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Takata Rejects U.S. Demand for Nationwide Air-Bag Recall

Takata Rejects U.S. Demand for Nationwide Air-Bag Recall

Wednesday, 03 December 2014 06:58 AM

Takata Corp. rejected a U.S. regulator’s demand to expand regional air-bag recalls to the entire country, sticking to its piecemeal approach in dealing with a potentially deadly flaw in millions of cars.

The National Highway Traffic Safety Administration is reviewing Takata’s response and deciding its next steps, Deputy Administrator David Friedman said in an e-mailed statement. Hitoshi Sano, Takata’s head of investor relations, confirmed by phone that the company won’t issue a recall beyond the 8 million cars already called back in high-humidity U.S. states and territories.

“NHTSA received Takata’s disappointing response to our demand for a national recall of certain driver’s side airbags,” Friedman said. “Takata shares responsibility for keeping drivers safe and we believe anything short of a national recall does not live up to that responsibility.”

Takata has pushed back against calls to expand repair campaigns from areas where its testing data suggests weather conditions could be compromising air-bag inflators. Declaring recalls for non-humid areas could aggravate a shortage of replacement parts and divert them from areas where they’re most needed, the company said last week.

“If Takata continues to stonewall on this recall, NHTSA is going to take them to court and their customers are going to leave them in droves,” said Clarence Ditlow, executive director of the Center for Auto Safety, a Washington research group. “I don’t see a winning scenario in this for Takata to fight a national recall.”

Metal Shards

NHTSA has said air-bag inflators may malfunction if exposed to consistently high humidity, causing the devices to deploy with too much force, break apart metal pieces and strike passengers. After at least four related deaths in the U.S. and reports of inflator ruptures in areas with lower humidity, NHTSA gave Takata an ultimatum last month.

The regulator told the company to declare by Dec. 2 a recall that identifies a defect in “driver’s side air-bag inflators and is nationwide in scope.” The regulator said failure to do so may lead NHTSA to force a recall and issue civil fines of $7,000 per violation.

Representatives for Toyota Motor Corp. and Honda Motor Co. declined to comment on Takata’s decision not to expand recalls, while Mitsubishi Motors Corp. and Mazda Motor Corp. couldn’t immediately comment.

Overhaul Operations

Takata yesterday announced steps to improve its manufacturing practices and oversight, saying former U.S. Transportation Secretary Samuel Skinner will run a new independent panel that will audit production and provide recommendations for safer air-bag inflators. Two other former U.S. transportation secretaries are being hired as advisers to help overhaul operations.

“Takata remains committed to cooperating closely with our customers and NHTSA to address the potential for inflator rupturing,” Chairman and Chief Executive Officer Shigehisa Takada said in a Dec. 2 statement. “We will take all actions needed to advance the goal of safety for the driving public, including working to produce additional replacement units to support any further recalls that may be announced by our customers.”

Takata said it will take “dramatic actions” to increase its ability to produce replacement kits and has enlisted “top scientists across the globe” to analyze air-bag failures.

Congressional Hearing

Hiroshi Shimizu, Takata’s senior vice president of global quality assurance, is scheduled to testify today at a congressional hearing -- the second in less than two weeks -- about the defect and the company’s response to fixing the problem. During a Nov. 20 U.S. Senate hearing, Shimizu apologized for the air-bag incidents and said the company was trying to speed repairs.

Japan’s regulators and NHTSA are conducting daily meetings to share information about Takata recalls, Transport Minister Akihiro Ohta told reporters last week. The crisis poses a threat to the reputation of the nation’s manufacturing sector, he said during a Nov. 28 briefing in Tokyo.

It’s already damaged Takata’s reputation among investors, who have pushed the company’s stock down 56 percent this year through Dec. 2, compared with a 9.6 percent gain for the benchmark Topix index. The shares rose 3 percent to 1,377 yen at the close of trading today in Tokyo.

The faulty air bags are linked to at least four deaths in Honda vehicles in the U.S. and another in Malaysia. Honda, Takata’s biggest customer, and nine other automakers including Toyota and Bayerische Motoren Werke AG are affected by the U.S. recalls.

Piecemeal Recalls

Piecemeal recalls of almost 8 million cars over two years left drivers unsure whether their air bags were prone to malfunction. NHTSA last month issued a consumer advisory with erroneous information about the cars affected and directed people to an inoperable website.

Takata on Dec. 1 said it responded to a separate NHTSA request for answers to 36 questions about the air-bag defect, including on quality control at a factory, the use of contaminated or improperly formulated propellant and a complete accounting of deaths and injuries. A Takata spokesman, Toyohiro Hishikawa, confirmed submission of the answers, though declined to comment on the content of the responses or if the company will make the submission public.

Independent Testing

Toyota on Dec. 2 called for an industrywide independent testing program of air-bag inflators to supplement what Takata is doing to get to the bottom of the alleged defects. It’s inviting other automakers affected by the recalls to discuss hiring a yet-to-be named engineering expert to conduct tests and share results with all the companies.

Other automakers echoed Toyota’s call. Honda made a nearly identical statement supporting coordinated, independent testing with the goal of ensuring all defective inflators are identified and fixed as quickly as possible.

Ford Motor Co. said it plans to join the proposed industry effort to investigate and develop solutions. Nissan Motor Co. has already begun the process of independent testing and welcomes Toyota’s decision, said Steve Yaeger, a spokesman for the Yokohama, Japan-based company.

General Motors Co. said in a statement it looks forward to “supporting an industry initiative under NHTSA guidance” to better understand the performance of Takata inflators.

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Takata Corp. rejected a U.S. regulator's demand to expand regional air-bag recalls to the entire country, sticking to its piecemeal approach in dealing with a potentially deadly flaw in millions of cars. The National Highway Traffic Safety Administration is reviewing...
takata, airbag, recall
Wednesday, 03 December 2014 06:58 AM
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