Shattered by recall costs and lawsuits, Japanese airbag maker Takata Corp. filed Monday for bankruptcy protection in Tokyo and the US, saying it was the only option to keep supplying replacements for faulty airbag inflators linked to the deaths of at least 16 people. The company's bankruptcy filings cleared the way for a $1.6 billion takeover of most of Takata's assets by rival Key Safety Systems. "There was no other way," Takata President Shigehisa Takada said, adding he intends to leave Takata's management once it's handed over to Key, per the AP. Takata's inflators can explode with too much force when they fill up an airbag, spewing out shrapnel. Besides the fatalities, they're responsible for at least 180 injuries worldwide; 100 million inflators have been recalled, including 69 million in the US—the largest automotive-related recall in US history.
A Takata lawyer said it's too early to estimate the total eventual cost of the recalls and wouldn't confirm reports that they exceeded $9 billion. Under its agreement with Key, remnants of Takata's operations will continue to make inflators as replacement parts in the recalls, which are being handled by 19 affected automakers. Takata will use part of the sale proceeds to reimburse carmakers, but experts say the companies still must fund a significant portion of the recalls themselves. The process could take years. At least $1 billion from the sale to Key is expected to be used to satisfy Takata's settlement of criminal charges in the US for concealing problems with the inflators. Takata already has paid $125 million into a victims fund and a $25 million fine to the Justice Department. Key says it won't cut any Takata jobs or close facilities, though the Takata name may not live on after the bankruptcy. (Read more Takata stories.)