[box type=”shadow” align=”aligncenter” ]Welcome to the Takata Airbag Recall News center at Legal Reader. Here, we provide comprehensive and up-to-date coverage of the Takata airbag recall and Takata airbag lawsuits. To see if your car was affected by the Takata airbag recall, use this link to the United States Department of Transportation Takata Recall Center.[/box]
Inspector General’s Report, New Takata Lawsuit Lowlight Rough Week for NHTSA
The Detroit News is reporting that the Department of Transportation’s Office of the Inspector General will issue a scathing 42-page report on Monday citing the systemic failures of the National Highway Transportation Safety Administration (NHTSA), the nation’s top auto regulator. The report comes just two weeks after the Transportation Department also issued a report regarding the criminality of General Motors’ executives handling of the ignition-switch defect. While that report blamed GM entirely for deceiving regulators, it also highlighted lax oversight from the NHTSA, and especially failures by the NHTSA’s Office of Defects Investigation (ODI). The most recent report makes 17 separate recommendations for systematic improvement. Among others, U.S. Auditor Calvin L. Scovel III recommended improved training procedures for employees and an improved system for handling consumer complaints. The report was extremely critical of the way ODI chooses to pursue complaints. The report cites that ODI ignores 90 percent of consumer complaints, only having one screener to view over 78,000 consumer complaints, or 330 per day, which only constitutes half of that employee’s workday. Scovel’s report also notes the arbitrary nature of ODI’s decision to investigate and the absence of any significant documentation system.
The report was issued a year ago, shortly after General Motors announced the recall of 2.6 million vehicles over the ignition-switch defect. It also noted that the NHTSA knew for years about the problem of Takata airbags in Honda models having an issue with a defect in the inflation mechanism, causing rapid deployment. The NHTSA did not begin investigating the Takata issue until the fall of 2014. Takata remained defiant for months after the investigation was launched, until eventually agreeing to cooperate with the agency in May. This comes as a lawsuit filed this week in Los Angeles Superior Court revealed that an 8th person, 26 year-old Jewell Brangman, was killed last September when an airbag exploded in her rented 2001 Honda Civic, sending shrapnel into the cabin. The vehicle was purchased at an auction by the renter, and Honda mailed a recall notice to the current owner in June of 2013, but the repair was not made. When the NHTSA and Takata announced the recall last month, they claimed that 33.8 airbags will need to be recalled affecting an estimated 20 million vehicles worldwide, predominately Hondas although several other makers are also affected. The NHTSA has also received criticism for its shaky initial rollout of the recall; however, both NHTSA Administrator, Michael Rosekind, and Secretary of Transportation Anthony Foxx have called it the most complicated recall in automotive history.
The report and the systemic problems within the NHTSA have given Rosekind plenty to deal with as the recently appointed agency head. Much of the problems the report cites have occurred long before Rosekind took over last December, as former chief, David Strickland left a year prior to work as a lobbyist for automakers. Interim Administrator David Friedman was retained upon Rosekind’s appointment, and remains the Deputy Administrator. Both have been criticized for letting the current avalanche of problems metastasize. Rosekind has promised a more proactive and aggressive agency, including fining Takata $14,000 per day, totaling $1.2 million until they finally came to the table in May. Rosekind also asked Congress in February to triple the NHTSA budget, a call that President Obama is also asking Congress to heed. Specifically, the agency wants around 440 workers in the ODI; currently the department has 60. Rosekind has enthusiastically agreed to implement all of the Scovel’s recommendations with a deadline of June of 2016. Both Scovel and Rosekind will testify before the Senate Committee on Commerce Science and Transportation on Tuesday, updating the committee on the Takata recall.
Detroit News – David Shepardson
New York Times – Danielle Ivory
San Jose Mercury News – Tom Krisher
Takata Recall Vehicle Count Overestimated
June 14, 2015
According to research conducted by Reuters, the Takata airbag recall last month, estimated to be the largest in automotive history may involve less than half of the originally-thought 34 million vehicles. Reuters analyzed various filings by automakers to the National Highway Transportation Safety Administration (NHTSA), and has confirmed the actual number to be 16.2 million vehicles, although the recall could affect over 30 million Takata airbags in total. Originally, the number was thought to be one of every eight cars on the road, but the number appears to be closer to one out of every 16. The NHTSA admitted on Wednesday, that it could not confirm the actual number as of then, however, NHTSA administrator, Mark Rosekind, has previously called the Takata recall the “largest and most complicated product recall in U.S. history.” Reuters estimated the number of vehicles could jump to over 20 million, contingent on additional filings. On Friday, Honda linked another death due to the airbags, which have been documented as “exploding” upon impact, potentially sending shrapnel into the cabin. If confirmed, the Honda death would be the seventh attributed to the airbag problem.
The re-estimation of the total number of vehicles means that other auto recalls have been larger in size, most notably the 1981 Ford recall of 21 million vehicles over defective parking gears, and a 2009 Ford recall of 17.5 million vehicles to fix a cruise-control component. Unlike these recalls, however, Takata involves at least 10 different vehicle manufacturers and consolidating information from the various companies has proven to be difficult. The numerical confusion stems from vehicles being double-counted or, as in one reported case, eight separate occasions due to having as many affected airbags in a single vehicle. Due to the planned phasing of repairs because of a shortage of replacement parts, some vehicle owners may have to return to the dealership for repairs two times or more. To complicate matters, neither Takata, nor the NHTSA knows for sure the cause of the airbag defect. There are indications that increased humidity corrodes the inflators and certain models have been shown to be more prone to the defect, therefore these locations and models have been given priority, but experts cannot be sure that the replacement parts are 100 percent safe either, which Rosekind admitted, however adding that they aren’t completely safe, but “they’re safer.”
While the initial 34 million vehicle total was only an estimate, it is surprising that two numbers are so disparate. According to NHTSA spokesman Gordon Trowbridge, “We have not yet gone through and said, okay, what is the number of vehicles. Some issues have to be worked out before we come to that final number.” Although the NHTSA runs a VIN number lookup site for recalls, the process has been delayed for the Takata recall according to the website, for at least a few weeks until the automakers complete their lists. Despite Rosekind’s pleas for understanding due to the complexity of the recall, critics like The Car Connection’s Richard Read are not as forgiving. In a recent article posted in the Washington Post, Read asks, “The real issue is: who’s keeping track of the numbers? Who’s watching repair stats to ensure that cars are being fixed in a timely manner? When all the dust has settled, who’s going to be able to say that 75 percent or 90 percent or 50 percent of the vehicles affected by a given recall were ultimately serviced?”
