CHICAGO (Bloomberg) -- Craig Jorgensen owns a Honda CR-V and a Toyota Avalon, both originally fitted with potentially deadly airbags made by Takata Corp. His experience in the biggest combined safety recall in U.S. automotive history shows just how complicated the process is.
The Honda was fixed within days after Jorgensen received letters saying the airbags had to be swapped out. But five months later, he said, his local Toyota dealer still has no idea when replacement parts will arrive. The 70-year-old from Issaquah, Wash., is still driving the Avalon anyway -- something most Americans with Takata-equipped vehicles are doing.
The U.S. has ordered a dozen automakers to replace Takata airbags in 19 million vehicles, and the National Highway Traffic Safety Administration has said the initial phase of the process won’t be completed until 2019. Regulators may yet widen the recall. And substitute devices being installed now may need to be replaced as they get older, the agency has warned, calling them “interim fixes.”
While drivers like Jorgensen may shrug, there’s ample criticism about the time it’s taking to address a problem Takata has known about since 2004. The chemical propellant in the bags’ inflators can deploy too forcefully, sometimes blowing up the casing and throwing shrapnel at occupants. Scores have been injured and eight killed.
'Grow exponentially'
“Waiting four years for replacement parts is too long,” said Clarence Ditlow, executive director of the nonprofit Center for Auto Safety. “NHTSA should order manufacturers to step up production and get it done in two years.”
But this recall is much more complex than most, said Sean Kane, president of Safety Research & Strategies Inc., which examines product hazards. “It involves multiple manufacturers and a variety of both cars and airbags. Plus, manufacturers allowed it to grow exponentially rather than solve it when they first investigated it.”
In October, NHTSA said Takata and other suppliers were producing replacement inflators at a rate of 2.8 million a month. Mark Rosekind, the agency’s administrator, said regulators will decide by Thanksgiving whether and how to push that rate higher.
Automakers are moving at different speeds. Honda Motor Co. said it’s replaced 41 percent of bags in the recall so far, while Toyota Motor Corp. said it’s repaired 27 percent of affected cars in states with high humidity, which can destabilize the bags’ chemical propellant. Fiat Chrysler Automobiles, meanwhile, said its national completion rate is 7.5 percent.
'A mess'
Takata became aware of an issue with the propellant after switching to ammonium nitrate, which is widely used in mining, construction and other industries. In 2008, Honda -- Takata’s biggest customer and owner of a 1.2 percent stake -- announced its first Takata-related recall; 43 more by Honda and other automakers followed. Even so, from at least 2009 until last year, Takata provided NHTSA and its own customers “selective, incomplete or inaccurate information” about the dangers, according to the agency.
“I have to say, this has been a mess,” U.S. Transportation Secretary Anthony Foxx said. Takata reached a consent decree with NHTSA that was announced Nov. 3, agreeing to phase out ammonium nitrate and pay a fine of as much as $200 million.
Its stalling tactics over the years helped create such a backlog of vehicles needing fixes that the national recall, when it came, was bound to be massive and messy, said Scott Upham, a former Takata marketing executive who works as an analyst at Valient Market Research and has been studying airbags for two decades. Upham’s 2006 Dodge Charger was recalled in May, and he said he’s still waiting for a repair appointment. In the meantime, he won’t let his 11-year-old daughter sit in the front seat.
The inflator, a triggering mechanism, isn’t expensive, costing $15 for a driver-side and $60 for a passenger-side bag. But engineers need as much as a year to customize them for individual vehicles, Upham said, such as the distance between seats and the steering wheel. NHTSA is coordinating efforts by Takata and other suppliers, including Daicel Corp., Autoliv Inc. and TRW Automotive. Because the urgency is greater in parts of the country with high humidity, the agency has been forcing them to deliver first to dealers in southern states including Florida.
Facing lawsuits
“Honda has an adequate supply to meet the pace of customers responding to the current recalls,” said spokesman Matt Sloustcher. “We continue to expand the supply.” At the moment, Toyota has sufficient inflators for high-humidity states, spokeswoman Cindy Knight said, and the company will schedule appointments for customers in others states as parts become available.
Takata and automakers face lawsuits, including one filed in Utah state court last week against the supplier, Honda and a dealer. Plaintiff Randi Johnston, 25, said when her Honda Civic was in a crash on Sept. 28, shrapnel from the Takata airbag severed her trachea and damaged her vocal chords. The dealer from which she bought the car failed to check if it was covered by the recall, according to the suit.
“I had no idea this was going on until the emergency-room physicians did a Google search to figure out where the shrapnel came from,” her father, Fred, said. Honda and Takata declined to comment on the case.
Takata is mounting a digital advertising campaign to encourage people to heed recall letters. The company might decide to pay small cash bonuses to people to persuade them, Ditlow said, as General Motors did in 2014 for customers whose cars had faulty ignition switches.
“We have taken, and continue to take, proactive steps to increase recall-completion rates,” a Takata spokesman said in an e-mail.
In Tokyo, Takata President Shigehisa Takada said Honda’s Nov. 3 decision not to renew its airbag contract could pose a threat to his company’s existence; Toyota and Nissan Motor Co. have also stopped using the company’s airbags.
“This recall is a disaster for consumers,” said Robert Ammons, a Houston attorney whose clients include drivers with Takata airbags. “And I don’t think Honda or Toyota did anybody any favors announcing they’ll no longer buy components from Takata. It could help their public relations, but it could be the hammer that puts Takata under, and then people may never get their airbags fixed.”
With assistance from Margaret Cronin Fisk and Jeff Plungis.
