Takata airbag recall taxes supply chain, patience of drivers

April 13, 2016
The continued expansion of the Takata airbag inflator recall has strained the capacity of the troubled manufacturer to provide replacement units. Additional manufacturers are providing replacement equipment, while the NHTSA has resisted calls for even more recalls in an effort to relieve pressure on the supply chain.

The continued expansion of the Takata airbag inflator recall has strained the capacity of the troubled manufacturer to provide replacement units. Additional manufacturers are providing replacement equipment, while the National Highway Traffic Safety Administration (NHTSA) has resisted calls for even more recalls in an effort to relieve pressure on the supply chain.

Dealerships, meanwhile, face the prospect of providing replacement airbags to consumers that might have to be replaced again in the future because of the growing scope of the recall effort.

And in March, Honda Motor announced it would compensate U.S. dealerships for depreciation costs of vehicles they can’t sell because of the airbag recall. Honda will also provide financial assistance to help offset floor planning costs incurred by the automaker’s stop-sales order on new and used vehicles from model years 2007 to 2015.

Some 29 million vehicles have been recalled because of the inflator problem. There are another 50 million vehicles in the U.S. that include Takata airbags that have not been recalled – but could be in the future.

Failure causes pinpointed

The faulty airbag inflators have killed 10 people worldwide and injured another 139. In January, another 5 million vehicles were recalled following the 10th and most recent death, that of a South Carolina man.

Ten automakers hired engineering firm Orbital ATK to investigate the cause of the airbag failures. The company cited the use of ammonium nitrate (a propellant) without a moisture-absorbing desiccant, combined with faulty inflator assemblies and prolonged exposure to hot, humid weather as the causes of the failures. In certain weather conditions, increased moisture in the airbags can cause them to explode.

Newer Takata airbags include a drying agent to mitigate against the moisture problem.

According to a Senate report released in February, there is evidence that Takata deliberately misled auto manufacturers with faulty data and inaccurate information about the airbags and the potential scope of the recalls. Internal documents indicate the company continued to manipulate safety data even after several fatalities and the start of the original recall.

According to the report: "Committee minority staff believe that the emails and other documents referenced above represent, at the very least, a failure by Takata to ensure the integrity of its testing of inflators or to respond appropriately to ethical concerns raised to senior Takata personnel. These apparent testing manipulations and the failure by Takata to address them raise concerns about the safety of all ammonium nitrate-based Takata airbag inflators."

Takata failed to prioritize the safety of its products, and as a result nine people are dead and dozens are injured, and even after exploding Takata air bags had killed these innocent people, the company employees continued to manipulate safety-testing data. This is not only inexcusable, it’s reprehensible,” said Florida Senator Bill Nelson, the senior Democrat on the Commerce Committee investigating the recall.

On Feb. 23, Nelson called for NHTSA to move faster to address the Takata recalls, and for NHTSA to order Takata to stop manufacturing ammonium nitrate inflators and to recall all such inflators.

“Auto manufacturers are installing new live grenades into people’s cars as replacements for the old live grenades,” Nelson said during a recent Senate session. “I urge today Takata and NHTSA to do what should have been done long ago: stop producing these ammonium nitrate air bags and get them out of people’s vehicles.

Such a recall could potentially affect another 90 million vehicles.

Takata, auto manufacturers, and dealerships are already struggling to complete the existing recall effort. NHTSA has called for the industry to target vehicles in regions of the U.S. where heat and humidity pose a more immediate danger.

“Our ongoing analysis presently finds that an immediate recall of all ammonium nitrate inflators would provide no appreciable safety benefit and would engender significant potential harm,” NHTSA Administrator Mark Rosekind wrote in a response to Nelson’s committee report.

NHTSA gave Takata until the end of 2018 to prove its current inflators or safe, or to issue a blanket recall. The company has agreed to phase out the manufacture of such inflators by the end of 2018.

Supply chain shortages

Dealers across the country have reported shortages even as Takata pledged to up its production from 500,000 replacement parts per month to 1 million. Competitors Autoliv, TRW and Daicel are also making replacements for the recalled inflators. All three companies are hoping that they can expand their own airbag business by moving into markets where Takata has dominated. Takata’s share of the airbag and inflator market is expected to drop from 22 percent in 2014 to just 5 percent in 2020, according to Valient Market Research.

However, modifying their existing inflator products to fit into the Takata equipment has proven challenging. In some cases, manufacturers have to re-tool to replicate obsolete designs originally installed in models going all the way back to 2000.

Valient estimates that by this summer, manufacturers should be able to produce roughly 5 million replacement units per month. Even so, it is likely the recall effort will take several more years.

As of Feb. 12, dealers had replaced 7.1 million inflators or roughly 31 percent of affected airbags, according to NHTSA.

Consumers have waited weeks and months to have their airbags replaced. NHTSA has urged automakers to prioritize older vehicles in humid areas so that they can be fixed first. If, after 2018, Takata fails to prove the newer airbag designs are safe, consumers could face the prospect of having their replacement airbag inflators recalled as well.

"If there's one thing we have learned from our investigation, it's that Takata can't be trusted," Nelson said in response to Rosekind’s letter.

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