Those are fair questions to ask, as many drivers cannot definitively know yet if they are currently operating vehicles that could potentially be deadly at any given moment. Moreover, vehicle owners cannot be assured that the vehicle’s repair will definitively solve the airbag defect. At the same time, Rosekind has worked tirelessly since taking over the NHTSA in December, and has taken dramatic steps on a multitude of issues during what has been one of the most turbulent times in automotive history. If, however, progress is not made in sorting out the complicated recall in the next few weeks, the agency should be justifiably questioned as to the delay and lack of progress.
Reuters – Paul Lienert
Washington Post/The Car Connection – Richard Read
DOT, NHTSA announce Aggressive Changes due to Recalls
June 9, 2015
Automakers have now been warned. Both the U.S. Department of Transportation (DOT) and the National Highway Transportation Safety Administration (NHTSA), the automotive industry’s top two regulatory bodies, have announced significant changes in their oversight procedures. In a series of internal memos released on June 5th, Secretary of Transportation Anthony Foxx announced the release of two separate reports detailing long-awaited improvements to the NHTSA investigative process. The first report created at Foxx’s request, titled “NHTSA’s Path Forward,” is a results-summary of a year-long review of the NHTSA’s handling of the GM ignition switch recall investigation. The other report, “Workforce Assessment: The Future of NHTSA’s Defects Investigations,” is based on a 2011 recommendation from the DOT’s inspector general’s office, analyzing the staffing and funding needs of the NHTSA’s Office of Defects Investigation (ODI). The latter report has recommended a large temporary increase in resources to help conduct the GM investigation more thoroughly, as well as follow President Obama’s recommendation to nearly triple the NHTSA’s budget in the coming years. Additionally, Secretary Foxx has formed a three-person Safety Systems Team (SST) of external experts who will spend the upcoming year advising the NHTSA on implementing changes contained in the reports. The NHTSA has also formed an internal Risk Control Innovations program, which will focus on intra-agency coordination focused on emerging safety risks. The most fundamentally surprising announcement, however, is that both the DOT and NHTSA will be working with personal injury lawyers, who often document defects and safety risks long before regulators do.
Although the dual reports place most of the blame for the GM ignition switch defect on the automaker itself, both acknowledge that the NHTSA ignored many clues pointing to the defect as well as not using their full authority for over a decade prior to last year’s massive recall. NHTSA Administrator, Mark Rosekind, who has been at the helm since last December, has strongly supported efforts to become more proactive, and has already taken many steps indicating this more aggressive approach. “Our obligation to save lives and prevent injuries must include sober self-examination, and when we find weaknesses, we have to fix them,” said Rosekind. “These reports outline how NHTSA is already improving its systems for identifying and addressing vehicle safety defects, and offers options for building the workforce it needs to meet its obligations to the traveling public.” In his brief tenure, Rosekind has already brought momentous change to the agency, including bringing airbag maker, Takata, back to the table last month, instituting the largest recall in automotive history with over 34 million total vehicles affected. Rosekind is also working to correct a long-lamented failure revolving around a Fiat-Chrysler investigation into exploding gas tanks on specific Jeep models and its NHTSA-approved makeshift solution. Rosekind will be meeting with Fiat-Chrysler executives on July 2nd to discuss the effectiveness of the company’s recall of over 10 million vehicles. Much of Rosekind’s efforts, although desiring to be proactive, are an effort to clean up the mess left by former NHTSA head, David Strickland, who left in December, 2013 to become a lobbyist for the automotive industry.
Secretary Foxx’s announcement of outside help should work to provide Rosekind additional expertise to navigate the seemingly overwhelming array of issues the NHTSA is facing. The SST panel will consist of Dr. Joseph Kolly, director of the Office of Research and Engineering at the National Transportation Safety Board, Dr. J. Victor Lebacqz, former aeronautical researcher for NSA, the same agency for which Rosekind worked prior to heading the NHTSA, and former astronaut and University of Michigan professor, James P. Bagian, M.D. The coordination with personal injury attorneys should also help provide the agency with valuable information regarding defects much sooner. As Consumer Affairs editor, James R. Hood notes, “lawyers who specialize in auto accidents and product liability already have their own informal, but highly sophisticated networks that share data the attorneys collect as they build evidence against automakers.” The largest help for the agency, however, will be an increase in funding. It will be up to congress whether or not to allow anywhere close to the three-fold increase recommended by the inspector general and President Obama. Clarence Ditlow, executive director of the non-profit Center for Auto Safety responded to the report saying, “The assessment calls for a new paradigm in funding and resources to match the dramatic increase in the number of vehicles on the road and the increasing sophisticated technology in vehicles.”
Consumer Affairs – James R. Hood
New York Times – Bill Vlasic and Rebecca R. Ruiz
Takata House Hearing is a Head-Scratcher
June 4, 2015
An executive for the embattled airbag manufacturer, Takata, was grilled in Congress on Tuesday during a hearing by the House Commerce, Manufacturing and Trade Subcommittee. Coming off of last month’s addition of 16 million vehicles, creating the largest recall in auto history, lawmakers repeatedly challenged the company’s use of ammonium nitrate in the propellant of the airbag’s inflators. The propellant becomes unstable after time, causing the airbags to deploy, potentially spraying shrapnel into the vehicle’s cabin. The exploding airbags have been attributed to at least 6 deaths and over 100 injuries to date. Takata has been using the compound in its airbags since the early 2000s. Although the exact cause of the violent deployment is not fully known, it appears that moisture and humidity accelerate the problem. Although company representatives said they would try to phase out the use of ammonium nitrate, they said that for now, that Takata would continue to use it as the propellant to the disbelief of many at the hearing.
