Takata Corp. may consolidate its air bag production in Europe and cut jobs overseas under restructuring to recover from a global recall crisis involving its faulty inflators, sources said Wednesday.
Under the turnaround plan, Takata may also sell some noncore businesses to raise money for massive recall-linked expenses, as well as seek assistance from client automakers, the sources said.
In Europe, Takata has air bag production facilities in such countries as Germany and the Czech Republic. The Tokyo-based company may integrate plants and slash jobs in Europe starting in April 2017 or later, according to the sources.
Job cuts could also be made at Takata’s air bag units in North America, South America and Asia. In Japan, Takata will proceed with further cost-cutting efforts.
An outside panel of experts commissioned by Takata is expected to finish compiling the turnaround plan by April, the sources said, as the parts maker’s financial standing is expected to deteriorate due to the recall crisis.
Takata’s defective air bag inflators have forced automakers to recall more than 50 million vehicles globally since 2008. Once the cause of the defect is identified, Takata and automakers will decide how to share recall costs that could reach hundreds of billions of yen.
Separately, Takata will also craft a business plan for fiscal 2016 through fiscal 2025.
Based on the assumption it does not face funding difficulties thanks to assistance from automakers, Takata estimates it could allocate around ¥25 billion a year for recall-related expenses, the sources said.
And by fiscal 2025, Takata will seek to achieve the same level of profitability as in fiscal 2014, the sources added.
However, the outlook is uncertain for automakers’ support for Takata, which has been criticized for its handling of the crisis. So far, 10 deaths have been linked to the defect.
Takata Chairman and President Shigehisa Takada has decided to quit his post to take responsibility for the crisis, other sources said earlier.
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.