370m euros bill for Takata’s faulty airbags

Takata, the Japanese cart safety parts maker, is facing some serious costs and profit plunges following a massive vehicle recall related to faulty airbags.

Chief Executive Shigehisa Takada officially apologized to shareholders, car-makers who were forced to recall millions of cars due to the inflating airbag problem.

The bill Takata will have to pay to cover the costs of the recalls could rise to as much as 370 million euros, consisting of part replacement prices and labor costs.

In addition to the huge hole the bill will leave in Takata’s pockets, the company also has to deal with a major plunge in profits. Takata’s shares have dropped by 30% from the beginning of this year, as compared to a 6.0 drop experienced by its main rival, Tokyo’s Nikkei.

So far, 10.5 million vehicles had their airbag inflators replaced over a span of five years.

The problem with the airbags is that they may spontaneously explode in the faces of drivers and passengers and might be even fatal as they may cause accidents. So far, two deaths have been linked to the faulty Takata airbags.

The Japanese company is the world’s second largest vehicle safety parts producer.