Executive vice-president for Takata, Kevin Kennedy, was apologetic for the deaths and injuries attributed to the defect but nonetheless fended off the interrogation with a similar posture the company took in the months prior to agreeing to work with regulators in May. Kennedy said that the company would alter the shape of the ammonium nitrate wafers used in the propellant but would not alter its chemical composition. Kennedy did ambiguously say that the company’s use of ammonium nitrate would “go down significantly.” When asked why the company would continue the compound’s use at all, Kennedy replied, “In a vehicle, it’s not as easy as changing the color of the car.” Also testifying at the hearing was Mitch Bainwol, president of the trade group, the Alliance of Automobile Manufacturers. Bainwol said, “There is an understanding that the supplier will provide a product, and part of that is making sure that a controlled explosion is a controlled explosion.” Speaking for many who attended the hearing, Representative Michael Burgess (R-TX) reacted immediately afterward, saying “I couldn’t believe what they were telling me. They are still making an airbag with ammonium nitrate as a propellant. And they’re putting that in replacement vehicles.”
Kennedy’s explanations for continuing the use of ammonium nitrate baffled lawmakers time and again. He cited the sheer number of replacement airbags required to be onerous. Takata is manufacturing replacement kits at a rate of 700,000 per month, which is double the number that the company was producing in December, with a goal of reaching 1 million per month by September. Takata is also ordering about half of the replacement airbag kits from competitors, who use a different substance in their inflators. Kennedy said much of the problem also lies in the difficulty of locating the actual root-cause of the defect, stating “You can put two inflators in that situation, one is fine and one is not,” to which Burgess replied, It’s almost like there should be a warning label on these vehicles saying ‘this is not safe.’” Kennedy also said that using ammonium nitrate with a moisture-reducing agent should help limit the problem, but he also said that the company isn’t using it in all of its inflators yet. Burgess responded, “You’re not providing me much reassurance with that answer.” Illinois Democrat, Jan Schakowsky asked, “Why would I buy a car that has a potentially dangerous airbag? I’m not understanding.”
Lawmakers also questioned the head of the National Highway Transportation Safety Administration (NHTSA), Mark Rosekind. Although many lawmakers have lauded Rosekind’s more aggressive stance towards automakers than his predecessors since taking over in December, some have questioned his handling of Takata. Representative Fred Upton, (R-MI) told Rosekind, “The messaging around these airbag recalls has been tortured at best.” Rosekind and Secretary of Transportation, Anthony Foxx have both called the Takata recall the most complicated in auto history. Rosekind, who has already levied the maximum $35 million fine against the company and he expressed his desire for Congress to raise the maximum to $300 million as well. He also expressed his hopes that President Obama is successful in his intent to triple the NHTSA budget in the next few years to increase the agency’s staffing. When questioned by Burgess about the NHTSA’s delays in providing consumer information as to which vehicles are affected, Rosekind reiterated the complexity of the recall and asked for patience. Rosekind is planning a public meeting with major automakers in the fall to help create a clearer timetable. He also urged drivers to check the website safercar.gov on a weekly basis to keep abreast of the latest additions.
Detroit Free Press – Todd Spangler
New York Times – Aaron M. Kessler and Hiroko Tabuchi
NPR – Jason Margolis
Department of Justice: General Motors committed Criminal Wrongdoing
May 23, 2015
The New York Times reported late Friday that U.S. Department of Justice (DOJ) investigators found General Motors guilty of criminal wrongdoing by delaying information regarding a defect that has been attributed to at least 104 deaths. Sources within the DOJ are apparently in settlement discussions with the automaker, and some are estimating the aftermath to result in the largest penalty in U.S. auto history, in excess of the $1.2 billion that Toyota agreed to last year. The recall, like many other automakers in recent years, regarded a deadly error in the ignition switches of roughly 2.6 million GM vehicles. The potentially-record setting fine comes on top of an estimated $3 billion cost of fixing the defects and a $600 million victims’ compensation fund. Settlement negotiations are ongoing, and expected to be resolved by the end of the summer. The company has agreed to cooperate with the investigation, and it is possible the amount of the fine may be reduced due to good-faith negotiations. Depending on the terms of the settlement, the DOJ may require the company to plead guilty, which would give General Motors as a company the distinction of being a known felon. GM CEO, Mary Barra fired 15 employees, including company attorneys and implicated engineer, Ray DeGiorgio, as a result of the investigation.
As Richmond School of Law professor, Carol Tobias observes, “Even though GM may be cooperating more than Toyota, GM’s underlying conduct may be worse than Toyota’s and, thus, support a larger settlement.” A prior independent investigation by U.S. Attorney Anton Valukas discovered that some company engineers knew as early as 2003. Texas accident attorney Bob Hilliard, who specializes in GM recall cases notes, “It has seemed clear for some time that crimes were likely committed. A careful review of the documents supports the conclusion that GM’s conduct was surely criminal and that there was a cover-up after the fact.” The automaker has already paid a maximum $35 million dollar fine to the National Highway Transportation Safety Administration (NHTSA) last year for its failure to report the defect. Investigators are also looking into whether or not the lack of disclosure during the company’s 2009 bankruptcy proceedings constitutes fraud. GM, beyond acknowledgement of its cooperation, has declined to comment due to the sensitivity of the ongoing settlement negotiations.
The findings of the DOJ, along with airbag maker Takata’s record-breaking recall earlier this week, highlight both the increasingly aggressive nature of auto regulators as well as the overwhelming problems currently facing the industry. The DOJ has been coordinating the dual investigations, with U.S. attorney Preet Bharara’s Manhattan office running the GM investigation and the U.S. attorney’s office in Detroit taking over the Takata investigation. Bharara’s office had been the custodian of the Takata probe until this week’s addition of 16 million airbags to the recall and agreement to cooperate with regulators. The auto industry has been hit hard by deadly defects and mass recalls over the past few years highlighted by the GM, Takata, and Toyota recalls, but also involving most major automakers, including Honda, Ford, and Fiat-Chrysler, among others.
Detroit Free Press – Greg Gardner, Alisa Priddle, and Brent Snavely
New York Times – Danielle Ivory, Ben Protess, and Bill Vlasic
Are Recall efforts enough to solve Takata Airbag Problem?
