Report: Takata recall costs could reach $24B

Report: Takata recall costs could reach $24B

Takata’s ongoing recalls could cost up to 2.7 trillion yen (~$24 billion USD) if the company is forced to replace every suspect airbag inflator, according to Bloomberg.

Specific details of the “worst-case-scenario” cost estimate remain unclear, though the Insurance Institute for Highway Safety has pressured the Japanese supplier to recall every inflator that uses ammonium nitrate if the controversial propellant cannot be proven safe.

Ammonium nitrate is said to be prone to degradation when exposed to moisture over time, eventually exploding with too much force. The problem is believed to be particularly troublesome in airbag inflators that lack a desiccant to control moisture.

The latest cost estimate, citing people familiar with the matter, is based on a widespread recall for nearly 300 million airbag inflators globally. The revelation has put Takata’s financial viability into doubt, though automakers will likely share some of the costs.

The company has ben given an 2019 deadline to resolve the root cause or broaden its recall campaigns.

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