Takata Prepares For CEO Exit As Air Bag Scandal Worsens

Japan’s Takata Corp. is reportedly preparing the groundwork for removing its CEO Shigehisa Takada, the grandson of the group's founder, along with other top executives, as the company struggles with the auto industry's largest recall.

The air bag maker, under severe pressure over defective air bags, which can explode with excessive force and shoot out metal shrapnel into the cabin of a car, approached automakers for financial support to supply replacement parts for the millions of vehicles recalled worldwide.

However, sources close to the matter told multiple news media that a consensus had emerged among carmakers that it will be difficult for Takata to regain their trust without the current management first accepting responsibility for the issue. The company is set to present a set of reforms as part of its business plan at a meeting with major automakers Friday.

With an 11th death potentially linked to a Takata air bag rupture in a Honda Civic, and U.S. regulators widening the recall to include 5 million new cars, frustrations have grown among major stakeholders of the company, including Honda Motor Co., over the damaging safety scandal.

While ousting the CEO was not yet a condition to provide aid, automakers will be more receptive to supporting Takata if management takes responsibility for the recalls and resigns, sources told Bloomberg.

The family members of the 49-year-old who first became the CEO in 2013 own about 58 percent of the company’s shares.

As the number of recalled cars approached the 50 million mark, Takata teamed up with local competitor Daicel Corp. to provide air bags for the recalled cars. The company’s stock has lost more than 80 percent of its value since the beginning of the scandal two years back.

Meanwhile, Ford Motor Co. announced a recall Tuesday after a coroner determined that a rupture of the air bag contributed to the death of the driver of a 2006 Ford Ranger pickup in South Carolina in December. The death was the first fatality linked to faulty air bags in a car other than a Honda.