Fil­ing: Car­mak­ers knew air bags flawed, used them any­way

Northwest Arkansas Democrat-Gazette - - BUSINESS & FARM - HIROKO TABUCHI

Five au­tomak­ers knew for years that Takata’s air bags were danger­ous and could rup­ture vi­o­lently, but con­tin­ued to use those air bags in their ve­hi­cles to save on costs, lawyers rep­re­sent­ing vic­tims of the de­fect said in a court doc­u­ment filed Mon­day.

The Jus­tice Depart­ment’s crim­i­nal in­ves­ti­ga­tion into Takata’s rup­ture-prone air bags has painted au­tomak­ers as un­wit­ting vic­tims of a sup­plier that ma­nip­u­lated safety data to hide the de­fect, which has been linked to at least 11 deaths and over 100 in­juries in the United States.

The lawyers’ ac­cu­sa­tions against Ford, Honda, Nis­san, Toy­ota and BMW, filed in law­suits against Takata and the au­tomak­ers in U.S. District Court for the South­ern District of Florida, point to a deeper in­volve­ment by au­tomak­ers that used Takata’s de­fec­tive air bags for years. The de­fect has prompted the na­tion’s largest-ever au­to­mo­tive re­call, af­fect­ing nearly 70 mil­lion air bags in 42 mil­lion ve­hi­cles.

Takata pleaded guilty to wire fraud Mon­day in fed­eral court in Detroit and agreed to pay a $1 bil­lion penalty for con­ceal­ing the de­fect.

The com­pany’s chief fi­nan­cial of­fi­cer, Yoichiro No­mura, en­tered the guilty plea on Takata’s be­half. He also agreed that Takata will be sold or will merge with an­other com­pany.

The penalty con­sists of $850 mil­lion in resti­tu­tion to au­tomak­ers, $125 mil­lion for vic­tims and fam­i­lies and a $25 mil­lion crim­i­nal fine.

Fed­eral pros­e­cu­tors said last month that they had charged three Takata ex­ec­u­tives with fabri­cat­ing test data. Those ex­ec­u­tives re­main in Ja­pan.

In a fil­ing in Florida last week, au­tomak­ers pointed to Takata’s pend­ing guilty plea to ar­gue that the sup­plier alone was cul­pa­ble and that au­tomak­ers were vic­tims of a coverup. But the plain­tiffs had long ar­gued that the au­tomak­ers were more deeply in­volved in the han­dling of the de­fect. Last sum­mer, The New

York Times re­ported in­di­ca­tions that au­tomak­ers, rather than be­ing the vic­tims of Takata’s mis­steps, had pressed their sup­pli­ers to put cost be­fore all else. That report fo­cused on Gen­eral Mo­tors, which is not named in the Florida case.

The fil­ing by the plain­tiffs says emails and in­ter­nal doc­u­ments turned over by Honda show that in 1999 and 2000, the au­tomaker was in­ti­mately in­volved in de­vel­op­ing a prob­lem­atic pro­pel­lant, or ex­plo­sive, used in Takata’s air bags. The pro­pel­lant is housed in a steel con­tainer called the in­fla­tor, which in the Takata case can rup­ture, shoot­ing

metal frag­ments to­ward the car’s driver or pas­sen­gers.

That pro­pel­lant, based on a volatile compound, raised con­cerns in­ter­nally at Takata at the time, and the is­sue long plagued the com­pany’s en­gi­neers. Dur­ing test­ing of Takata’s in­fla­tors in 1999 and 2000 at Honda’s fa­cil­i­ties, at least two in­fla­tors rup­tured, ac­cord­ing to the fil­ing. Still, Honda pushed a par­tic­u­larly prob­lem­atic con­fig­u­ra­tion of the pro­pel­lant over Takata’s ob­jec­tions, the fil­ing said. Honda chose Takata’s air bags be­cause of their rel­a­tive “in­ex­pen­sive­ness,” the fil­ing quoted Honda doc­u­ments as say­ing.

The first re­calls of Takata’s air bags did not take place un­til al­most a decade later, when Honda re­called 4,000 ve­hi­cles in 2008. The Times has re­ported that Honda and Takata be­came aware in 2004 of an air-bag ex­plo­sion in a Honda Ac­cord in Alabama that shot out metal frag­ments and in­jured the car’s driver. But the two com­pa­nies deemed it an anom­aly and did not is­sue a re­call or seek the in­volve­ment of fed­eral safety reg­u­la­tors.

The fil­ing cites in­ter­nal doc­u­ments from Ford, Nis­san and Toy­ota in­di­cat­ing that cost con­sid­er­a­tions in­flu­enced the au­tomak­ers’ de­ci­sion to adopt Takata’s air bags in the early 2000s, de­spite safety con­cerns.

Toy­ota used Takata’s air bags “pri­mar­ily” for cost rea­sons, even though the au­tomaker had “large qual­ity con­cerns” about Takata and con­sid­ered the sup­plier’s qual­ity per­for­mance “un­ac­cept­able,” the fil­ing said. In 2003, a Takata in­fla­tor rup­tured at a Toy­ota fa­cil­ity dur­ing test­ing, the court fil­ing said.

In 2005, Nis­san be­gan in­ves­ti­gat­ing adding a dry­ing agent to Takata’s air-bag in­fla­tors out of con­cern that ex­po­sure to mois­ture made the pro­pel­lant par­tic­u­larly un­sta­ble, the fil­ing said. Takata en­gi­neers had long known that the ex­plo­sive was sen­si­tive to mois­ture, though the com­pany still main­tains that the ex­plo­sive can be sta­bi­lized to with­stand moist con­di­tions.

Ford chose Takata’s in­fla­tors over the ob­jec­tions of the au­tomaker’s own in­fla­tor ex­pert, who op­posed the use

of Takata’s pro­pel­lant be­cause of its in­sta­bil­ity and sen­si­tiv­ity to mois­ture, the fil­ing said. But Ford over­rode those ob­jec­tions be­cause it thought Takata was the only sup­plier that could pro­vide the large num­ber of in­fla­tors Ford needed, the fil­ing said.

The fil­ing said Ford, Honda, Nis­san and Toy­ota were also aware of in­stances of rup­tures years be­fore any re­calls.

The fil­ing also men­tions BMW and points to cir­cum­stan­tial ev­i­dence that it was sim­i­larly in­volved in what fed­eral pros­e­cu­tors, in their crim­i­nal com­plaint and in an­nounc­ing the Takata guilty plea agree­ment, have called a coverup. But the Ger­man au­tomaker has so far re­fused to sub­mit doc­u­ments in the case, the fil­ing said.

Rep­re­sen­ta­tives of Nis­san and BMW said the com­pa­nies could not com­ment on ac­tive cases. A Toy­ota rep­re­sen­ta­tive also de­clined to com­ment. Honda, Ford and Takata did not im­me­di­ately re­spond to re­quests for com­ment.

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