August 7, 2014
Takata Corp., the Japanese maker of vehicle safety parts used by auto manufacturers, is only now beginning to realize the immense cost it’s going to pay for selling faulty airbags to at least 10 different automakers dating to at least as far back as 2001. These safety bags can rupture when they’re deployed, not only doing nothing to help prevent injury from accidents but also spray bits of metal into drivers and front-seat passengers, making worse whatever injuries they were meant to avert.
Investigations are ongoing by the U.S. National Highway Traffic Safety Administration (NHTSA), but on Thursday Takata gave the public an idea of how much it’s expected to lose this year in costs linked to fixing the problem. In its first quarter ending June 30 report released Thursday, Takata said it would likely lose a staggering $235 million (24 billion yen) this year; it had previously forecast a gain of $156 million. The company has charged $470.7 million as a one-time charge in the quarter to cover recall issues.