Sat, Nov 07, 2015 - Page 15 News List

Japanese air bag producer Takata posts US$46m loss

SAFETY SCANDAL:The results came after three major customers said they would stop using air bags found to be hazardous, which it had concealed


Takata Corp chief financial officer Yoichiro Nomura, center, bows with head of investor relations Hitoshi Sano, right, and an unidentified employee at a news conference in Tokyo, Japan, yesterday.

Photo: Reuters

Embattled air bag maker Takata Corp yesterday reported a net loss of ¥5.58 billion (US$45.8 million) for the six months that ended in September as costs from a massive recall of defective air bags bit into strong growth in sales.

The Tokyo-based company cut its profit forecast for the full fiscal year that will end in March by 75 percent, to ¥5 billion (US$41 million) from ¥20 billion.

Takata said its sales totaled ¥359.4 billion in April-September. It kept its full-year forecast for ¥720 billion of sales. Apart from air bags, it also makes other car parts, including seatbelts and steering wheels.

The financial results capped a week of bad news for Takata after at least three major customers, including Honda Motor Co, said they would stop purchasing the types of air bags at the center of the product safety scandal.

On Tuesday, US auto safety regulators fined Takata US$70 million for concealing evidence for years that its air bags are prone to explode, with grisly consequences. The defect is linked to eight deaths and more than 100 injuries worldwide.

Takata has agreed to phase out manufacture of air bag inflators that use ammonium nitrate, the propellant blamed for the explosions.

It also agreed with the National Highway Traffic Safety Administration to a schedule for replacing many of the devices already in use over the next two years.

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