May 22, 2015
As federal agencies and auto manufacturers scramble to implement the massive Takata airbag recall involving an estimated 34 million vehicles, many doubt if any solution will be sufficient for a problem of such grand scale. Although the precise cause of the defect remains unknown to date, it is believed that the inflator pumps change over time creating what the manufacturer calls, “over-aggressive combustion,” causing the airbags to essentially explode sending shrapnel into the vehicle’s occupants. To-date, there have been 6 fatalities and over 100 injuries that have been attributed to the defect. 14 percent of the U.S.’s estimated 250 million vehicles contain Takata airbags, the majority of them contained in Honda models from 2000-2011, although several other automakers use them as well. Due to the scope of the problem, Transportation Secretary, Anthony Foxx calls it, “probably the most complex consumer safety recall in U.S. history.” Regardless, Foxx and National Highway Transportation Safety Administration (NHTSA) administrator, Mark Rosekind, have vowed to continue until every last airbag is replaced. Takata Chairman Shigehisa Takata agreed, despite months of wrangling with the NHTSA over the recall, calling the recall efforts “a clear path forward to advancing safety and restoring the trust of auto makers and the driving public.”
Even though the resolve of the agencies and Takata sounds encouraging, several experts question whether or not a recall of this magnitude can be effectively implemented. Automakers have begun research into which vehicles contain Takata airbags and the NHTSA has set up a vehicle identification number search engine on its website at vinrcl.safercar.gov/vin. Rosekind acknowledged, however, that the recall will take months, if not years to implement. He also said that the installation of replacement airbags will be prioritized by geographic region, as increased humidity appears to cause the defect with more frequency, as well as by vehicle makes and models with the highest degree of defect rates. The NHTSA also notes that there aren’t enough replacement airbags for all 34 million vehicles at the time, thus causing additional delays and a staggered timeline for repairs. Both Sweden’s Autoliv and Japan’s Daicel, two of Takata’s major rivals, have both planned to ramp up airbag production in order to fill the shortage.
While happy that Takata is finally working with regulators, Senator Bill Nelson (D-FL) summarized many people’s fears, saying “Folks shouldn’t have to drive around wondering if their air bag is going to explode in their face.” Senator Richard Blumenthal (D-CT) suggested a need for “a remedy that removes the serious risk to people who are now driving cars with these airbags.”Although several manufacturers have agreed to give affected drivers’ loaner vehicles on a case-by-case basis, Consumers for Auto Reliability and Safety founder Rosemary Shahan believes that isn’t enough. Shahan said, “Every consumer that’s part of this mess should have the right to demand a rental car until their car is made safe.” Shahan continued, “It’s not like a toaster; they can’t just return it to the store. Most people have to drive, because they have to get to work. What are they supposed to do?”
Even if the logistics of the recall go better than anticipated, there is no consensus that the replacement airbags will not encounter the same problem. Admitting that he couldn’t guarantee that Takata’s replacement airbags would be completely safe, Rosekind said, “but we know they are safer.” This will likely not help to reduce the uneasiness among drivers in affected vehicles, with or without replacement airbags. Center for Auto Safety executive director Clarence DItlow notes, however, that the problem could have been addressed years earlier had the NHTSA not mistakenly identified the problem as a design flaw and not due to using the wrong chemical formula for the airbag’s propellant. Ditlow said that, “NHTSA didn’t pay enough attention to Takata.” The recall will put Rosekind’s proactive strategy to the test for an organization that has been accused of lax oversight that led to the massive ignition switch recall involving General Motors, Honda, and Fiat-Chrysler, among others as well as the massive Jeep recall over exploding gas tanks that led to several well-publicized deaths. The recall may be the largest challenge that the NHTSA and Rosekind may have ever faced, but as Senator Blumenthal notes, “This kind of extraordinary recall requires extraordinary remedies.”
Bloomberg Business – Craig Trudell
Los Angeles Times – Jerry Hirsch and Jim Puzzanghera
New York Times – Aaron M. Kessler
Washington Post – Drew Harwell
Takata Recalls 16 million additional Airbags, creating the Largest Recall in Auto History
May 19, 2015
Japanese airbag manufacturer, Takata, announced Tuesday that the company is increasing the number of recalled airbags from 18 million to 34 million. The announcement makes this the largest recall ever in the automotive industry, easily surpassing Ford’s 21 million vehicles in 1980 due to a transmission problem. The recall is related to a defect in the airbag’s inflator that can cause it to explode; shooting shrapnel that has been attributed to at least 5 deaths. Most of the recalled airbags are installed in Honda vehicles from 2000-2011, although other years and auto brands also contain the Takata airbags. In addition to Honda, several automakers are currently researching and compiling information in order to specify which vehicles are affected.
Takata’s announcement marks a change of direction for the company, which has fought to limit the scope of the recall, a feat it successfully accomplished as late as last December. Incoming National Highway Transportation Safety Administration (NHTSA) chief, Michael Rosekind, quickly changed the agency’s posture however, pushing Takata to expand the recall and fining the manufacturer $14,000 per day beginning in February totaling $1.2 million to date. The NHTSA issued a Consent Order in which the company formally agreed to cooperate in additional probes and future regulatory action. The NHTSA will begin the process of setting the parameters of the solution, and will likely base its prioritization upon risk factors like the humidity level in certain geographic areas, which has increased the likelihood of the defect, as well as by make and model. The agency has also, at least temporarily, suspended the daily fines. Takata CEO Shigehisa Takada called the agreement “a clear path forward to advancing safety and restoring the trust of automakers and the driving public.”
Rosekind, who last month negotiated a 60,000 vehicle voluntary preventative recall from Fiat-Chrysler regarding a previous ignition switch solution as well as 4,000 potentially defective airbags, appears to be making good on his promise to direct a more proactive agency. Calling the recall “a major step forward for public safety,” Transportation Secretary Anthony Foxx vowed not to stop until every airbag is replaced. Unfortunately, however, Takada, Rosekind, and Foxx all admit that the cause of the airbag defect is still uncertain; leading some to wonder if the replacement parts will not be laden with the same issue. Although acknowledging he didn’t know the cause, Rosekind said Tuesday, “When are we going to find out? We don’t know. We can’t wait and risk the safety of the American people before we move forward.” He also said that he did not know if the replacement airbags were completely safe, he said, “But we know they are safer.”
CNN Money – Chris Isidore and Rene Marsh
Mlive.com – Emily Lawler
Wall Street Journal – Mike Spector and Gautham Nagesh
Honda Reported a Net Annual Loss of 8.9%
May 7, 2015
Honda, Japan’s number three automaker, reported a net annual loss of 8.9% closing its year at 522.7B yen ($4.4B). The company attributes the loss to increasing recall costs from exploding airbags. The airbags have been linked to five deaths. Despite the losses, sales rose 6.8% (12.6 trillion yen).
