In the wake of injury lawsuits and a federal criminal investigation over exploding air bag inflators, management at manufacturer Takata is undergoing a major restructuring. The current company president, Stefan Stocker, announced that he is abdicating in favor of chairman Shigehisa Takada. Additionally, Stocker, Takada and at least three other high-ranking executives will see their paychecks shrinking by as much as half as client automakers cancel orders and legal troubles continue to mount.
So far, the recall of its airbags has cost Takata $400 million.
A video recently posted at the website of the New York Times shows units at a Texan distribution center falling from a pallet while loading. According to the reporter, Takata continued to ship these potentially damaged units without returning them for inspection. The reason? The company was struggling to keep up with demand; management determined there was no time to examine the units for possible damage or replace them.
At least four people in the U.S. and one in Indonesia have paid for Takata’s cutting corners with their lives, and thirty more have suffered moderate to serious injuries as a result of exploding inflators.
So far, these incidents have been confined to vehicles operating in warm, humid environments such as Florida and Hawaii. Nonetheless, the federal government and similar agencies across the planet have issued comprehensive recalls on automobiles from a dozen manufacturers. Because the injury incidents have occurred only in these tropical and semi-tropical regions, Takata has been fighting demands to recall vehicles in other climate areas. Individual automakers are issuing their own recalls, however.
Available evidence indicates that the explosions, which eject jagged metal shrapnel into the face and upper body of the driver, are the result of Takata’s use of cheaper ammonium nitrate in place of more stable, but costlier tetrazole gas. Under warm, humid conditions, ammonium nitrate reacts and causes the inflator housing to weaken and break when the airbag deploys.
It brings to mind the issue of “false economy,” which has been driving corporate decision-making across the board for the past generation. These manufacturers, hoping to cut costs and increase profits by taking shortcuts and using less-expensive alternatives, are increasingly finding them on the hook for legal costs and multi-million dollar judgments – and even criminal charges.
Perhaps they will learn that spending a few extra dollars for the sake of safety and quality today usually saves multi-million dollar losses tomorrow.
For more detailed information on the Takata Airbag Recall Lawsuits, visit Levin Papantonio’sTakata Airbag Web Page.
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