Speaking of "Engineering Failures", Takata has declared bankruptcy... 1

[JohnRBaker]

Now who will be responsible for replacing the remaining defective airbags? I read somewhere recently that only something like 40% or so of the defective airbags on the road in the US have been replaced and that the rest was waiting for replacement parts. Will those parts now be forthcoming and who will be paying for them?

Air-bag maker Takata files for bankruptcy protection

http://www.marketwatch.com/story/air-bag-maker-takata-files-for-bankruptcy-protection-2017-06-25

John R. Baker, P.E. (ret)
EX-Product 'Evangelist'
Irvine, CA
Siemens PLM:
UG/NX Museum:

The secret of life is not finding someone to live with
It's finding someone you can't live without

 

[VEBill]

"...forfeiture of assets should Takata file for bankruptcy..."

Bankruptcy doesn't necessarily mean forfeiture of assets. It means protection from creditors (obviously an overly brief definition), and it therefore means that contracts are thus not necessarily enforceable.

Claiming that a contract can overrule bankruptcy rules just isn't correct; it's just not possible. It's similar to those putting up "legal notice" signs trying to overrule legislation.

Of course, people can try. But it's silly

 

[SwinnyGG]

The contracts can, and do, stipulate how Takata structures its debt during a bankruptcy proceeding.

That restructuring of debt by Takata is a process which they control- bankruptcy laws aren't 'overruled'.

The ABC process in bankruptcy proceedings exists for exactly this purpose- it allows a company to structure which debts are to be paid first from any available assets.

 

[VEBill]

Google instantly returns, "The ABC is an insolvency proceeding governed by state law rather than federal bankruptcy law."

So it's a completely different thing.

 

[VEBill]

Getting back to the original question that spawned this 'Definition of Bankruptcy' red herring, Takata is obviously not in a position to pay for the all the Tens of Billions of dollars in liabilities and debts stemming from this fiasco. It will fall to the vehicle OEMs to clean up this mess.

 

[dgallup]

So how long does an airbag inflator have to last before it's no longer the part manufacturers responsibility? Most parts only have to work through the OEM warranty period, typically 3 to 5 years. Certain emission control devices have to keep working 10 years. Nothing lasts forever. Obviously air bag inflators have some bad failure modes but so do lots of other automotive components. If a wheel bearing fails after 10 years nobody goes after the wheel bearing manufacture even if the vehicle flips into a ditch and kills all the occupants.

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The Help for this program was created in Windows Help format, which depends on a feature that isn't included in this version of Windows.

 

[3DDave]

dgallup - the problem for Takata is they knew of a specific defect their inflators were subject to and not only buried the reports but also continued to manufacture them. Not only that, there were other designs that were not subject to that defect, but Takata didn't choose them either.

 

[SwinnyGG]

Google instantly returns, "The ABC is an insolvency proceeding governed by state law rather than federal bankruptcy law."

So it's a completely different thing.

In a federal bankruptcy proceeding assets can be assigned by general assignment.. it's an assignment process that effectively the same as an ABC.

Which can be controlled by an existing contract.

I've been through this, not just read about it in the paper.

The OEMs are going to incur some costs certainly, but Takata doesn't get to just wash their hands.

 

[VEBill]

My point was never this: "...Takata doesn't get to just wash their hands." I never made any such statement, and obviously going through such a process can be 'fatal' to the company involved.

My point was that this claim is somewhat meaningless: "...contracts almost always stipulate that ...bankruptcies do not absolve the supplier of responsibility." If this recall costs tens of billions, then you may rest assured that Takata ain't paying that bill. Ain't. Going. To. Happen. Ever. I'm not sure if that's what you were trying to claim, depending on what you meant by "absolve". Bankruptcy rules can erase debts (absolve), no matter what any contract says. The company may not survive the process, but their debt is even more likely to be killed off.

Also, "...damages Takata owes due to that contract is first in line to be paid out of forfeiture of assets..." Actually, the first to be paid is the Trustee, the second are the government(s) with jurisdiction. There may be others with statutory rights, which may vary with jurisdiction. Finally, the vehicle OEMs with their precious contracts might get some crumbs (if there are any left).

 

[EdStainless]

There have been comments in fillings by some of the auto companies related to how much air bag replacements will cost them since it 'appears that the supplier is no longer a going concern'...

There is also a court case in FL where a Toyota dealer has sued to prevent other dealers from selling used cars that are under recall without making this know prior to the sale, in other words significantly lowering the value of the cars, and creating a liability situation. The dealer that filled this is sitting on a couple hundred cars as he refuses to re-sell them until they are fixed.

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P.E. Metallurgy, Plymouth Tube

 

[cranky108]

https://www.youtube.com/watch?v=RnyhkBU1yaw

Time for securefoam?