The losses were expected and Honda had revised profit forecasts twice before the final report. The airbag scandal at Takata, in addition to falling product demand both in Japan and China (the world’s largest automobile market) were a double whammy for Honda. Sadly, the benefits Honda saw from the sharp decline in the yen had been producing for any major Japanese exporters were eaten up by the loss.
A statement from Honda confirmed the losses as “due primarily to an increase in selling, general and administrative… expenses including quality-related expenses and a decline in automobile unit sales in Japan. This was despite profit-increasing factors such as strong sales in Asia and favorable currency effects associated with depreciation of the Japanese yen.”
It’s not just Honda feeling the pain, though. The Takata crisis has also impacted Honda’s biggest domestic competitors, Toyota and Nissan as well as ten other major worldwide automakers. Toyota and Nissan have yet to release any financial reports.
Honda is expecting a good year in 2015. Its current forecast shows a net profit of 525B yen from sales of 14.5 trillion yen. Honda has also recently adopted new accounting standards.
The recall had a deep impact on consumers, too. Nearly twenty million vehicles are under recall at the moment. The Takata airbags might deploy with such extra explosive power that they would pepper occupants with potentially fatal shrapnel. In other words, from airbag to Claymore mine at the snap of the fingers.
Suits have already been filed against Takata, some naming Honda as part of the manufacturing chain. Earlier cases have been settled, but the overall opinion is that it was “hush money.” As no settlement terms can be released, some plaintiffs are finding it difficult to obtain valuable information that would help them pursue their own claims.
Takata Air Bag Litigation GM Ignition Switch MDL News
April 29, 2015
A handful of class action lawsuits were recently filed against airbag manufacturer Takata Corporation and the manufacturers of vehicles containing defective Takata airbags — at least two in Florida, two in California, and one in Michigan. Several other individual cases are pending in courts across the Nation. The class action complaint in one of the Florida cases details numerous severe, even lethal, injuries sustained by owners and drivers of vehicles when the airbags in their cars exploded, shooting deadly shrapnel at the vehicle occupants. The complaint notes that these explosions occurred even during relatively minor accidents. Plaintiffs claim that Takata and vehicle manufacturers, particularly Honda, knew that the airbags were defective and moved slowly and selectively in notifying regulators and consumers. Plaintiffs have also asked that expedited discovery be permitted in the case, citing to numerous reports indicating the danger to consumers. The Florida complaint, motion for expedited discovery, and a declaration in support thereof contain specific information about the models and years of vehicles which contained the Takata airbags, as well as reports about accidents, injuries, and the danger posed to consumers.
In the GM ignition switch MDL (In re: General Motors LLC Ignition Switch Litigation, 1:14-mc-0543, Southern District of New York) pending before U.S. District Judge Jesse M. Furman, a date has been set for the first of the personal injury and wrongful death bellwether trials to begin — January 2016.
Latest Fiat-Chrysler Recalls may be a positive sign for the industry
April 28, 2015
Despite what appears to be another grim proclamation by Fiat-Chrysler, that the company is issuing recalls on another roughly 60,000 vehicles last week, this may be a sign that the company, and possibly the entire industry is moving in a more proactive direction. The voluntary recalls follow a tough beginning to 2015 for the company, who was the recipient of what can be described as a courtroom beat-down and $150 million judgment against them in March in the graphic lawsuit surrounding the death of 4 year-old Remi Walden, who was burnt alive after a rear-end collision combusted the gas tank of his aunt’s 1999 Jeep Grand Cherokee. Beyond the financial price, the accident happened in the midst of an ongoing National Highway Transportation Safety Association (NHTSA) investigation into the placement of the gas tanks on several late-model Jeep Cherokees. Despite the Walden accident and several other incidents, The NHTSA allowed what has been described as a makeshift solution to the problem, installing a hitch on the rear bumper to allow for more space between the point of rear collision and the gas tank. The solution was agreed to in principal in 2013, under former NHTSA chief, David Strickland, and the gas tank solution was formally accepted in January, 2014 under interim administrator, David Friedman. Strickland now serves as a lobbyist for the auto industry while Friedman has remained as deputy administrator for the NHTSA.
The recalls include 43,874 model-year 2006 Jeep Liberty and Wrangler SUVs and Dodge Viper cars equipped with manual transmissions in the U.S. that were produced between Feb. 15, 2005, and Sept. 14, 2006, along with 2015 Ram ProMaster City cargo and passenger vans in North America. The primary recall involves a permanent fix replacing a temporary solution for the massive ignition switch issue that has plagued the industry for these particular vehicles. The voluntary recall involves replacing clutch ignition interlock switches for roughly 58,000 cars and SUVs with manual transmissions worldwide. This repair replaces the temporary solution, which involved replacing a wire in the switches; however, the wire is capable of breaking. In addition to the ignition switch recall, the company also issued recalls requiring the removal of a section of tape on the side-curtain airbags in about 4000 vans. The tape had been shown in testing to occasionally prevent components from deploying, as it had been left on the vehicles during installation
The noteworthy aspect of these recalls beyond their practical purpose is that both were instituted without any reports of injuries or deaths. This may be in reaction to newly appointed administrator, Michael Rosekind’s, statement earlier in the month that he intends to gear the agency and the industry in a more proactive direction. He has threatened to reopen the Jeep fuel tank investigation if he is not satisfied with the pace and efficacy of the hitch solution. In addition to more aggressive dealings with other automotive company’s recall issues, his stance is a departure from the previous tenures, which were marked with allegations of lax oversight and cronyism. Rosekind, who took over as administrator in December, 2014 has announced his vision of a “culture of auto safety” to model that of the airline industry and their relatively outstanding safety record. Given the gravity of the industry’s problems, including the General Motors, Honda, Takata air bag, among other major recalls, as well as Fiat-Chrysler’s myriad issues, Rosekind’s aggressive approach is probably a necessary shift. If anything, these most recent recalls indicate a proactive direction.
Law360 – Kurt Orzeck
Legal Reader – Jay W. Belle Isle
The Detroit News – David Shepardson
Is Rosekind the Right Fit for NHTSA’s Problems?
