Takata takeover spells opportunity for Key Safety Systems
US company CEO confident of turning around bankrupt air-bag maker
TOKYO -- U.S. autoparts maker Key Safety Systems plans to expand in Japan after its takeover of bankrupt air-bag manufacturer Takata, said company chief executive Jason Luo on Monday.
"We very much value the footprint Takata has in Japan. We leverage that footprint, continue to invest in that footprint, and look to create further job opportunities," said Luo in an interview with The Nikkei.
"We do not have a plan for ... closure of the manufacturing sites in Japan," he emphasized.
Luo made the remarks after his Michigan-based company announced a basic agreement to take over most of Takata's assets and operations for 175 billion yen ($1.588 billion). Takata will use the proceeds to compensate victims of the recall and to help repay automakers who have shouldered related costs.
Key Safety Systems is a subsidiary of China's Ningbo Joyson Electronic.
The CEO says Key Safety Systems will relocate its Asian headquarters to Tokyo from Shanghai once the takeover is complete, which he said should happen in the first quarter of 2018.
"We will establish our Asia headquarters in Japan. We will continually invest and support R&D and investment activities in Japan," he noted.
Takata's operations include production of seat belts, air bags and children's car seats, and has had a global market share of 20% in the air-bag market.
The Tokyo-based company filed for bankruptcy protection earlier in the day, facing massive costs for dealing with global recalls of its air bags linked to deadly accidents.
Luo said his company was "fortunate" to take over Takata's operations, noting its global network, skilled workforce and strong technology base. "We see they have a very strong seat-belt portfolio, a lot of technology and a dedicated workforce globally."
Takata also has a large client base across the globe, including many Japanese automakers. "The industry needs them," Luo pointed out. He said he expects to sign a formal agreement with Takata in the next few weeks.
Luo said he hasn't decided who will lead the company's new Asian headquarters in Tokyo. He will interview people from Takata as well as people from his own company before deciding on the leadership team, he said.
The U.S. company will not inherit assets that are tied to the recall or legal liabilities associated with it. Those responsibilities will remain with Takata, he stressed.