Takata executives faced angry investors Tuesday after the company at the centre of the world’s biggest auto safety recall filed for bankruptcy and said it was being bought by a US company.
The filing all but destroys any value left in the shares of the Japanese airbag maker, which will be yanked from the Tokyo stock exchange next month.
Many who attended the shareholders’ meeting Tuesday — Takata’s last as a listed company — expressed outrage at how the auto parts giant handled the crisis over a defect in its airbags which has been blamed for at least 16 deaths and scores of injuries.
“Why couldn’t they have addressed these issues faster, when the recalls first emerged back in 2008 and 2009?” said one 48-year-old investor outside the meeting, which was closed to media.
On Monday Takata announced it had filed for bankruptcy protection and would be bought by US auto parts maker Key Safety Systems, which is owned by China’s Ningbo Joyson Electronic, for $1.58 billion.
The company’s board and several other executives were reappointed at Tuesday’s meeting ahead of the ownership transfer.
Takata’s chief executive Shigehisa Takada, whose grandfather started the company in 1933 as a textile maker, has said he will resign once the transition is completed.
“I want to ask (Takada) how he feels about his responsibility” for the crisis, said 66-year-old investor Minoru Matsuo before going into the meeting.
Millions of airbags produced for some of the world’s biggest automakers, including Toyota and General Motors, are being recalled because of the risk that they could improperly inflate and rupture, potentially firing deadly shrapnel at the occupants.
Nearly 100 million cars, including about 70 million in the United States, were subject to the recall.
– ‘My mistake’ –
Takata, which is facing lawsuits and huge recall costs, has been accused of hiding the problem with its airbags for years.
“It was my mistake to have invested in this kind of company,” said shareholder Hiroshige Kono.
“I worked for a food company and if a problem hits my firm, we would have immediately apologized, recalled our products and taken necessary measures” to prevent a repeat.
“They (Takata) were just trying to get away with it, which made the problem even more serious.”
The 75-year-old retiree said that Tuesday’s meeting was a vigil and Takata’s July 27 delisting “will be the funeral”. “I paid a lot of condolence money,” Kono added.
Honda, a major Takata customer, first sounded the alarm about a possible problem in 2008.
But the scandal reached a peak only in 2014 when earlier deaths started getting more media attention and the US National Highway Traffic Safety Administration became involved in the ballooning recalls.
Investigators believe the problem is linked to a chemical, ammonium nitrate, which is used as a propellant in Takata’s airbag inflator canisters. The component can degrade, especially in humid conditions, creating the risk that an airbag will improperly inflate and rupture.
Takata has already agreed to pay a billion-dollar fine to settle with US safety regulators over its airbags. But its liabilities are reportedly set to top 1.0 trillion yen ($9 billion) in what is the biggest bankruptcy filing for a Japanese manufacturer.
Takata’s volatile shares went untraded for most of Tuesday’s session as sell orders swamped buy orders. They ended the day down 31 percent at 110 yen.
The exchange on Wednesday will remove a daily loss limit on the shares, which will likely see them become effectively worthless.
“I put quite a lot of money into this company,” said 36-year-old Takata shareholder Kenichi Asahi. “Now the shares are nothing more than trash.”
end
Report by Kyoko Hasegawa in Tokyo — AFP
