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Takata would stop making air-bag inflators under new plan - sources

Reuters  |  TOKYO 

By Naomi Tajitsu and Maki Shiraki

TOKYO (Reuters) - Japan's Corp <7312.T>, facing over the biggest recall in automotive history, would stop making air-bag inflators after completing a global recall, under a restructuring plan under consideration by its steering committee, sources told on Friday.

The committee is discussing plans with rival Key Safety Systems Inc (KSS) which is negotiating to take control of the company. Any plan would require final approval from Takata's board before the air bag maker submits them as part of expected filings in the United States and

declined to comment on the plans.

is still building replacements required under a recall of around 100 million inflators that could detonate with excessive force after prolonged exposure to heat.

Exploding airbag inflators have been blamed for at least 16 deaths and more than 150 injuries worldwide.

would stop producing airbag inflators after it completes production of replacement parts and fulfils existing supply contracts for them with automaker clients, the sources said.

One source said existing contracts would likely end around 2020.

Job cuts are also on the table, the sources said, including upper-level managers involved in manipulating inflator test results to conceal possible defects. Many plant managers would likely remain to ensure that production continues during the transition period.

The plan is critical for a restructuring that could be launched as early as next week. is hoping to erase billions in liabilities and resolve the recall of air-bag inflators.

Any would pose limited risk to Takata's ability to supply the roughly 100 million replacement inflators required to complete the global recall, one of the sources familiar with the company's plans said. U.S. vehicle safety regulators are putting pressure on and automakers to speed up the replacement of defective inflators in the United States.

The plan would also have air bags and seatbelts rebranded as KSS products after emerges from Michigan-based KSS, owned by Chinese supplier Ningbo Joyson Electronic Corp <600699.SS>, currently is a smaller competitor to in airbags and seatbelts.

(Reporting by Naomi Tajitsu and Maki Shiraki; Additional reporting by David Shepardson in Washington; Editing by William Mallard and Jane Merriman)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)