The death toll tied to rupture-prone Takata Corp. air bags would
likely rise if the Japanese supplier created a compensation fund
for victims of the faulty parts, a company executive said during a
Senate hearing on Tuesday.
Kevin Kennedy, Takata's North American executive vice president,
said he couldn't commit during the hearing to establish such a
fund, requested by Sen. Richard Blumenthal (D., Conn.). The faulty
air bags, which can explode and send shrapnel flying into vehicle
cabins, has so far been tied to eight deaths and more than 100
injuries world-wide.
Sen. Blumenthal asked Mr. Kennedy to give the Senate Commerce
Committee an answer in two weeks on whether Takata would create a
fund mirroring the one set up by General Motors Co. to compensate
victims of faulty ignition switches in older cars.
GM initially tied 13 deaths to the switch, which can slip out of
the run position and disable safety features including air bags.
The auto maker's fund, run by outside lawyer Kenneth Feinberg and
weighing circumstantial evidence to review claims, has so far tied
117 deaths to the problem.
Takata's Mr. Kennedy said such a fund at his company would
likely uncover additional deaths. "I believe it is likely as many
of these parts are still in the field," he said.
The hearing comes as car makers are fixing roughly 32 million
vehicles equipped with the faulty air bags in the largest
automotive recall in U.S. history. Federal auto-safety regulators,
now informed of all vehicles affected by the recalls, have revised
the figure downward from nearly 34 million.
Mr. Kennedy faced additional questions about the continued use
of ammonium nitrate in air-bag inflaters, and said it was only a
possible contributing cause to explosions. The company has said
humidity and moisture seeping into inflaters, as well as possible
manufacturing processes, are also possible causes.
A Fiat Chrysler Automobiles NV executive, meanwhile, said the
company as of June 8 started replacing all driver-side air-bag
inflaters involved in the recall with parts from TRW Automotive
Holdings Corp. as Takata and auto makers continue searching for the
root cause of the safety problem.
"We were fortuitous to find an alternative," said Scott
Kunselman, Fiat Chrysler's head of vehicle safety and regulatory
compliance. "We did quickly move here to gain confidence that this
would be a permanent solution…this is why we took this path."
Earlier in the hearing, the National Highway Traffic Safety
Administration's campaign for additional funding met resistance in
the wake of a government audit detailing an agency racked by
problems preventing it from protecting consumers from vehicle
defects.
Lawmakers from both parties questioned giving more money to the
agency after a report from the Transportation Department's
inspector general showed regulators missing signs of GM's faulty
ignition switches. The inspector general's report also cited broad
gaps in the way NHTSA officials collect and assess information on
all possible auto defects, including an overreliance and car makers
to report problems.
"I'm not about to give you more money until I see meaningful
progress on improving internal processes in this organization,"
said Sen. Claire McKaskill (D., Mo.), addressing NHTSA chief Mark
Rosekind. "The driving public deserves so much more from the cop on
the beat."
Citing previous experience as an auditor, she called the
inspector general's audit one of the most troubling she's seen of a
government agency. She pointed to differing opinions among NHTSA
officials over when to even open a safety-defect investigation.
Calvin Scovel, the Transportation Department's inspector general
and author of the audit, said giving more money to an agency "whose
processes are not in line in the first place does not seem like a
good idea." Sen. John Thune (R., S.D.), the committee's chairman,
echoed remarks earlier this week that shortcomings among
auto-safety regulators "cannot be solved just by throwing money at
the department."
The agency says it is understaffed and lacks resources to keep
up with a deluge of vehicle complaints, investigations and recalls.
NHTSA chief Mark Rosekind said the agency's $10.6 million budget
for defects investigations is 23% lower than a decade ago when
adjusted for inflation. The agency wants an additional $23.64
million for investigations staff. The agency is implementing 44
specific reforms, including 17 recommended by the inspector
general.
Other lawmakers, including Sens. Bill Nelson (D., Fla) and
Blumenthal said they supported investing more with auto-safety
regulators. Sen. Nelson cited one person at the agency initially
reviewing vehicle complaints that total about 80,000 each year.
Write to Mike Spector at mike.spector@wsj.com
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