Takata Corp. suppliers and employees expressed concerns on Monday following the embattled company’s decision to file for bankruptcy protection amid a global recall of its defective air bag inflators.
“We just received delivery orders two days ago, but I’m worried if we will ever get paid,” said an employee at a car component company in Takashima, Shiga Prefecture. “Even if the amount is small, it will hurt smaller firms like us.”
According to credit research agency Tokyo Shoko Research Ltd., around 40 percent of Takata’s more than 130 tier 1 suppliers are based in the Kinki region, mainly in Shiga.
A worker at a factory that makes parts for Takata unit Takata Kyushu Corp. in Saga Prefecture, was also concerned.
“I’m afraid that this plant may go bust in the future,” the employee said.
A man in his 40s working at Takata’s seat-belt manufacturing plant in Shiga was upset, saying the company had not given any explanation regarding the bankruptcy filing.
“Workers are talking about what will happen now that the company will be owned by a Chinese firm,” he said.
Takata has decided to sell its business to U.S. auto parts maker Key Safety Systems Inc., owned by Chinese company Ningbo Joyson Electronic Corp.
An official in the Shiga Prefectural Government said it will keep a close watch for any impact on local firms.
Hiroshige Seko, minister of economy, trade and industry, told reporters Monday he has instructed officials to set up a “safety net” for small and medium-size companies that could be affected by Takata’s decision.
The central government is hoping to avoid a chain reaction of bankruptcies following Takata’s decision by providing financial support to small and medium-sized companies struggling due to changes in economic conditions or disasters. Such a program was put in place when semiconductor maker Elpida Memory Inc. went bankrupt in 2012.
Seko sees the situation as “unavoidable” given the vastness of Takata’s troubles. The METI chief also expressed hope that Key Safety Systems will fix Takata’s finances and that he “expects a quick turnaround.”
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