Takata Corp.’s CEO announced Tuesday that he will resign after a “new management regime” is put in place, sending shares of the controversy-hit airbag manufacturer soaring.
The Japanese company has been at the center of the largest automotive safety recall in history, linked to its airbags installed in millions of cars across the world. Takata is dealing with over 100 million recalls worldwide, which are likely to cost the company billions of dollars. The defect has been linked to at least 13 deaths and more than 100 injuries have been reported worldwide.
CEO Shigehisa Takada is the first member of the founding family to take public responsibility. He apologized for the scandal last year, but has also defended the company's products.
“I am not clinging to this. My role is to make sure the company does not take a bad turn until there is a passing of the baton,” Takada told an annual shareholders' meeting in Tokyo, according to Reuters.
“I won't try to stick [to my position] for long ... Once I’m certain that the company will no longer go awry, I want to hand the job [to someone else],” he told the closed gathering, the Nikkei Asian Review reported.
“I would like to apologize again for giving many people tremendous worries and trouble due to the inflator problem,” Takada reiterated.
Takada has been widely criticized for his handling of the crisis and has rarely appeared in public even as the firm plunged deeper into turmoil. The announcement of his possible departure sent the company’s shares surging as much as 10 percent. However, they finished 2.18 percent higher when the markets closed Tuesday.
A third-party committee has been enlisted to oversee the company’s restructuring. It has brought in investment bank Lazard and said it would reform governance and resolve cost issues surrounding the recall.
As many as 30 potential investors, including U.S. investment fund Kohlberg Kravis Roberts, have indicated initial interest in providing support for the company and a solution is expected by November, people with knowledge of the discussions told Reuters.
The supplier is facing lawsuits, investigations and huge compensation costs over the defect but so far, the recall costs for Takata have been relatively small as automakers have dealt with most of the burden.
However, if Takata is found to be solely responsible for the fault, it could face a bill of more than $10 billion, a rough estimate if each replacement kit costs around $100.