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Takata in largest recall

May 20, 2015

Japanese auto parts giant Takata has doubled the number of vehicles in the US being recalled due to the company's defective airbags, sending the firm's shares plunging in Tokyo on Wednesday.

Honda SRS Airbag von Takata
Image: picture-alliance/dpa/F. Robichon

Takata's decision to double the recall of potentially deadly air bags to nearly 34 million vehicles makes it the largest automotive recall in US history.

The company's admission that the airbags are defective comes after a year of sparring with the US government over the cause of the problem and the number of vehicles that should be recalled.

The recall involves driver and passenger-side air bag inflators in vehicles made by 11 automakers, the US Department of Transportation, the National Highway Traffic Safety Administration (NHTSA) and Takata reports.

Faulty inflators

At issue are malfunctioning inflators in Takata airbags which cause them to explode, spraying metal fragments into the passenger compartment. Regulators linked six deaths worldwide to the problem.

The latest recall expands on the 16.6 million vehicles called back for repairs for the same issue in previous regional and national recalls.

The US announcement does not include millions of other vehicles recalled in other countries over the same problem.

A Takata spokesman was unable to give a global recall tally, and said the firm was discussing the figure with its automaker clients.

Mark Rosekind, head of the NHTSA, said automakers that installed the Takata airbags in their cars and trucks would now have to announce specific vehicle recalls. Those automakers are Honda, Toyota, General Motors, BMW and Ford, among others.

The NHTSA began fining the company $14,000 (12,5000 euros) a day in February this year to pressure it to supply documentation on internal probes into airbag issues dating back more than a decade.

Rosekind said the accumulated penalties have topped $1 million, but the daily fine has been suspended since Takata "stepped up" its efforts to cooperate with NHTSA investigators.

Looming penalties

The company could still face more civil and criminal fines from various government agencies, depending on results of ongoing regulatory probes and its cooperation with investigators.

A number of class-action lawsuits have been initiated since last year that could possibly lead to substantial damage payments.

Reacting to the news, Takata shares nosedived 12 percent before recovering slightly to end Wednesday's trading session in Tokyo down 10.21 percent. The stock has lost more than half its value since the start of last year.

Takata reported a net loss of $244 million for the fiscal year, but said it expects to return to profit this financial year despite the recalls.

sri/hg (AP, AFP, Reuters)

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