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From Products Liability Law Daily, June 24, 2015

Senate report charges Takata with putting profits before safety; underlying cause of airbag ruptures still uncertain

By Pamela C. Maloney, J.D.

Takata Corp. (TK Holdings, Inc.) may have prioritized profit over safety by halting global safety audits for financial reasons, an investigative report prepared by the Senate Commerce Committee’s Office of Oversight and Investigations Minority Staff revealed. The report, entitled “Danger Behind the Wheel: The Takata Airbag Crisis and How to Fix Our Broken Auto Recall Process,” was released one day before the committee resumed hearings into the vehicle safety efforts undertaken by the National Highway Traffic Safety Administration following reports of injuries associated with defective airbags. In response to the report’s charge that even after 10 years, Takata still could not identify a root cause of the ruptures, an executive at Takata testified before the committee on June 23 that the company’s best current judgment—based on ongoing testing and analysis—was that the potential for rupture was related to long-term exposure to persistent high heat and high absolute humidity, a position echoed by NHTSA.

Background. In November 2014, the Senate Commerce Committee held a hearing to determine the scope, potential cause, and appropriate congressional response to the allegedly delayed response from Takata, automakers, and federal regulators to reports of serious injuries and deaths associated with Takata airbag inflator explosions that resulted in the expulsion of pieces of shrapnel. During the ensuing months, committee staff members gathered and reviewed approximately 13,000 documents totaling more than 90,000 pages, all of which contained details on the airbag inflator production process, the types of propellant used in these inflators, inflator failure modes analysis, and the deaths and injuries allegedly caused by the defective airbags.

Findings. Key among the findings in the report was that Takata was aware, or should have been aware, of serious safety and quality control lapses in its manufacturing plants as early as 2001. In addition, documents indicated that Takata was informed of three serious incidents involving faulty inflators in the first half of 2007 but failed to issue the first recall until November 2008. The overall findings of the investigation uncovered a pattern of failures and missteps that did not quickly or effectively respond to a serious safety defect. Other key findings in the report include:

  • An unknown number of replacement parts might be defective as well;

  • Despite being in the midst of what would become the largest auto recall in U.S. history, an April 2011 email from a Takata senior vice president noted that “Global safety audits had stopped for financial reasons for [the] last 2 years”; and

  • Federal regulators failed to “promptly investigate” early reports of the defective airbags.

Recommendations. The minority report included a number of recommendations aimed at protecting consumers and strengthening oversight of vehicle defects, including: increasing civil penalties for safety violations; enhancing independent testing of vehicle defects; enacting stronger incentives for whistle blowers to report safety problems; improving recall completion rates; and providing loaner or rental vehicles to car owners affected by recalls.

Companies: TK Holdings, Inc.; Takata Corp.

MainStory: TopStory MotorEquipmentNews

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