Takata CEO to Resign After Management Team is Reorganized

Shigehisa Takada, CEO of Takata, will resign after the safety equipment supplier’s management team is reorganized, Automotive News reports. Takata airbag inflators are being recalled in millions of cars around the world.

Although issues with the company’s airbag inflators surfaced in 2008, the sheer scale of the issues has grown significantly over the past three years and could continue to expand. As of May this year, defective Takata airbag inflators have been connected to 13 deaths and more than 100 injuries.

Despite being the first member of the Takada family to take responsibility for the issue, the CEO came under fire for the way the issue has been handled. Although Takada apologized for the way the recall has been handled, he continues to defend the company’s products.

“I am not clinging to this. My role is to make sure the company does not take a bad turn until there is a passing of the baton,” Takada said in an annual shareholders meeting in response to criticism, according to Automotive News.

Although details haven’t been revealed, the management reorganization will be handled by a third-party company hired by Lazard, an investment bank, which Takata hired to find financial support. The parts supplier says it has around 30 unnamed potential investors in the company and expects to find a solution by November, according to the report.

Since the scandal took off, the company has posted three annual losses in the past four years and its shares are down 90 percent from just over two years ago. After Takada announced he plans to leave, Takata shares shot up 10 percent before falling to just 2 percent above where they were before the news.

Those financial issues are impeding the company’s ability to manufacture the approximately 100 million replacement airbag inflators needed to cover the recalls. Additionally, the company is also facing lawsuits and potential fines.

After becoming president of the company in 2007, Takada took over as CEO in 2011 after his father Juichiro Takada died.

Source: Automotive News (Subscription required)