Takata Airbag Failure – February Update

The relationship between Takata, the Japanese manufacturer of airbags that have failed during accidents, and the National Highway Traffic Safety Administration (NHTSA) took a turn downwards recently. The NHTSA issued a statement saying that the company was to be fined $14,000 a day for not “fully co-operating” with the investigation into why their airbags have failed – specifically the ones manufactured in one of their Mexican plants. Airbags made in other plants are not affected.

The NHTSA said that although Takata had provided nearly 2.5M documents they did not provide other documents to explain the description of the ones supplied. They also complained that Takata’s behaviour was not co-operative and that they were not supplying the correct documents. The Administration is determined to levy the daily fine as long as they can up to the maximum penalty.

Takata, naturally, disagreed with the NHTSA’s statement saying they were being very co-operative and were supplying all the documents that they were required to do under the “special order” from the Administration. “We continue to keep NHTSA closely informed on the extensive testing efforts we have undertaken. That work has, so far, supported our initial view that age and sustained exposure to heat and humidity is a common factor in the small number of inflators that have malfunctioned,” Takata’s statement said. “We are also in the process of implementing an effort to accelerate replacement recalls in those geographic areas identified as being most at risk.”

However the NHTSA is like a dog with a bone – they won’t let it go and clearly want to push ahead with the fines, so much so that they have gone back to Congress asking to raise the penalty limit from $35M to $300M “to change the culture of safety for bad actors like Takata.”

The NHTSA is also looking into whether Takata broke the law by delaying the announcement of the original recall that has now affected 24M cars worldwide.

Takata now appear to be in a Catch-22 position, they have had to launch litigation in South Carolina after a judge ordered them to preserve airbag inflators from recalled vehicles. Lawyers representing some people potentially injured by the inflator not inflating the bag have started action against the company and the judge’s decision was a result of the start of that action. The NHTSA was furious with Takata for their counter litigation, however the company is in a bind: it needs to test the inflators to meet the requirements of the NHTSA which in turn disobeys the South Carolina judge thus rendering them liable to a fine. So whatever they did, they could be fined! A ridiculous situation that should never have been allowed – the judge should have considered the company’s position and allowed a certain number to be tested to enable the investigation to continue.

Despite the NHTSA being publicly angry, they have created a “preservation order” that trumps the judge’s order thus given some breathing space and this should have been done much earlier and would have negated the need for Takata to start litigation which would have been sensible.

This will drag on for months I suspect!