UPDATE 1-Takata enlists restructuring lawyers - WSJ

Tue Mar 8, 2016 4:54pm EST
 
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(Adds background on Takata airbag recalls; regulators warnings about expanding recalls.)

March 8 (Reuters) - Japanese air bag maker Takata Corp enlisted restructuring lawyers at law firm Weil Gotshal & Manges LLP amid recalls covering millions of vehicles, the Wall Street Journal reported, citing people familiar with the matter.

The extent of the law firm's engagement with Takata and the strategies it is advising the company to pursue remain unclear, the WSJ reported. (on.wsj.com/1QEQjSN)

An estimated 29 million Takata air bag inflators have been recalled in the United States in more than 19 million vehicles because the inflators can activate with too much force, sending potentially deadly metal shards into the passenger compartment.

Takata executives met with auto manufacturers in Japan in late January to discuss the supplier's plan to deal with a growing crisis that has seen 14 automakers recall 60 million vehicles worldwide to replace defective Takata inflators.

Among the options Takata has discussed are a spinoff, sale or consolidation of its air bag operations, according to Japanese media reports.

U.S. lawmakers have called on Takata to recall millions more airbag inflators made with the volatile chemical ammonium nitrate. Officials have linked 10 deaths and more than 100 injuries to explosions of Takata airbag inflators that send metal shards flying inside vehicles.

The head of the National Highway Traffic Safety Administration, Mark Rosekind, cautioned in a letter to U.S. lawmakers last week that a greatly expanded recall could "needlessly impose new hardships" on the supply of replacement parts for the 29 million Takata inflators already recalled.

Reuters reported in late February that U.S. auto safety regulators are considering whether another 70 million to 90 million Takata inflators that use the volatile chemical ammonium nitrate as a propellant may need to be recalled in the United States.{nL2N16103U]

Honda, which owns a minority stake in Takata, said last month it didn't plan to extend financial support to Takata. Honda vehicles account for about half of the roughly 50 million vehicles recalled worldwide to replace Takata airbag inflators.

Takata is still struggling to produce replacements for the 28 million inflators that have been recalled so far in the United States. The National Highway Traffic Safety Administration enlisted three of Takata's competitors - Autoliv, ZF's TRW and Daicel - to help produce the replacement parts. As of mid-February, about 7 million inflators had been replaced, NHTSA said. (Reporting by Shashwat Awasthi in Bengaluru; Editing by Shounak Dasgupta and Andrew Hay)