April 16, 2015
Dr. Mark Rosekind is thought to be the world’s foremost expert on human fatigue. As a pioneering researcher and a former NASA and NTSB administrator, his publications have been extremely influential in the field and he has received several major public and private sector service awards. So, it shouldn’t be surprising that President Obama nominated him last November to be the head of the National Highway Transportation Safety Administration (NHTSA), the nation’s top auto-regulator. Taking over in December, Rosekind became the first formal Administrator of the agency since former head, David Strickland, left to become a lobbyist for the auto industry nearly a year prior. In the interim, a wave of safety recalls, major lawsuits, as well as allegations of cronyism and lax oversight flooded the agency. Given the laundry-list of issues before even walking through the door, it will likely take a tireless effort to get the situation under grasp.
Four months into his term, Rosekind has already faced scrutiny over several issues, stemming from crises that metastasized during Strickland’s and former interim director and current deputy director, David Friedman’s watch. In addition to the well-chronicled General Motors and Honda ignition-switch recall, there has been the continued spat with Takata over a historic airbag recall, allegations of cronyism involving the continued use of the controversial ET-Plus guardrail, and most notably, how the agency’s investigation into Jeep’s exploding gas tank problem and the makeshift solution that was agreed upon in 2013, somehow missed recalling the 1999 Jeep Grand Cherokee model whose exploding gas tank burnt 4 year-old Remi Walden to death. The latter resulted in a $150 million judgment to the family against Fiat-Chrysler earlier this month. In a “damned if you do, damned if you don’t” scenario, some such as auto-blogger, Graeme Roberts, are even complaining about Rosekind’s excessive amount of recalls.
In the wake of these looming problems, Rosekind has responded much more aggressively than his predecessors. Not satisfied with the pace of the proposed gas tank solution repairs, he fired a warning shot to Fiat-Chrysler that the agency is considering re-opening the ill-fated Jeep investigation last week. In addition, Rosekind has fined Takata $14,000 per day since February 22nd for their lack of cooperation in the airbag recall. He has also planned two major safety meetings in the coming months focusing on improving both auto safety and recall management. Although insisting that these meetings are not a reaction to any particular event, he has scheduled a Recall Workshop on April 28th, and he is finalizing plans for a major auto-safety summit, which will include the CEOs of the big-3 automakers among others. The workshop, entitled “Retooling Recalls,” will be a collaboration of NHTSA officials, automakers, safety-experts, and suppliers, aimed at finding ways to get a higher percentage of recalled vehicles serviced. The summit, yet to be formalized but tentatively planned for June, will be a collaborative effort between the NHTSA and the CEO’s of the Big-3 and other automakers.
From the onset, it would appear that Rosekind is not trying to cozy up to automakers, and at least rhetorically, he has demonstrated his intent to promote a “culture of auto safety.” At the International Auto Show last week in New York, he said he would like to model the agency more similarly to the airline industry, more focused on being proactive than reactive. While it would appear that Rosekind is sincere about his stance, and his elevated status prior to becoming NHTSA Administrator may put him above the “revolving door” that has occurred between agency employees and the auto industry, measurable results are expected. Will increased tenure at the post cause a level of comfort that has seemed to consume the agency while causes of the current crises were accumulating, or is that no longer an option? Recalls will have to be precise, fixes will have to be performed quicker, guardrails will have to be agreed upon, and Rosekind will have to find a way to bring Takata to the table. If anything, he has set himself up to be the man for the job; the question is, will he be the man for the job? Or, will the myriad issues facing the automotive industry prove to be too fatiguing even for him?
Automotive News – Ryan Beene
The Detroit News – David Shepardson
Just auto – Grahame Roberts
Fiat’s Captain Going Down with the Jeep? Not According to His Deposition
March 26, 2015
In what can only be called a crass example of abdicating responsibility, Fiat’s CEO Sergio Marchionne says he has “no way of knowing” if the company’s Jeep product line is safe. Funny, I was under the impression that there were engineers and safety committees who handle these issues and who report to the CEO, via management channels.
Marchionne only answers that he is “not an engineer.” This isn’t going over very well with the family of 4-year-old Remi Walden who died in a fiery rear-end collision in March 2012. It likely won’t go over well with the jurors who got to see the recording of Marchionne’s deposition earlier this week as the trial began in Georgia.
It hasn’t been a good time to be an automaker lately. Last year saw record numbers of vehicle recalls and public investigations, including the defective ignition switches in General Motors vehicles and rupture-prone air bags made by Takata Corp. of Japan. Now, we add rear-mounted gas tanks on Jeeps made by Fiat, now called FCA US LLC. Federal regulators have linked 51 deaths, including Remi Walden’s, to gas tanks mounted behind the rear axle on older model Jeeps. A government analysis showed Fiat’s Jeeps performing worse than similar vehicles in low- and moderate-speed collisions.
Fiat initially resisted any recall demands from the National Highway Traffic Safety Administration (NHTSA) in 2013. However, Marchionne finally agreed to a “customer satisfaction campaign” focused on inspecting the vehicles in question and a limited recall. The company also offered to install trailer hitches as additional protection in the case of a rear-end collision. However, NHTSA said that it’s continuing to receive complaints from Jeep owners who are having difficulties getting the necessary repairs despite a Fiat spokesman’s assurance that the company has made over 5 million “outreach attempts” via email and telephone to those affected.
The Walden family’s Jeep was on the list of those vehicles needing such repairs.
Honestly, I don’t believe this trial will go well for Fiat. Marchionne’s “not my problem” attitude during his deposition is going to sour juror’s opinions of Fiat. The leader of any organization has an inherent duty to know what his organization is doing. We can forgive Marchionne for not knowing the name of Fiat’s paper clip supplier, but not knowing the safety of its products? No, not going to happen. Marchionne should have his finance team prepare to write some checks.
The Wall Street Journal – Mike Spector and Christina Rogers
The Wall Street Journal – Christina Rogers
Air Bag Recall Update: Honda Expands List of Vehicles
December 27, 2014
Today, Honda agreed to expand its Takata air bag recall. To be sure, this air bag recall has affected some 8 million cars in the United States, totaling 20 million worldwide, causing airbags to send plastic and metal shrapnel into the vehicle cabin on deployment. At least five deaths have so far been attributed to these defective Takata airbags, and many more have been injured.
