving the company’s components.
Takata’s shares plunged to their lowest since March 2009 on Monday, down 9.8 percent, after its U.S. regulator said the latest fatality will add another 5 million air bag inflators to the about 23 million already recalled. Takata faces the prospects of compensating carmakers for recall costs that will depend on the extent of its responsibility for the defect.
The National Highway Traffic Safety Administration could not immediately say how many additional vehicles will be recalled because some have multiple inflators and may have been previously recalled. Further recalls will add to the ¥600 billion to ¥700 billion that automakers have footed so far in recall costs, part of which Takata will have to repay once the responsibility is determined, according to the person.
The latest recalls involve cars made by Ford Motor Co., Honda, Volkswagen AG, Daimler AG, Audi AG, Mazda Motor Corp., Saab AB and BMW AG. Japan’s transport ministry is looking at the latest recalls of Takata’s air bags, Masato Sahashi, an official at the ministry, said Monday.
The driver of the 2006 Ford Ranger pickup died in December after the truck swerved off a road in South Carolina and hit an obstruction, NHTSA said Friday. Agency investigators said the Takata air bag exploded, and the coroner had previously determined the rupture contributed to the death, NHTSA spokesman Gordon Trowbridge said.
In addition to the 10 fatalities, nine of them in the U.S., about 100 people have been injured by Takata air bags in the country.
Takata is in talks with rival air bag maker Daicel Corp. on ways to ensure a stable supply of inflators, said Masahiko Hirokawa, a Daicel spokesman. No decision has been made about whether they will invest in a production joint venture, Hirokawa said. The proposed tie-up was earlier reported by the Nikkei newspaper.
The Nikkei also reported that Takata will separately seek aid from carmakers as recall expenses mount, including getting them to cover some costs and easing pressure for discounts on parts.
“Takata has to share costs from the recalls to some extent,” said Tadashi Ono, a Tokyo-based analyst at Japan Credit Rating Agency Ltd., which cut Takata to below investment grade in December. Even if the portion of recall costs Takata ends up being responsible for is small, it will result in a “huge” loss for the company because of the number of vehicles recalled, he said.
Representatives for Toyota Motor Corp., Fuji Heavy Industries Ltd. and Mazda said they were unaware of the Friday meeting, while Mitsubishi Motors Corp. was unavailable to comment.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.