Transportation Secretary Anthony Foxx warned today that the Takata airbag recall may widen to affect other automakers still using ammonium-nitrate-based inflators.
Transportation Secretary Anthony Foxx warned yesterday that the record airbag inflator recall, already affecting 12 manufacturers, may widen further. With more than 40 million vehicles affected worldwide and 19 million in the US, regulators were increasing their scrutiny of the devices. Volkswagen, Daimler, Jaguar-Land Rover and Tesla Motors are among those automakers still using ammonium-nitrate-fired airbag inflators. The National Highway Traffic Safety Administration (NHTSA) banned them starting in 2018 last week.
“Everyone’s got to be vigilant,” Foxx said in a Monday interview. He was attending a U.S.-Japan Council Conference in Tokyo. The secretary told Bloomberg News that even though safety regulators have been focused on the “12 manufacturers that we know pose a risk to safety of our consumers, it doesn’t preclude companies from doing their own testing. Our investigation remains open, so I wouldn’t preclude the possibility that other OEMs would be affected.”
Meantime, Takata’s shares continued their freefall today, dropping another 2.9 percent to 806 yen on the Tokyo market. The slide is the airbag manufacturer’s longest since April 2014. Shares took a 40 percent drubbing last week.
Concerned about Takata’s ability to complete airbag recall repairs, Sens. Richard Blumenthal, D-Conn., and Edward Markey, D-Mass., have asked how the airbag manufacturer accountable if the U.S. unit goes under. “We have concerns about Takata’s financial solvency, which is now at risk … and that as a result, consumers could be left with defective airbags that no one will be forced to fix,” the pair said yesterday.
NHTSA has fined Takata a record $70 million and it could face another $130 million in fines if it fails to keep its recall schedule. Faced with that financial burden, as well as with the loss of major customers, including Honda, Toyota, Nissan and Mazda with Mitsubishi and Subaru considering dropping Takata as well, the airbag manufacturer has ripped up its earning forecast. Its shares have taken a beating in the market.
“These developments raise the concern that these liability could overwhelm the company and lead Takata Corporation to bankrupt its US subsidiary,” Sens. Blumenthal and Markey stated in a letter to agency administrator Mark Rosekind, according to Automotive News.
The senators sought guidance on how the government can assure that replacement inflators will be available. Further, they sought guidance on how costs for the recall and potential penalties would be handled should Takata’s US subsidiary go bankrupt.NHTSA had no immediate comment.
Over the last week, Honda, Toyota and Nissan announced they would no longer be using Takata airbag components in their products. Honda, until recently, had been Takata’s largest customer, while Toyota and Nissan were also major customers. Mazda also announced that it would no longer use their products.Faulty Takata airbag inflators spurred the largest auto safety recall in history. The fault has been linked to the propellant used in the inflators, ammonium nitrate, which deteriorates when exposed to moisture. As it deteriorates, the propellant tends to explode with more force, potentially bursting inflator housings. To date, eight deaths and more than 100 injuries have been linked to faulty inflators.