Here is an excerpt from a Reuters article on the Honda announcement:
“(Reuters) – Honda Motor Co (7267.T) said on Monday it was expanding its recall of cars due to defective Takata Corp (7312.T) air bags to a nationwide campaign.
The recall affects 2001-2011 Honda and Acura vehicles, the company said in a statement.
An earlier regional recall had been limited to areas of high humidity, which could cause the air bags’ inflator to rupture and send metal shards flying into the vehicle. Including the earlier recall, a total of 5.4 million vehicles will be covered, Honda said.
(Reporting by Eric Beech; Editing by Susan Heavey)”
More information on the air bag recall can be found by simply typing those terms into the Legal Reader search bar. Here is a bit more detail from the National Highway Traffic Safety Administration:
“WASHINGTON, D.C. – The National Highway Traffic Safety Administration urges owners of certain Toyota, Honda, Mazda, BMW, Nissan, Mitsubishi, Subaru, Chrysler, Ford and General Motors vehicles to act immediately on [air bag recall] notices to replace defective Takata airbags. Over seven million vehicles are involved in these recalls, which have occurred as far back as 18 months ago and as recently as Monday. The message comes with urgency, especially for owners of vehicles affected by regional recalls in the following areas: Florida, Puerto Rico, limited areas near the Gulf of Mexico in Texas, Alabama, Mississippi, Georgia, and Louisiana, as well as Guam, Saipan, American Samoa, Virgin Islands and Hawaii. […]
Consumers that are uncertain whether their vehicle is impacted by the Takata [air bag recall], or any other recall, can contact their manufacturer’s website to search, by their vehicle identification number (VIN) to confirm whether their individual vehicle has an open recall that needs to be addressed.”
Ignition Switch Recall: Arizona Sues GM
November 25, 2010
Last week, Arizona became the first US state to sue General Motors over the company’s botched ignition switch recall. That state alleges GM disregarded public safety by hiding details related to the defective ignition switches and delaying their recall – for ten years.
Reuters reports that the lawsuit “seeks civil penalties of up to $10,000 per violation and affects hundreds of thousands of vehicles, suggesting a total potential penalty against GM of billions of dollars if courts rule in the state’s favor.” In total, the suit is valued at over $3 billion.
Since GM initiated the ignition switch recall in March, it has faced a number of civil suits, but the Arizona case marks the first one in which a government body will take the company to court. The problem with the defective ignition switches is that they can allow the key to slip out of position and shut the vehicle off suddenly, deactivating airbags, power steering, electronic stability control, and other important safety features. To-date, 35 deaths have been linked to this defect.
This lawsuit will be heard by the Superior Court of the State of Arizona, County of Maricopa, No. CV2014-014090, and is officially called “State of Arizona v. General Motors LLC”.
Again, Reuters: “Documents produced to U.S. Congress and federal safety regulators suggest GM may have been aware of issues with the switch for at least a decade before ordering recalls.
The recalls have expanded to encompass 60 serious defects affecting 27 million vehicles, the suit said.
GM said in October it was being investigated by 48 states. Representatives from several states involved said Thursday the investigations were ongoing.”
General Motors claims it shouldn’t be held responsible for vehicles manufactured after its 2009 bankruptcy, but many pending lawsuits, including State of Arizona v. General Motors LLC, assert the company should be liable for all its vehicles. Most believe a decision won’t be made until 2015.
Importantly, Reuters reported that Arizona alleges “GM Chief Executive Mary Barra, while head of product development, was informed in 2011 of a safety defect in the electronic power steering of several models.”
For more information regarding the GM ignition switch recall, follow the links below. As always, as more information regarding the Arizona lawsuit over the fumbled ignition switch recall becomes available, we will update you here at Legal Reader.
Airbag Recall Widened to Include 50,000 More Nissan Cars
November 10, 2014
Today, the LA Times reported that the Takata airbag recall widened to include over 50,000 more Nissan cars. As we wrote earlier, faulty airbags from this Japanese parts maker can explode on deployment, sending metal and plastic shrapnel into both drivers and those rising in the front passenger seat. In all, this recall affects 7.8 million cars in the United States (16-20 million total worldwide) of a variety of makes, model years ranging from 2002-2008.
LA Times: “In this latest round of recalls, Nissan said it will call back close to 53,000 autos, including the 2003-04 Nissan Pathfinder, 2004-06 Nissan Sentra, 2003-05 Infiniti FX35 and FX45, 2003-04 Infiniti I35, and 2006 Infiniti M35 and M45 vehicles.”
To-date, at least four people have died as a result of injuries from these recalled airbags, and over 100 people have been seriously hurt. This comes only days after Honda’s defective airbag recall widened voluntarily.
Takata’s stock prices fell today (11/10/2014) as the United States Senate has called for a criminal investigation of the company and its management, Bloomberg reports, to the lowest point in nearly five years. In an e-mail, Takata wrote, “Takata takes very seriously the accusations made in this article and we are cooperating and participating fully with the government investigation now under way”. (Bloomberg)
For more information on the airbag recall, see the video below.
To read more about multi-district litigation for this and other auto-related recalls, see this recent post by another one of our writers.
2014 Airbag Recall Update: Experts Fear 20 Million Cars at Risk
October 27, 2014
This morning, ABC News affiliate, KRTK of Houston, reported that the National Highway Traffic Safety Administration is being investigated by the US Department of Transportation for bungling the 2014 Takata airbag recall.
“The transportation department is slamming its own agency, the National Highway Traffic Safety Administration, calling the recall ‘not optimal’ and promising this investigation into the airbags is far from over.”
These recalled airbags can explode on deployment, sending plastic and metal shrapnel into the faces and chests of drivers and those riding in the front passenger seat. Last week, about thirty people had been injured by the defective airbags, but now that figure lies over 100.
According to that ABC affiliate, “The federal review comes after the NHTSA first got the numbers wrong, saying last Monday 4.7 million million bags needed to be replaced. The next day it was nearly 8 million bags.
Safety experts say a total of 20 million bags should be replaced.” (emphasis added)
Airbag Recall Lawsuit
If you or someone you know was injured by a defective Takata airbag in one of the car models listed on this page, you may be entitled to significant financial compensation.
