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Takata bankruptcy raises concern among suppliers, employees

Takata Corp. suppliers and employees voiced concern Monday
following the embattled Japanese air bag maker's decision to file for
bankruptcy protection amid a global recall of its defective air bag

"We just received delivery orders two days ago, but I'm worried
if we will really be paid," an employee at a car component company in
the city of Takashima in Shiga Prefecture said, adding, "Even if the
amount of transactions is small, it will hurt smaller firms like us."
Takata started business as a fabric firm in the prefecture in 1933.

According to credit research agency Tokyo Shoko Research Ltd.,
around 40 percent of Takata's more than 130 tier 1 suppliers are
based in the Kinki region, mainly in Shiga, western Japan.

A worker at a factory that makes parts for Takata's unit Takata
Kyushu Corp. in Saga Prefecture, southwestern Japan, was also
confused about the decision.

"I'm afraid that this plant may go bust in the future," the
worker said.

A man in his 40s working at Takata's seat belt manufacturing
plant in Shiga was upset, saying the company had not given any
explanation regarding the bankruptcy filing.

"Workers are also talking about what will happen now that the
company will be owned by a Chinese firm," he said.

Takata has decided to sell its business to U.S. auto parts maker
Key Safety Systems Inc., owned by Chinese company Ningbo Joyson
Electronic Corp.

An official of the Shiga prefectural government said it will
closely watch for any impact from Takata's bankruptcy filing on local

Hiroshige Seko, minister of economy, trade and industry, told
reporters Monday he had instructed ministry officials to set up a
"safety net" for small and medium-sized companies that could be
affected by Takata's decision.

The Japanese government is seeking to avoid a chain reaction of
bankruptcies following Takata's decision by providing financial
support through a scheme to aid small and medium-sized companies
struggling due to changes in economic conditions or disasters.

The system was applied when Japanese semiconductor maker Elpida
Memory Inc. went bankrupt in 2012.

Seko said he viewed the situation as "unavoidable given the
harsh business climate" due to the global recall. The minister also
expressed hope that Key Safety Systems will fix Takata's finances and
he "expects a quick turnaround." (June 26)