TOKYO-- Takata Corp., whose air bags have been subject to a
massive recall, has booked Yen2.9 billion ($25.3 million) in new
recall-related charges, widening a projected full-year net loss to
Yen25 billion.
The automotive company's losses could expand further as auto
makers consider expanding recalls and a probe by the U.S. federal
auto-safety regulator intensifies. Honda Motor Co. on Thursday said
it is adding to its air-bag recalls, following similar moves by
rivals Toyota Motor Corp. and Nissan Motor Co. Takata said its
forecasts don't take into account any future recalls.
Honda on Thursday upgraded a safety campaign to a recall to
encourage owners to bring their vehicles to a dealer for repairs,
and said it would expand its recall to include Guam, Saipan and
American Samoa.
Since 2008, Takata has been embroiled in a safety-recall crisis
involving potentially explosive air bags and inflaters it made in
the U.S. and Mexico. The issue has been linked to as many as four
deaths.
Certain passenger- and driver-side air bags that Takata made
since 2000 are at risk of exploding too forcefully, sending metal
shrapnel into a vehicle. The U.S. National Highway Traffic Safety
Administration is pushing Takata to accelerate its production of
replacement parts.
To date, 10 auto makers, including Honda, Toyota, Nissan and
General Motors Co., have recalled more than 10 million vehicles in
the U.S. At the end of October, NHTSA urged Takata and these car
makers to promptly recall vehicles in certain hot and humid
regions, including some regions where companies had conducted
safety campaigns.
Takata CEO Shigehisa Takada apologized over the recent recalls
in late October. "We are fully committed to promptly identifying
the underlying cause of the problems, and to do our best to deliver
the safest products to our customers," he said in a statement.
Takata assumed in its forecast for its March-ending fiscal year
that the company will pay all recall-related costs, Chief Financial
Officer Yoichiro Nomura said. He declined to comment on whether
Takata might later split costs with auto makers and what any
sharing might be. "We certainly do bear the manufacturing
liability," Mr. Nomura said at a news conference in Tokyo. "We are
working so that we can hand over the replacement."
He declined to speak in detail about the production pace of
replacement inflaters, though he said that he hasn't heard of any
problems and that Takata hasn't asked other inflater manufacturers
to produce replacement parts for it.
Mr. Nomura also said he wasn't aware of any product-order
cancellations for the second half of the financial year.
Takata posted a fiscal first-half net loss of Yen35.2 billion,
compared with a net profit of Yen769 million in the year-earlier
period. The company, which reports its earnings based on Japanese
accounting standards, didn't provide a quarterly breakdown of the
figure. According to calculations suggested by Takata, subtracting
an April-June net loss of Yen38.6 billion from the total indicates
the company had a net profit of Yen3.4 billion for the three months
ended Sept. 30.
Takata took a Yen5.2 billion charge for the latest quarter,
Yen2.9 billion of which was related to recent recalls. The rest
involved money to settle U.S. cartel-related cases.
The projected full-year loss would be Takata's second such loss
in three years. In the year ended March 2013, Takata posted a net
loss of Yen21.1 billion to cover costs connected to recalls.
Separately, Daicel Corp., a Japanese air-bag inflater maker that
competes with and supplies parts to Takata, on Thursday raised its
full-year net profit outlook by 19% to Yen28.5 billion, citing a
weaker yen and solid performance in businesses besides
inflaters.
The Osaka-based company, which makes a wide range of products,
including cigarette filters and optical films, didn't cite any
impact from the Takata air-bag recall. The business unit that makes
inflaters accounts for around 20% of its total revenue.
U.S. federal auto-safety regulators, already under fire for the
handling of the General Motors ignition-switch recall, have been
investigating why some Takata air-bag inflaters have exploded in
certain high-temperature and high-humidity areas, such as Florida,
after years on the road.
NHTSA recently ordered Takata to submit documents related to
manufacturing problems involving certain air-bag inflaters, and it
ordered Honda to submit records related to deaths and injuries.
Write to Yoko Kubota at yoko.kubota@wsj.com
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