Takata Corp. (OTC Pink: TKTDY) is a Japanese automotive safety company, which manufacturers seat belts, buckles, full airbag coverage, and more. The company has been in the news over the past year, as the company’s defective airbags have caused numerous injuries and even deaths. However, shares of the embattled auto parts company are soaring 32% on Friday, December 30, 2016. Over the past three months, Takata Corp. has seen average daily volume of 973 shares. However, volume of 6,352 shares or dollar volume of $104,808, has already exchanged hands on Friday.
Shares of Takata Corp. are soaring on Friday, after the company recently announced that is nearing a settlement with U.S. regulators over the defective airbag scandal. According to numerous news outlets, Takata Corp. could see a penalty of up to $1 billion and could be paid out in January 2017. However, the Wall Street Journal says that the official penalty dollar amount is yet to be officially announced. Takata Corp. had to recall almost 70 million airbag inflators, after numerous deaths and injuries showed that the Takata airbags did not properly work. Here is an article from Jay Ramey of Autoweek.com, explaining the situation:
Takata Corp. News Article:
Auto supplier and airbag maker Takata is expected to reach a settlement with U.S. federal prosecutors in relation to allegations of criminal wrongdoing in the company’s handling of its massive airbag inflator recall, The Wall Street Journal reports. The settlement could include an admission of criminal misconduct in addition to a penalty of up to $1 billion, with the settlement expected to be formalized as soon as January 2017. The Wall Street Journal notes the sum of the monetary settlement has not been confirmed and could amount to hundreds of millions of dollars paid over the course of several years.
The scandal-plagued supplier has been the subject of the single largest recall in U.S. history, with the National Highway Traffic Safety Administration mandating a recall of nearly 70 million Takata-made airbag inflators in May of this year following months of intensive research into the issue. The recall followed a steady string of deaths and injuries in the U.S. and abroad connected to degraded airbag propellant tablets, which resulted from a number of factors including propellant age, humidity, and the lack of a drying agent.
The NHTSA enacted a wide-ranging recall that gave priority to the most at-risk vehicles to receive replacement inflators, some of which were determined to have rupture rates of 50 percent.
“The science clearly shows that these inflators become unsafe over time, faster when exposed to humidity and variations of temperature,” NHTSA administrator Mark Rosekind said earlier this year in announcing the historic recall. “This recall schedule ensures the inflators will be recalled and replaced before they become dangerous, giving vehicle owners sufficient time to have them replaced before they pose a danger to vehicle occupants. NHTSA will continue to evaluate all available research and will act quickly to protect safety.”
NHTSA has released a number of statements to the media and to vehicle owners urging owners to have the recall procedure performed, expressing grave concern about owners ignoring the recall notices.
Though inflator replacement is underway, Takata still faces possible charges of wire fraud in the U.S. in connection with statements made to consumers and the automaker Honda; wire fraud statutes are often used in federal cases in which companies have provided false, misleading or incorrect information to U.S regulators because such charges are often easy for federal prosecutors to prove in court. It is expected that a settlement will be reached before the president-elect is sworn in, which is usual with high-profile corporate cases prior to the start of a new administration.
Takata is expected to seek bankruptcy protection in the U.S. at some point in the future and has reportedly been in talks with rival suppliers looking to take over the crisis-hit company.