Troubled air bag maker Takata Corp of Japan is selling its automotive interior trim and seating material operation, raising cash as its inflator recall costs continue to mount.
The Japanese company is selling Pontiac, Michigan-based Irvin Automotive Products to Piston Group, an auto parts supplier run by former Detroit Pistons guard Vinnie Johnson. The sale price was not disclosed, but Piston Group, based in suburban Detroit, said in a statement on Wednesday that Irvin has annual sales of US$500 million.
Takata faces billions in costs for what is now the largest auto recall in US history. Its inflators can explode with too much force, spewing shrapnel. They have been linked to as many as 16 deaths and more than 100 injuries worldwide. The company is recalling 69 million inflators in the US and about 100 million across the globe.
“For Takata, this transaction gives us additional financial flexibility and enables us to focus on our safety operations, with a particular focus on managing the complex, global air bag recalls alongside our automotive customers and regulators,” Takata chief executive officer Shigehisa Takada said in a statement.
Last month, Takata reported a second-quarter profit of ¥2 billion (US$19.7 million), down 33 percent from the same period the previous year.
Tokyo-based Takata, which had two straight years of losses over the recalls, has said it expects to return to the black this fiscal year, although some analysts said that recall costs now being paid by automakers would eventually be billed to Takata.
Takata also faces class-action lawsuits and possible government fines over its defective air bag inflators.
Takata has hired the advisory firm Lazard to engineer a restructuring of its finances, likely with the help of some of its biggest customers.
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