Professionalism/Takata Corporation and Airbags

Introduction

Takata (Unternehmen) logo

Takata Corporation is a Japanese based automotive parts company that produced vehicle airbags for several automaker companies, including Ford, Toyota, Honda, BMW, Chrysler, and many others. They are 1 of 3 major suppliers of airbags producing about 20% of airbags sold worldwide. Many Takata airbag inflators have the potential to rupture and send flying debris inside the vehicle. This issue prompted the largest series of automotive recalls in U.S. history, with 19 automakers having to recall up to 69 million inflators in 42 million vehicles. At least 20 people have been killed worldwide and more than 180 injured. Takata's negligence brought a criminal conviction and fines against the company, eventually forcing it into bankruptcy protection.

Reason For Failure

Takata used a phase-stabilized ammonium nitrate (PSAN) propellant in the airbag inflator without including a drying agent. The inflator assembly also did not adequately protect against outside moisture. This moisture inside the inflator, combined with long term exposure to heat could cause the inflator to rupture when activated. Many victims whose airbags exploded were injured by metal shards from the inflator. Because heat and humidity are factors in the airbag's failure, this rupturing has been more common in southern states, especially Florida.

Takata's Cover-up

In litigations it was revealed that Takata knew about these faulty inflators as early as 1999 and waited until 2015 to formally acknowledge the safety risk. Takata did a lot of business with Honda which could have been one reason why they kept news of the defect quiet, to keep from losing business. As a result of the cover-up, Takata was fined $200 million dollars for withholding and denying the release of the information. As lawsuits accrued against Takata they pled guilty and declared bankruptcy in 2017. As part of their final judgement, they needed scientific data to say their equipment was safe and could only distribute their Ammonium Nitrate airbags as recall replacements. They were fined an additional $1 billion dollars, in which $850 million dollars was to be given to automakers who bought their inflators and were stuck with the litigation costs and recall costs, and $125 million dollars was awarded to the victims. Takata was bought by a rival company for $1.6 billion dollars. During litigations two members of the corporation were found to play important roles in this controversy. Thomas Sheridan, an airbag engineer, and Al Bernat, who was a testing engineer. Mr. Sheridan's deposition during a lawsuit involving a paralyzed woman stated that he had the data but was unable to examine the individual parts. He said that the vice president of engineering at the time, Mr. Bernat, had discarded the evidence. Sheridan was quoted as saying that he was not surprised that the airbags were linked to deaths and injuries: “I didn’t think it would take so long for the failures to show up,” he said. “It took a lot longer than I thought.” Takata insisted that their data related to the accusers airbag showed that it would not deploy forcefully as was claimed. Safety regulators fined Takata an additional $70 million dollars which could grow by $130 million dollars for manipulating its test data.

Lawsuits Against Takata

The Takata Corporation settled confidential settlements with victims to avoid the problem from reaching public domain. Victims said: "it was like they were paying us off to shut us up." These settlements kept the defects out of the public domain. Additionally 44 states and Washington D.C reached a deal with Takata for $650 million to settle consumer protection claims. However, the states decided that they would not collect the settlement to allow victims a greater share of what would be Takata's dwindling funds. South Carolina was the only state to accept any payment to cover the cost of initializing the investigation against Takata. Takata's lawsuits are brought by plaintiffs who claim that they suffered injury that could have been prevented had they known about the defect. Key points for these lawsuits are concealing the defect, downplaying the defect, and producing a defective airbag. These lawsuits provide compensation for bodily harm, disability/impairment, disfigurement, mental anguish, loss of enjoyment of life, medical bills, lost wages, and vehicle/property damage. Anyone who is harmed through the deployment of these airbags, whether malfunction or safety mechanism, are eligible for these lawsuits. In some cases these deployments can be filed as wrongful death suits.

Other Participants

National Highway Traffic Safety Administration

The NHTSA investigated Takata airbags as incidents arose, and pressured Takata Corporation to admit there was a default in some of their airbags. In May 2015, Takata, under pressure from the NHTSA, agreed to expand their recall to include airbags in cars nationwide, instead of only recalling airabags in a few southern states with consistently high heat and humidity. The NHTSA also pressured automakers to speed up their repair programs, due to the huge number of airbags being recalled.

The NHTSA has promoted awareness of the dangers of Takata airbags and the importance in getting defective ones replaced on their website. And they have strongly encouraged media outlets to report on the issue. Several of their news stories on their website include at the bottom: "NOTE TO MEDIA: NHTSA encourages media coverage of this event in an effort to increase public awareness of the urgency of getting recalled Takata air bag inflators replaced. Car owners should visit www.safercar.gov to check the recall status of their vehicles and for more information on what the recall means to them" (p. 7)

Despite their accomplishments the NHTSA's handling of the Takata airbag recalls has been criticized by the Department of Transportation, a DOT spokesperson told ABC news in 2014: "The roll out of the safety advisory by NHTSA was not optimal, but what is most important right now is that a NHTSA-led investigation uncovered a very serious defect" (p. 3).

