Recalls

Takata CEO says company has resources to deal with massive airbag recall

Takata airbag image source alexauto321 wikicommons Takata CEO says company has resources to deal with massive airbag recallTakata CEO Shigehisa Takada said his company has adequate funds to deal with a growing global recall of its airbags, which have been installed in millions of vehicles across more than a dozen car brands and can potentially deploy with a bomb-like force.

“Takata is prioritizing the supply of replacement parts. We have sufficient funds put aside, and we are not concerned that we are under-capitalized. We will take steps on the financing side if needed,” Mr. Takada, grandson of the company’s founder, told Japan’s Nikkei newspaper Wednesday.

Mr. Takada also said that the company was analyzing the ammonium nitrate inflator mechanisms from faulty airbags it has collected. Investigators have been examining about 100 inflators a day to pinpoint what is causing the devices to malfunction.

Takata, the world’s second-largest airbag and seatbelt supplier, said it has discovered errors in the airbag manufacturing process at its Monclova, Mexico, plant and has taken measures to correct them.

According to Automotive News, in 2005, Takata closed the Georgia plant where it made the inflators and moved production to a Mexican facility about 300 miles south of San Antonio, Texas. The following year, a series of explosions, traced to the improper storage and handling of the explosive ammonium nitrate, blasted through the factory, prompting authorities to evacuate people from homes in the area.

Takata officials now believe manufacturing flaws allow air moisture to corrupt the ammonium nitrate inflators, which can cause the airbags to explode so forcefully that metal and plastic fragments from the airbag housing blast into the vehicle.

Ten different automakers have collectively recalled more than 15 million vehicles in the U.S. to repair the Takata airbags. Globally, the airbag recall affects about 21 million vehicles.

Five deaths — four in the U.S. and one in Malaysia — have been linked to the defective airbags. In addition to recall costs, Takata currently faces 55 class-action lawsuits for economic losses in the U.S. The company is also under a federal criminal investigation that could lead to heavy penalties. So far, Takata has allocated $774 million for recall costs.

Sources:

Reuters
Automotive News
Car and Driver
New York Times