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In Recent Visit to Washington, Takata Grilled about Failure and Future

Takata Corporation ("Takata" or the "Company") is a Japanese company that supplies automobile parts for major car manufacturers. Beginning in the fall of 2014, it was charged with more than 70 class action lawsuits due to allegations relating to its production of faulty airbags. In February, a large class action suit against Takata were filed against the Company in the Southern District of Florida. In addition to that class action, numerous other plaintiffs have brought suit against Takata and automobile manufacturers that utilized its products for personal injuries and deaths caused by the airbags' malfunction.1

Takata provided airbags for "Toyota, Honda, Mazda, Nissan, Mitsubishi, Subaru, Chrysler, Ford, and BMW - with Honda vehicles making up the bulk of the NHTSA list" and issued a safety recall due to the potential danger of the airbags.2 Most of the vehicles containing the problematic airbags were produced from 2000 to 2004. The plaintiffs allege that "a problem with the airbag's propellant can cause the safety restraint systems to fail during a collision, or even to deploy when no collision occurs."3 Injuries and deaths were reported when the airbags spontaneously deployed and sprayed shrapnel toward the driver and passenger seats. When the National Highway Traffic Safety Administration ("NHTSA") issued its recall, which encompasses nearly 8 million vehicles, it explained that people operating the faulty vehicles in environments with high heat and humidity were at greater risk for the airbag issues to manifest.4

Recently, Takata made its fourth appearance before the Senate Committee of Commerce ("Committee") that is investigating the vehicle component failure. During the hearing, Scott Kunselman, an executive with Fiat Chrysler, told the Committee that it would not be using Takata airbags when it replaces the defective airbags in its 4.1 million vehicles equipped with them. Kunselman referred to Takata's use of ammonium nitrate as a propellant as the reason that Fiat Chrysler will look to a new supplier to re-equip the recalled vehicles. The Committee questioned Takata as to why it would continue to use ammonium nitrate as a propellant instead of a safer option in light of the massive recall and many lawsuits.5

The NHTSA speculated that Takata probably continued its use of ammonium nitrate as a propellant because it is cheaper than alternatives. Overall the Committee was skeptical of Takata's actions to improve its airbags' safety despite the Company's assurance that it has improved its product, even those containing ammonium nitrate, which the Company has said it has upgraded and properly stabilized.6

Takata has a long road ahead in earning back the trust of auto manufacturers that utilize the Company as a supplier of airbags. During the Committee's hearing, legislators also criticized the NHTSA for its "mishandled inquiries about Takata airbags, as well as the long-delayed recall at General Motors last year of defective cars tied to at least 117 deaths."7 Senators called for the NHTSA to improve its screening process to become more efficient and spot serious safety issues earlier.

The legal team at SFMS has substantial experience litigating product liability matters, especially those concerning automobile defects. If you have any questions regarding this subject or this posting, please contact Valerie Chang (vchang@sfmslaw.com) or Michael Ols (mols@sfmslaw.com). We can also be reached toll-free at (866) 540-5505.

Shepherd Finkelman Miller & Shah, LLP is a law firm with offices in California, Connecticut, Florida, New Jersey, New York, Pennsylvania and Wisconsin. SFMS is also an active member of Integrated Advisory Group (www.iaginternational.org), which provides us with the ability to provide our clients with access to excellent legal and accounting resources throughout the globe. For more information about our firm, please visit us at www.sfmslaw.com.

SOURCES:

1. http://www.reuters.com/article/2015/02/06/us-takata-recall-lawsuits-idUSKBN0LA1YA20150206

2. http://www.latimes.com/business/autos/la-fi-hy-airbag-recall-increased-20141022-story.html

3.http://www.latimes.com/business/autos/la-fi-hy-airbag-recall-increased-20141022-story.html

4.http://www.latimes.com/business/autos/la-fi-hy-airbag-recall-increased-20141022-story.html

5. http://www.nytimes.com/2015/06/24/business/senate-commerce-hearing-takata-airbag-nhtsa-general-motors.html?ref=business

6. http://www.nytimes.com/2015/06/24/business/senate-commerce-hearing-takata-airbag-nhtsa-general-motors.html?ref=business

7. http://www.nytimes.com/2015/06/24/business/senate-commerce-hearing-takata-airbag-nhtsa-general-motors.html?ref=business

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