The chief executive of TakataCorp., the maker of tens of millions of recalled air bags, has said he intends to resign, a person familiar with the matter said Thursday.Shigehisa Takada, the CEO of Takata and the grandson of the air-bag maker's founder, is expected to attend a meeting with auto makers Friday, where the company will discuss its financial conditions and business plans, another person briefed about the matter said.
Executives and officials from Honda Motor Co. , Toyota Motor Corp. , Nissan Motor Co. , BMW AG and Volkswagen AG are among those expected to attend, the person said.
Takata declined to comment on the matter.
Auto makers have recalled some 60 million vehicles world-wide with Takata-made air bag inflaters that could explode, a problem linked with 10 deaths, Japan's transport ministry has said. Analysts have estimated that costs to replace those air bag inflaters in these cars could reach billions of dollars.
Facing ballooning costs, Takata is likely to need some kind of financial support from auto makers and lenders to stay afloat, such as a capital increase, securing loans or having auto makers pay for much of the costs to fix these air bag inflaters, people involved in the recall process said.
But some of the auto makers and lenders have made Mr. Takada's resignation a precondition for offering any support, they said.
Mr. Takada has recently expressed his intention to step down to people close to the company, a person knowledgeable about the matter said.
Many auto makers have been frustrated at the way Mr. Takada, age 49, has handled the problem of Takata air-bag inflaters that could explode, people involved in the recalls have said. The company's governance and transparency are among the problems, they added.
"A precondition for any support is Mr. Takada's intention to resign," one of the people said.
But it is unclear when he would step down or who would take over as chief of the troubled company if he does resign, they said. The parties involved in recalls haven't agreed on how to resolve Takata's financial woes, one person said.
Takata's financial statement shows the company, with ¥61.7 billion ($519 million) in cash and equivalents as of end-Sept, isn't at immediate risk of running out of cash.
But the statement doesn't fully reflect the full scale of recall-related costs Takata may have to bear in the future.
Currently, auto makers involved in the recalls have been shouldering much of these costs. Once the root cause of why some of these air bags are prone to exploding is identified, then auto makers and Takata will discuss how to split the costs, they have said. Probes are ongoing to find the root cause.
That means much of the recall-related costs aren't reflected in Takata's current financial statements. Moreover, Takata could face further costs through class-action lawsuits and penalties from authorities.
Mr. Takada became the president of the company, which also makes seat belts and child seats, in 2007, when his father, Juichiro, was still chairman. Mr. Takada later took over as chairman and CEO. His father died in 2011.
Back in June, when Mr. Takada was asked in a news conference whether he would resign, he said that he wants to do his job to resolve the recalls.
Takata is set to release its third-quarter results on Feb. 5.