Takata Considers $28 Billion Charge For Additional Airbag Recalls

Oct 27, 2014 03:00 PM EDT | Matt Mercuro

Takata is considering booking a quarterly charge of 2-3 billion yen ($19-$28 million) to cover the cost of additional recalls of vehicles that might have defective airbags.

The charge, on top of 75 billion yen previously set aside for airbag recalls, would cover the cost of recent recalls announced by Toyota, Honda, and Nissan, people "with knowledge of Takata's financial projections" said to Reuters.

The charge would most likely be booked in Takata's results for the first half of the current fiscal year ending March 2015. It would also represent a partial reckoning for a global auto safety recall that started back in 2008 and has included more than 16 million vehicles.

Specifically, the charge would represent the projected cost to Takata in response to recalls of approximately 570,000 vehicles, which was announced recently to fix defective airbags.

Takata is scheduled to report quarterly results on Nov. 6.

Nissan announced last week that it was recalling 260,000 vehicles globally due to defective airbags, while Toyota also said earlier this month that it was going to recall 247,000 cars to fix Takata airbags.

Honda said on Aug. 26 that it was recalling about 63,200 vehicles.

Previously, Takata announced a charge of around 45 billion yen in the April-June quarter to deal with airbag recalls.

In July, the company said it was studying the impact of 45 billion yen special loss on its full-year forecast.

Safety regulators in the U.S. are trying to decide whether Takata airbag inflators made in 2000-07 were improperly sealed or subject to another defect.

Airbags inflating with too much force could spray metal shrapnel at vehicle occupants, according to Reuters. Defective Takata airbags have been linked to four deaths in the U.S. and dozens of injury claims.

The probe by the National Highway Traffic Safety Administration (NHTSA) has focused on inflators recovered from recalled vehicles collected for repairs in humid places like Florida.

Takata said it is cooperating with that investigation along with 10 automakers, according to Reuters.

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