The Japanese company Takata (TKTDY  ) has finally crumbled under the pressure of its exploding airbag calamity. The corporation's faulty airbag inflators, which have lambasted shrapnel in the faces of approximately 200 drivers and passengers, have resulted in the recall of tens of millions of vehicles and been linked to 11 deaths in the U.S. and 17 worldwide.

With debts estimated at more than $9 billion, Takata declared on Monday that it is seeking bankruptcy protection in Japan and the U.S. Takata also aims to sell off the lion's share of its business to a American-Chinese rival called Ningbo Joyson Electronic Corp., which has managed to both avoid any recall costs and land a $1.59 billion takeover of Takata that will add to its own auto parts empire in China.

Ningbo Joyson is acquiring Takata's assets through its exclusively owned U.S. air-bag maker Key Safety Systems Inc, which it acquired last year for $920 million. The deal is designed to protect Key Safety from bearing the cost of Takata's projected 100-million unit recall of faulty air-bag inflators. The inflator business will stay with Takata as will the financial responsibility for the recall, which will cost an estimated $9 billion, according to Takaki Nakanishi, an analyst at Jefferies Group LLC.

© Alexauto321 / Wikimedia Commons

"We caused troubles for our supporters, those who cooperated with us and the creditors," Chairman Shigehisa Takada said at a news conference on Monday where he bowed before the cameras. "On behalf of Takata, I apologize deeply from the bottom of my heart."

The money from the acquisition will be used to cover those and other costs resulting from the airbag recall. But Takata shareholders are unlikely to get their money back, Scott Upham, CEO of Valiant Market Research said.

The company's stock dropped more than 65% last week following reports that its bankruptcy filing was looming. Its shares were suspended Monday because they would be delisted, the Tokyo Stock Exchange said.

Major users of Takata airbags were Honda (HMC  ), Toyota (TM  ) and GM (GM  ). They could also lose money. Upham said these key players are likely to have to pick up the tab for most of the estimated $5 billion that's needed to pay for replacing the tens of millions of Takata airbag inflators still in people's vehicles around the world.

© Senator Claire McCaskill / Flickr.com

The National Highway Traffic Safety Administration estimated at one point that the recall could eventually affect ¼ of all the vehicles in the U.S. Takata reached settlements with some automakers worth $553 million to resolve economic-loss claims tied to the company's faulty products. Toyota, Subaru, Mazda and BMW will reimburse out-of-pocket expenses, provide loaners to some vehicle owners and set up an outreach program to increase participation in recalls. Any remaining funds will be paid, up to $500 each, to vehicle owners or lessees. The settlement covers 15.8 million vehicles but doesn't cover claims over personal injuries or deaths.

With its exit, Takata leaves a significantly large vacuum in the auto safety world that will need to be filled, presumably by Key Safety Systems. One thing is clear however: companies in this space will most definitely adopt a more cautious stance in the future, as will investors, especially before placing their faith in something novel and innovative.