Takata Corp. will move its head office from a posh building in an upscale Tokyo district to a redeveloped area to cut costs, as the troubled air-bag maker fights to survive the biggest recall in the auto industry’s history.
The company will move next week to an office tower built on reclaimed land near Tokyo Bay as part of efforts to “rationalize its operations,” said Toyohiro Hishikawa, a Takata spokesman. In leaving a building in Roppongi with tenants including Coca-Cola Co., Yahoo Japan Corp. and a sushi restaurant with three Michelin stars, Takata will halve its rent and save about ¥50 million ($440,000) a year, Hishikawa said.
Takata has sold shareholdings in Japanese automakers including Honda Motor Co. and Toyota Motor Corp. to help fund recalls of millions of flawed air bags, which Jefferies Group LLC analyst Takaki Nakanishi has estimated may end up costing more than ¥1 trillion. The company also divested its Irvin Automotive Inc. interiors unit to closely held supplier Piston Group for ¥10 billion in September.
The air-bag maker has honed in on bids from Autoliv Inc. and Key Safety Systems Inc. as it progresses toward a final round of negotiating a sale, according to people familiar with the matter.
The area Takata has selected for its new headquarters — Tennozu inShinagawa Ward — used to be home primarily to warehouses. It was redeveloped into a business district beginning in the 1980s and added a monorail station. Takata will occupy the 19th floor of the 22-story Tokyo Front Terrace tower, near the station.
Takata has lost nearly three-quarters of its market capitalization during the past year, dropping its value to about $285 million.
The company’s air bags are inside about 1 in every 5 cars assembled globally — including by the top three automakers each in the U.S., Japan and Germany.
The U.S. and Japan have ordered recalls of all Takata air bags that lack an absorbent. Researchers hired by automakers have found that moisture seeping into Takata’s inflators can lead them to rupture and spray shards of metal and plastic at motorists and passengers. About 90 million air bags have to be replaced in the two countries alone.
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