US Senators Urge Wider Takata Airbag Recall
Yesterday (10/23/2014), US senators Richard Blumenthal (D-CT) and Ed Markey (D-MA) urged the National Highway Transportation Safety Administration to issue a nation-wide recall of all cars containing the dangerous Takata airbags which can explode on deployment, sending plastic and metal shrapnel into a car’s cabin. As yet, NHTSA has only recommended suspect cars in southern, ‘humid,’ areas be serviced immediately to replace the defective airbags, but these senators feel this does too little to protect Americans at large.
In a letter to NHTSA, Blumenthal and Markey made the following statement:
“We are alarmed and astonished that NHTSA has endorsed a policy recently announced by Toyota and GM that dealers should disable passenger-side airbags and instruct against permitting passengers in the front seat if replacement parts for these airbags are unavailable. As a matter of policy, this step is extraordinarily troubling and potentially dangerous. As a matter of law, as you are aware, §30122(b) of the Motor Vehicle Safety Act (49 U.S.C.) prohibits a manufacturer from knowingly making a safety device inoperative unless the Secretary issues a specific exemption. We are unaware of an exemption from your office in the case of Takata airbags. We are also unaware of any risk assessment or other analysis conducted by NHTSA or automobile manufacturers showing that more lives would be saved than lost by disabling these air bags. Lastly, we are unaware of any information distinguishing the safety threats posed by the passenger-side airbags from the driver-side airbags. If the airbag is too dangerous for passengers, how can the very same airbag installed on the driver-side be sufficiently safe for drivers?” (emphasis added)
Continuing, the senators wrote, “The information available to us indicates no factual basis for distinguishing between states or regions of the country regarding the potential severe danger of this defect to motorists. All states experience seasons of heat and humidity. … NHTSA should immediately issue a nation-wide recall that protects all drivers.” (emphasis added)
The senators also urged that manufacturers provide no-cost rental cars to drivers who are unable to have their vehicles immediately serviced due to unavailability of replacement parts.
For more information, see our overview of the 2014 Takata airbag recall with the full list of at-risk vehicles.
Warning: Airbag recall expanded to nearly 8 million cars (2014)
October 23 , 2014
This week, the United States National Highway Transportation Safety Administration (NHTSA) widened the scope of a dangerous airbag system recall, now including 7.8 million BMW, Chrysler, Ford, Honda, GM, Mitsubishi, Mazda, Subaru, Nissan, and Toyota cars and trucks, model years 2000 to 2008.
Manufactured by the Japanese multinational Takata Corporation, these airbags use a defective propellant mechanism and frame which can explode on deployment, sending plastic and metal shrapnel into the faces and chests of both drivers and those riding in the passenger seat. To-date, this airbag defect has been linked to four deaths and thirty injuries from airbag ruptures in consistently warm areas such as, “Florida, Puerto Rico, limited areas near the Gulf of Mexico in Texas, Alabama, Mississippi, Georgia, and Louisiana, as well as Guam, Saipan, American Samoa, Virgin Islands and Hawaii” (NHTSA).
While this recall began in 2008, the NHTSA has not commented substantially as to why the recall was broadened in recent days. According to Bloomberg News, “Honda alone has recalled 6 million vehicles globally since 2008 because of the flaw.”
NHTSA: “Consumers impacted by the recalls should have their vehicles serviced promptly once they receive notification from their vehicle manufacturer. NHTSA remains in close communication with the supplier and automakers to gather additional data and will take appropriate action based on our findings.”
Check back here for more updates as this story continues to unfold.
Cars Containing Defective Takata Airbags:
As of October 20th, 2014, the NHTSA list of cars containing these defective Takata airbags was as follows:
BMW: 627,615 total number of potentially affected vehicles
2000 – 2005 3 Series Sedan
2000 – 2006 3 Series Coupe
2000 – 2005 3 Series Sports Wagon
2000 – 2006 3 Series Convertible
2001 – 2006 M3 Coupe
2001 – 2006 M3 Convertible
Chrysler: 371,309 total number of potentially affected vehicles
2003 – 2008 Dodge Ram 1500
2005 – 2008 Dodge Ram 2500
2006 – 2008 Dodge Ram 3500
2006 – 2008 Dodge Ram 4500
2008 – Dodge Ram 5500
2005 – 2008 Dodge Durango
2005 – 2008 Dodge Dakota
2005 – 2008 Chrysler 300
2007 – 2008 Chrysler Aspen
Ford: 58,669 total number of potentially affected vehicles
2004 – Ranger
2005 – 2006 GT
2005 – 2007 Mustang
General Motors: undetermined total number of potentially affected vehicles
2003 – 2005 Pontiac Vibe
2005 – Saab 9-2X
Honda: 5,051,364 total number of potentially affected vehicles
2001 – 2007 Honda Accord)
2001 – 2002 Honda Accord
2001 – 2005 Honda Civic
2002 – 2006 Honda CR-V
2003 – 2011 Honda Element
2002 – 2004 Honda Odyssey
2003 – 2007 Honda Pilot
2006 – Honda Ridgeline
2003 – 2006 Acura MDX
2002 – 2003 Acura TL/CL
2005 – Acura RL
Mazda: 64,872 total number of potentially affected vehicles
2003 – 2007 Mazda6
2006 – 2007 MazdaSpeed6
2004 – 2008 Mazda RX-8
2004 – 2005 MPV
2004 – B-Series Truck
Mitsubishi: 11,985 total number of potentially affected vehicles
2004 – 2005 Lancer
2006 – 2007 Raider
Nissan: 694,626 total number of potentially affected vehicles
2001 – 2003 Nissan Maxima
2001 – 2004 Nissan Pathfinder
2002 – 2004 Nissan Sentra
2001 – 2004 Infiniti I30/I35
2002 – 2003 Infiniti QX4
2003 – 2005 Infiniti FX35/FX45
Subaru: 17,516 total number of potentially affected vehicles
2003 – 2005 Baja
2003 – 2005 Legacy
2003 – 2005 Outback
2004 – 2005 Impreza
Toyota: 877,000 total number of potentially affected vehicles
2002 – 2005 Lexus SC
2002 – 2005 Toyota Corolla
2003 – 2005 Toyota Corolla Matrix
2002 – 2005 Toyota Sequoia
2003 – 2005 Toyota Tundra