Takata Set to Recall 35 Million More Air-Bag Inflaters
May 03 2016 - 5:30PM
Dow Jones News
Takata Corp. is preparing to recall at least another 35 million
rupture-prone air bag inflaters that U.S. regulators have deemed a
safety risk, said people familiar with the matter, further
escalating a crisis at the Japanese supplier linked to numerous
deaths and injuries.
U.S. regulators could unveil the expanded recall as soon as this
week, the people said. The National Highway Traffic Safety
Administration and Takata remained in discussions Tuesday, the
people said, and the details of the expanded recall haven't yet
been completed.
It isn't clear how many vehicles will be affected by the
additional recalls, but it is likely to be tens of millions. In
addition, the number of inflaters being recalled could increase,
one of the people said. The latest safety campaign adds to a
current U.S. recall of 28.8 million inflaters affecting some 24
million vehicles.
More than a dozen auto makers are currently recalling vehicles
equipped with Takata air bags in one of the largest such actions in
U.S. history. The air bags can rupture and spray shrapnel, a safety
defect linked to 11 deaths globally and dozens of injuries.
The air-bag inflaters expected to be recalled employ ammonium
nitrate as a propellant and lack a drying agent that aims to keep
moisture from building, a factor cited in destabilizing the devices
and causing explosions. Other air bag inflaters, including those
containing desiccant to prevent moisture, aren't expected to be
recalled.
U.S. regulators concluded additional air-bag inflaters should be
recalled after studying three separate probes conducted by Takata;
a group of 10 auto makers; and Honda Motor Co., the manufacturer
most affected by the problematic devices, respectively, one of the
people said. A consent order Takata signed in November gives
regulators broad authority to order the Japanese company to conduct
additional recalls.
U.S. auto-safety regulators are "reviewing the findings of three
separate investigations into the Takata air-bag ruptures," a NHTSA
spokesman said "The recall of Takata air bag inflaters covered by
the NHTSA Consent Order continues and the agency will take all
appropriate actions to make sure air bags in Americans' vehicles
are safe."
"Takata is working with regulators and our auto maker customers
to develop long-term, orderly solutions to these important safety
issues," a spokesman for the Japanese company said. "We strongly
urge all consumers to check NHTSA's www.safercar.gov website and
contact their dealers immediately if they discover their vehicle is
subject to a recall."
The swelling recalls are likely to increase financial pressure
on Takata, which has suffered large stock declines and faced
increased warranty costs amid the continuing safety crisis. The
Japanese supplier earlier this week disclosed $189 million in
additional financial losses for the year ended in March because of
recall costs and settling legal claims from victims of air-bag
ruptures.
Takata is in the midst of trying to sell an interiors division
to raise cash and has enlisted prominent restructuring lawyers in
the U.S. as recalls have mounted, The Wall Street Journal has
reported.
The additional recalls don't cover all air-bag inflaters
employing ammonium nitrate currently on U.S. roads, which could
prompt criticism from Capitol Hill lawmakers looking for regulators
and Takata to take more aggressive actions. Some Senate Democrats
long critical of regulators and Takata have called for all air-bag
inflaters using ammonium nitrate to be recalled.
Takata, regulators and auto makers have pointed to prolonged
exposure to humidity and the age of inflaters as contributing
causes to air-bag ruptures. Pinpointing a specific root cause for
the ruptures has proved elusive. Officials have said it could take
years to address the tens of millions of affected vehicles.
U.S. regulators in November fined Takata $70 million for failing
to alert the government to defective air bags in a timely manner
and ordered the company to eventually stop using ammonium nitrate
in inflaters. The penalty could grow to $200 million should
regulators flag Takata for additional infractions. Takata also
could face another hefty financial penalty depending on the outcome
of a continuing U.S. Justice Department criminal probe. Takata has
said it is cooperating with government officials.
Write to Mike Spector at mike.spector@wsj.com
(END) Dow Jones Newswires
May 03, 2016 17:15 ET (21:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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