Takata May Go Under As More Automakers Back Away From Supplier
Toyota said Thursday that the world’s largest automaker would no longer use the beleaguered company’s airbags, joining Honda, Mazda and others, putting in doubt that supplier’s viability, Bloomberg reported (via Fortune).
Reuters (via Automotive News) reported that the automotive supplier, who was hit with a $70 million fine from the National Highway Traffic Safety Administration earlier this week, is preparing for the worst.
“We are considering some plans to survive, but it is not at the stage I can talk about yet,” CEO Shigehisa Takada said Wednesday, according to Reuters.
The company’s use of a propellant for its airbags that would explode with too much force, spraying metal into the passenger cabin, has been blamed for eight deaths and nearly 100 injuries. The company signed an agreement with NHTSA this week that acknowledged that the company was slow to react and covered up its faulty airbags.
Honda said it would not use the company’s airbags in its cars for “the foreseeable future.
“We have become aware of evidence that suggests that Takata misrepresented and manipulated test data for certain airbag inflators,” Honda said, according to Reuters. “Honda expects its suppliers to act with integrity at all times and we are deeply troubled by this apparent behavior by one of our suppliers.”
Shares for Takata were down 40 percent after the company signed the consent order with NHTSA.
Airbag sales were roughly 38 percent of the company’s yearly revenue, according to Bloomberg.
When regulators announced Takata’s fine, NHTSA officials said the fine could grow to $200 million if the supplier doesn’t comply with all aspects of the order, including appointing an independent monitor that would oversee the company’s compliance for five years.
NHTSA said it would speed up the recalls for cars equipped with potentially dangerous Takata airbags. Up to 19 million cars from 12 different automakers — 23 million inflators in total — could be affected.
The most dangerous airbags would be replaced by June 2016 and all airbags could be recalled by 2019.
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Takata's being portrayed as an evil entity, but in automotive supply; if you don't get the contracts, you're out of business, so we're manufacturing devices designed to save lives to a price point. There was a company in Aurora, CO called OEA that made airbags and they went out of business because of some non-lucrative contracts. Some of that business assuredly went to Takata. Now Takata is losing business and it's going to whoever else, but the real problem isn't fixed; automakers aren't paying anyone enough to make the right airbag, and only after every supplier in the world has a tarnished record will this be news.
Meanwhile, how do I get a new airbag for my car? Also who, if anyone, is on the hook to replace it?