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Takata Corp., the Japanese auto supply company whose airbags were blamed for killing at least 14 people around the world, filed for bankruptcy protection Sunday, saying it's selling almost all of its operations to a Michigan-based company.
In a joint statement released Sunday evening in New York and Monday morning in Tokyo, Takata said most of its assets would be taken over by Key Safety Systems, a Japanese-owned rival based in Detroit, for about $1.6 billion.
The statement confirmed long-circulating rumors that Takata was planning to seek bankruptcy protection. The petition was filed Sunday in Delaware.
Even though KSS is one of Takata's biggest competitors, Takata "recommended KSS as the best sponsor candidate based on a variety of factors including strategic fit, valuation, and certainty of closing," said Hideaki Sudo, chairman of Takata's Steering Committee.
Proceeds from the bankruptcy reorganization and sale will go toward meeting costs related to the recalls, including a $1 billion settlement it reached with the U.S. Justice Department in January. Key said it wouldn't cut any Takata jobs or close any facilities.
Recalls of defective Takata airbags — the largest recall in automotive history — will continue under the supervision of the 19 automakers known to be affected, according to the statement.
Takata produced faulty airbag inflators that would explode under certain conditions, sending pieces of metal and plastic into the cabin of the vehicle. In addition to at least 14 deaths, the faulty airbags have been blamed for more than 180 injuries.
Despite widespread media coverage and numerous campaigns to alert owners of the problem, more than 65 percent of the vehicles that are part of the recall are believed not to have been repaired.