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When all is said and done with regard to the recall of air bags manufactured by Takata Corp., the cost associated with the recall will total some $24 billion.
According to those close to the matter but who has asked to remain anonymous, the worst-case scenario may involve as many as 287.5 million airbag inflators. Still to be determined is how Takata and automakers will share the cost in the end.
This revelation would cost the company some $7 billion more than what it had initially estimated in February of this year according to a Jefferies Group LLC analyst. This sharply calls into question the viability of Takata over the largest recall in history. By some estimates, the cost could exceed between four and six times more than the total projected fiscal earnings for this year and the total assets that the company had listed on its balance sheets in 2015.
“At this juncture, the possibility of negative net worth cannot be completely denied,” Masahiro Akita and Koji Takahashi, analysts at Credit Suisse Group AG, wrote in a report Wednesday. The analysts cut their price target to 500 yen, from 1,450 yen.
Takata said in a statement to the Tokyo stock exchange, that the company is still investigating the root cause of malfunctions of its air bag inflators and has found it difficult to estimate the related costs surrounding the matter.
In spite of having lost 46 percent of the company’s value this year, Takata shares have gotten a slight uptick of rose 5.8 percent recently. Currently, Takata is valued at $324 million.
The company has until the end of 2019 in order to determine the root cause of the issue surrounding the defective inflators that have caused 11 fatalities and 100’s of injuries in the U.S. by sending plastic and metal shrapnel into vehicles that have the devices installed. The National Highway Traffic Safety Administration (NHTSA) continues to investigate the matter surrounding air bags manufactured by Takata and their use of ammonium nitrate in its inflators.
If you or a loved one has been injured or tragically lost because of a defective airbag, we are sorry for what has happened to you and we want to help. Whether you decide to join a class action lawsuit or file a personal injury or wrongful death claim against Takata and any other responsible party, getting compensation for our clients for injuries or even wrongful death is what we do best. We are determined to see that justice is done for our clients.
Contact the Takata Airbag Recall Attorney, John Foy & Associates at (404)400-4000 and set up a free consultation today.
