Senators Write NHTSA, Raise Concerns about how Takata will Manage Airbag Recall

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Democratic Senators Richard Blumenthal and Edward Markey are asking regulators how they will keep Takata Corp. accountable for their recall of air bag inflators, which have been linked to at least eight deaths in the US. The problem is that the inflators can lead to air bag explosion during a crash, propelling shrapnel towards occupants. In a letter to the National Highway Traffic Safety Administration, the Senators state “We have concerns about Takata’s financial solvency, which is now at risk … and that as a result, consumers could be left with defective airbags that no one will be forced to fix,”

NHTSA recently announced heavy fines and an expedited recall schedule. Takata was also ordered to phase out the use of ammonium nitrate propellant.

The Senators questioned whether Takata will be able to properly complete its recall of deadly air bag inflators in light of a $70 million cash penalty. Takata may also be fined up to $130 million if it does not keep up with the recall schedule. Additionally, major customers such as Honda Motor Co., Toyota Motor Corp. and Nissan Motor Co. have dropped Takata’s inflators. “These developments raise the concern that these liabilities could overwhelm the company and lead Takata Corporation to bankrupt its U.S. subsidiary,” Blumenthal and Markey wrote to NHTSA Administrator Mark Rosekind. The Senators asked how the government can ensure the availability of replacement inflators, and how the recall and penalties would be handled if Takata goes bankrupt.

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