Investors are jumping ship after reports that at least five people have died in vehicles equipped with faulty Takata air bags, resulting in millions of recalled vehicles for 10 automakers worldwide.
In the latest stock dump, Fidelity Management & Research Co. has sold 1.24 million Takata shares constituting 79 percent of its stake in the Japanese supplier as of the end of October, Bloomberg News reported.
"At least eight institutional investors have sold all of their holdings in Takata since June," said the report.
As former customers switch to other suppliers, Takata shares will likely continue to fall. The Tokyo-based company's stock has already dropped 56 percent this year.
Takata recently defied an order from the U.S. National Highway Traffic Safety Administration to expand its air bag recall nationwide. Even as automakers including Ford and Chrysler widen their recalls, Takata continues to resist.
The supplier's latest move to appease regulators is to hire three former U.S. Transportation Secretaries as crisis management advisers. The three selected to advise Takata are "Sam Skinner, who led the Transportation Department under President George H.W. Bush; Rodney Slater, who held the post under President Bill Clinton; and Norman Mineta, who served in the Clinton and George W. Bush administrations," according to the Detroit Free Press.
Skinner will head Takata's new panel formed to discuss the supplier's air bag inflator-making process. The faulty air bags that have led to recalls for 7.8 million vehicles can explode in the event of a crash, sending shrapnel flying at the car's occupants.
The company is still at odds with the NHTSA and doesn't seem to be backing down.
"We recognize that NHTSA has urged Takata and our customers to support expansions of the current regional campaigns in the United States," said Chairman and CEO Shigehisa Takada without adding that the supplier will comply.