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Why did TAKATA file for bankruptcy?
The founders of Takata came from the pristine Shinga Prefecture in Japan (37% of it still contains natural parks!), the company started in 1933 and was making the parachute cords. As it happens in business, company started expanding and using their traditional knowledge (in this case high qualify cords), automotive was the growing industry during this time, hence in 1960s Takata went into the manufacturing of 'two-point' seat belts and then in 1987 moved into the driver side seat belts. As time went by, once a lucrative market of seat belts slowly started seeing its profit erode (in essence they are just making belts which can be easily replicated!) as more and more competitors started coming into this easy market. The only way to make more money was to find something that was more difficult to make and technologically challenging.
It was during this time (i.e. 1985-1990) Takata was thinking of moving into the airbags, airbags are part of the passive safety systems. Airbags were first conceived in 1919 by two dentists from England! However, it took some 60+ years for the automotive OEM's to take it seriously and implement it in their cars. So when you have a crash the airbag which is cleverly located inside the steering wheel is inflated and it pops out creating a pillow (for few seconds) and saves the passenger from a direct head collision and saves their lives.
The brian of the airbag is the "inflators"... they actually contain a chemical compound and when triggered it creates a mini-explosion inside it and this releases the gases from the side into the airbags. Airbags then break through the steering wheel system and pops out. Earlier airbag system was using a chemical compound called 'Sodium Azide', the main problem with this was that it created fumes which were harmful to the passenger's in the car, they then shifted to 'Ammonium Nitrate', this is a very cheap compound, the main problem with this was that it was unstable, with temperature and moisture the chemical reaction was either delayed or became more potent. The main problem is when it became more potent, then the whole inflator would burst when the crash occurred, this resulted in metal from inflator assembly (i.e. encasing) crashing out through the airbag when deployed which would then hit injure or kill the passengers.
Takata did experiments with other compounds (like Tetrazade) but somehow continued using ammonium nitrate in their airbags. They had been very successful in their business of airbags they had 20% of the worldwide market share! by early 2000 they had expanded to Europe and US in a major way. They had reports of airbag malfunction in early 2000, but somehow these reports never saw the light of the day. Slowly the as drivers started dying in the car crash due to malfunction of airbags, the industry and authorities started noticing these issues and a full-blown investigation was launched. It traced the issues to inflators using ammonium nitrate (Takata was the only company using this chemical compound!).
This resulted in the largest recall in the automotive history, close to 42 million vehicles were recalled, Takata corporation's wealth fell from $8 Billion to sub $20 Million such huge losses and string of lawsuits, in June 2017 Takata filed for bankruptcy and after a tough fight between Autoliv and Key Safety Systems, the Takata's assets were bought over by Key Safety Systems for $1.6 Billion.
This ended the growth of the promising company and glorious dream started by Takezo Takada in 1933.
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