Orbital ATK

Orbital ATK , on behalf of the Independent Testing Coalition (ITC), tested the Takata airbags independently to find the source of failure. The ITC, formed in December 2014, is made up of ten automakers who's vehicles contained recalled Takata airbags. Once Orbital ATK tested the airbags and found the cause of failure they submitted their findings to the National Highway Traffic Safety Administration in 2016.

Consumers & Victims

Many consumers are frustrated because of the frequently long wait time to get their defective airbags replaced. Due to the high number of recalls in place, automakers had to replace the most at-risk airbags first, forcing many consumers with lower risk (but still potentially dangerous) airbags to wait for several weeks or even months between when their car's airbag was recalled and when the local dealer was able to replace it. Victims and families of victims who have been killed or injured by airbags sued Takata and automaker companies in a class action lawsuit. In addition to that, some families have attempted to sue Takata individually for punitive damages.

Automakers

Many of the initial injuries involved 2001 Honda Accords and Civics. In November 2008, Honda responded by recalling 4000 vehicles globally as it became apparent that Takata airbag inflators may produce excessive internal pressure causing them to rupture and propel metal fragments into the car. The first deaths in the United States occurred in 2009, both involving 2001 Honda Accords. Honda as well as Takata denied fault in the first death and settled for an undisclosed sum. The second case was settled for $3 million.

In April and May 2013, Toyota Motor, Honda, Nissan Motor, Mazda Motor, and BMW, recalled a total of 3.6 million cars. Then on June 11, Toyota expanded that recall by 2.3 million additional vehicles, many for the second time, though for a different airbag. Takata admitted it had kept inadequate records and that the number of recalled cars could still rise as automakers discover more models fitted with defective air bags.

On June 11, 2014, Toyota expands its prior recall to 2.27 million vehicles globally. On June 23, 2014, Honda, Nissan and Mazda recall 2.95 million vehicles, expanding their April 2013 recall, bringing the total recall to about 10.5 million vehicles over five years. July 16, 2014, BMW recalls about 1.6 million more cars worldwide.

Many automakers have been slow to replace the potentially deadly inflators. A report by an independent monitor said that as of September 15, 2017, automakers have recalled 43.1 million inflators. Of those, only 18.5 million, or 43 percent have been replaced.

There are instances of automakers attempting to avoid recalls. Ford appealed the recall of certain models since the inflators contained a drying agent, "At this point, there is no data to suggest a recall is needed,” even though Takata said they were still capable of exploding. General Motors appealed the recall of some truck models because it said their inflator casings were more robust and located in areas not prone to moisture. In its petition seeking the delay, GM said that 52,000 air bags in its trucks and SUVs have inflated in crashes, and none has ruptured. GM also said Takata has tested 1,475 GM inflators and all worked as designed. General Motors was allowed to delay a large recall of potentially defective air bags, giving them time to prove that the devices are safe and to possibly avoid a huge financial hit. The testing could help GM fend off several recalls totaling 6.8 million trucks and SUVS with the same inflators that ultimately could cost the company $870 million.

Nissan has agreed to a $98 million class-action settlement with consumers to cover the economic losses they've incurred because of faulty Takata airbags. Among the possible benefits:

Payments of up to $500.

Free rental car for use while awaiting repairs.

Reimbursement of reasonable expenses, including transportation, towing and lost wages or childcare costs, accumulated as a result of the recall.

The funds will also support a program to try to convince Nissan owners to get their vehicles repaired. Only 30% of Nissan vehicle owners had gotten their Takata air bags replaced as of June 2017. Similar agreements have been made by Toyota, BMW, Mazda and Subaru.

To prevent the possibility that an affected Takata airbag inflator can ever be used as a replacement part, Honda searched salvage yards nationwide to find and secure recalled inflators. This voluntary effort has successfully removed over 130,000 inflators from salvage yards. They also requested that major online auction sites prohibit and stop the sale of affected airbags. Honda applied graphics about the recall to more than 300 American Honda Parts & Service trucks, transforming them into rolling billboards that encourage affected owners to take immediate action. These trucks cover more than 100,000 miles per day, all across the country. Honda sent teams of representatives to physically knock on owners’ doors to assist them with scheduling recall repairs. Hundreds of additional people were hired to continue this effort with the goal of repairing or accounting for 100% of vehicles with high risk inflators.

Conclusion

Takata kept quiet about the defect in their airbags. They neglected to alert consumers about the dangers and purposefully covered up their test data. The defective airbags were not the first major recall Takata was forced to implement either. In 1995, Takata produced 8.8 million defective seat belts, 90% of which were later recalled. Unfortunately, Takata Corporation did not learn from this experience, and as a result many people have been killed and injured from their defective airbags. Takata's actions are similar to those of Volkswagen, which altered its equipment to produce false test results in order to pass the emission standards. Many engineers knew about the defect in the airbags, however no one came forward and released that information to the public. It seems that some engineers did not appreciate the gravity of the situation. In an email from 2006 obtained by The New York Times, Takata airbag engineering Bob Schubert wrote "Happy Manipulating!!!" in reference to airbag test results. This blatant disregard for consumer safety is very dangerous and unprofessional, especially for a company that produces safety equipment for automobiles.