Key Safety eyes Japan auto expansion in wake of Takata's crisis
TOKYO -- Key Safety Systems Inc., the airbag maker said to be among the bidders for Takata Corp., is considering a further push into Japan after winning new business from the nation’s automakers in the wake of Takata’s record recalls.
The company aims to more than triple revenue from Japanese automakers to $300 million by 2020, from about $90 million last year, according to CEO Jason Luo. The world’s fourth-largest airbag maker, based in suburban Detroit, is considering its first manufacturing plant in Japan and opportunities for mergers and acquisitions to expand, Luo said, while declining to confirm whether Key Safety is bidding for Takata.
“We have been looking for the past couple of years about the potential of building a plant. We will still invest because we think Japan has a good workforce,” Luo said in an interview Tuesday in Tokyo. “The cost in certain areas is very competitive, like Kyushu, because we are also buying a lot of materials from Japan today.”
Buying Takata would create the world’s No. 2 airbag supplier by sales, behind Sweden’s Autoliv Inc., which is also said to be bidding for the Tokyo-based company. A purchase would also likely give Key Safety more access to Japanese companies, adding to its customer base that’s more reliant on U.S., German, Korean and Chinese brands. Takata is at the center of the biggest safety recall in the automotive industry, with more than 100 million devices due to be replaced over their risk of rupturing and spraying shrapnel at vehicle occupants.
Takata met last week with officials from Honda Motor Co. and about a dozen other customers affected by airbag recalls.
The number of fatalities tied to Takata’s inflators reached at least 16 worldwide following the death last month of a Honda City driver in Malaysia.
Key Safety plans to boost inflator production by more than 30 million units to more than 100 million units by 2020 as it wins new customers. It’s adding production lines at plants in the U.S., China, Mexico and Europe and forecasts revenue will expand by 67 percent by the end of the decade. Luo said the company plans to expand its technical center in Japan, without elaborating.
China’s Ningbo Joyson Electronic Corp. bought Key Safety earlier this year for about $920 million, months after U.S. regulators had fined Takata and ordered it to phase out use of ammonium nitrate as its airbag inflator propellant. Key Safety’s management team has been unchanged and is operating independently following Joyson’s acquisition, Luo said.
Luo joined Key Safety in 1997 as director of engineering and became president of the company in 2005. He’s served as CEO since 2007.
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