Automakers Knew of Takata Airbag Hazard for Years, Suit Says
By HIROKO TABUCHI and NEAL E. BOUDETTEFEB. 27, 2017
At least four automakers knew for years that Takata’s airbags were dangerous and could rupture violently but continued to use those airbags in their vehicles to save on costs, lawyers representing victims of the defect asserted in a court document filed on Monday.
The Justice Department’s criminal investigation into Takata’s rupture-prone airbags has so far painted automakers as unwitting victims duped by a rogue supplier that manipulated safety data to hide a deadly defect, linked to at least 11 deaths and over 100 injuries in the United States.
But the fresh allegations against Ford, Honda, Nissan and Toyota, made as part of a class-action lawsuit in Florida and based on company documents, point to a far deeper involvement by automakers that used Takata’s defective airbags for years.
Honda vehemently denied the new allegations on Monday. The three other automakers either declined to comment or said a response would come through legal channels.
Last summer, The New York Times reported indications that automakers, rather than being the victims of Takata’s missteps, had pressed their suppliers to put cost before all else. That report focused on General Motors, which is not named in the Florida case, though plaintiff lawyers said they were preparing to take action against the company.
The defect has prompted the nation’s largest automotive recall ever, affecting nearly 70 million airbags in 42 million vehicles.
The plaintiffs’ filing came hours before Takata pleaded guilty, under a deal announced last month, to charges of wire fraud for providing the false data, a rare outcome for businesses accused of wrongdoing. Federal prosecutors also said last month that they had charged three Takata executives with fabricating test data and fined the Tokyo company $1 billion.
“I deeply regret the circumstances that resulted in the agreement today,” Yoichiro Nomura, Takata’s chief executive, said at the federal court hearing in Detroit. The company’s actions were “completely unacceptable,” he said.
“Takata is fully committed to ensuring such conduct never happens again,” he added.
The allegations in the Florida case came in response to a court document filed by the automakers last week that pointed to Takata’s plea deal to argue that the supplier alone was culpable.
But the plaintiffs, who could gain from suing the deep-pocketed automakers alongside Takata, argue that the automakers were more deeply involved in the handling of the defect. The fines and costs associated with the scandal have also taken a heavy financial toll on Takata, and it has been searching for a financial lifeline — possibly in the form of a white knight that would effectively take it over.
One of the plaintiffs’ lawyers, Kevin R. Dean, filed an objection to Takata’s plea deal on Monday in Detroit, arguing that the automakers were accomplices in the cover-up. He urged the judge to reject the agreement and for the Justice Department to further investigate the automakers’ role.
The plaintiffs have taken particular issue with the amount set aside for victims in Takata’s plea — a total of $125 million. In contrast, the automakers will have recourse to draw on an $850 million fund to offset continuing recall costs.
Judge George Caram Steeh dismissed Mr. Dean’s objections, saying that Takata’s plea deal was in the best interest of the victims. He said any further action against the automakers should be pursued in civil court, and approved the plea deal as is.
Randi Johnston, 26, of Farmington, Utah — who was injured in September 2015 when the airbag in her 2003 Honda Civic ruptured and metal shards struck her throat — attended the hearing and said afterward that she was shocked by the judge’s decision. The shards severed most of her vocal cords, leaving her able to speak only in a whisper.
“I really don’t have any words right now,” said Ms. Johnston, a plaintiff in the Florida class-action case.
The filing by the plaintiffs says emails and internal documents turned over by Honda show that in 1999 and 2000, the automaker was intimately involved in developing a problematic propellant, or explosive, used in Takata’s airbags. The propellant is housed in a steel container called the inflater, which in the Takata case can rupture, shooting metal fragments toward the car’s driver or passengers.
That propellant, based on a volatile compound, raised concerns internally at Takata at the time, and long plagued the company’s engineers. During testing of Takata’s inflaters in 1999 and 2000 at Honda’s own facilities, at least two inflaters ruptured, according to the filing. Still, Honda pushed a particularly problematic configuration of the propellant over Takata’s objections, the filing said. Honda chose Takata’s airbags because of their relative “inexpensiveness,” the filing quoted Honda documents as saying.
The first recalls of Takata’s airbags did not take place until almost a decade later, when Honda recalled 4,000 vehicles in 2008. The Times has reported that Honda and Takata became aware in 2004 of an airbag explosion in a Honda Accord in Alabama that shot out metal fragments and injured the car’s driver. But the two companies deemed it “an anomaly” and did not issue a recall or seek the involvement of federal safety regulators.
On Monday, Honda strongly y denied the allegations in the plaintiffs’ filing. When it installed Takata’s airbags, it said in a statement, “Honda reasonably believed, based on extensive test results provided by Takata, that they were safe.”
Honda said it believed it reacted “promptly and appropriately” in handling known airbag defects. It also said Takata’s airbags had not necessarily been cheaper than those of its competitors.
“Sometimes they were more expensive, sometimes less,” the carmaker said.
The filing also cites internal documents from Ford, Nissan and Toyota indicating that cost considerations influenced the automakers’ decision to adopt Takata’s airbags in the early 2000s, despite safety concerns.
Toyota used Takata’s airbags “primarily” for cost reasons, even though the automaker had “large quality concerns” about Takata and considered the supplier’s quality performance “unacceptable,” the filing said. In 2003, a Takata inflater ruptured at a Toyota facility during testing, the court filing said.
In 2005, Nissan began investigating the use of adding a drying agent to Takata’s airbag inflaters out of concern that exposure to moisture made the propellant particularly unstable, the filing says. Takata engineers had long known that its explosive was sensitive to moisture and adopted it despite internal concerns over its safety. Although patents show that its engineers have long struggled to tame the propellant, the company still maintains that the explosive can be stabilized to withstand moist conditions.
Ford chose Takata’s inflaters over the objections of the automaker’s own inflater expert, who opposed the use of Takata’s propellant because of its instability and sensitivity to moisture, the filing said. Ford overrode those objections because it thought Takata was the only supplier that could provide the large number of inflaters Ford needed, the filing says.
The filing says that Ford, Honda, Nissan and Toyota were also aware of instances of ruptures years before any recalls.
It also mentions the German carmaker BMW and points to circumstantial evidence that BMW was similarly involved in what federal prosecutors, in their criminal complaint and in announcing the Takata guilty-plea agreement, have called a cover-up. But BMW has so far refused to submit documents in the case, the filing says.
Representatives of Nissan and BMW said the companies could not comment on active cases. A Toyota representative also declined to comment. A Ford spokeswoman said the automaker would respond through appropriate legal channels.
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