Takata to Take a Significant Financial Loss for Faulty Airbags

takata-logo smallTakata is facing a net financial loss for the fiscal year of 2014–15 for its liability in the recent spur of automobile recalls. Over nine automakers have issued recalls for over 11 million vehicles which have been identified for employing Takata-manufactured airbags. The airbag modules use propellants that are known to malfunction under certain conditions. In 2009, two separate crashes involving 2001 Honda Accords were responsible for the deaths of two victims, both of which were fatally injured by exploding Takata airbags. The total number of affected automobiles is as of yet unknown and the number of cars called in for repairs continues to grow.

Takata is a Japanese automotive parts manufacturer founded in 1933. It expanded into the airbag industry in 1988 and since then has also begun developing and producing propellants. 30 years later, Takata controls a fifth of the airbag market and supplies a large number of automakers, which often use shared components to reduce production costs. Its economic success has recently been handicapped by a flurry of accidents associated with Taketa-made airbags, as the firm has been held liable for a significant percentage of the recall costs and lawsuit compensation paid out to victims.

The essentials of an airbag consist in a folded bag, backed by an inflator that is controlled by a crash sensor. The sensor is alarmed at a certain threshold, which is usually comparable to the force produced by hitting a brick wall at 10 to 15 miles per hour. Containing stacked cases of propellant, the inflator uses a mix of explosive chemicals to create a burst of nitrogen gas, which in turn inflates the airbag proper. Certain models of Takata airbags contain poorly designed propellant cases and the explosives themselves can become unstable, which can lead to premature explosion or excessive acceleration of the gasses. This problem has been connected with hot and humid weather, and automakers have tried to focus their recalls to regions characterized by these climates — Florida, Puerto Rico, Georgia, Hawaii, among others.

Ongoing legal obligations may hold Takata accountable for up to 500 million dollars. Since the beginning of the year, the firm’s shares have fallen by almost 30 percent — for reference, the Nikkei — a major Japanese stock market index — average has decreased by six percent. Much of this cost is associated with labor and parts cost that individual automakers are passing on to their supplier, although the Japanese firm has also been held responsible for compensations paid to victims of accidents caused by defective Takata airbags. It has been reported, for instance, that the recompense paid to the families of two victims fatally injured by shrapnel launched by exploding airbags has been paid for, at least in part, by the Takata Corporation.

In response to ensuing debacle revolving around its airbag, Takata has promised to take steps to strengthen its quality control. Apart from failing to catch the defect prior to production, the company has also had trouble helping automakers identify affected vehicles because Takata did not keep thorough documentation of the destination of its products. As a result, the recall process has been proceeding more slowly than would otherwise be the case.

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The attorneys at Pope, McGlamry, Kilpatrick, Morrison & Norwood, P.C. have almost three decades of experience in product liability and automotive malfunction law. If you have been injured as a result of an airbag defect, the Pope McGlamry legal team can help you seek the compensation you deserve. Contact us and schedule your free case review today.

R. Timothy Morrison

Takata is facing a net financial loss for the fiscal year of 2014–15 for its liability in the recent spur of automobile recalls. Over nine automakers have issued recalls for over 11 million vehicles which have been identified for employing Takata-manufactured airbags. The airbag modules use propellants that are known to malfunction under certain conditions. […] Full Bio

Caroline G. McGlamry

Takata is facing a net financial loss for the fiscal year of 2014–15 for its liability in the recent spur of automobile recalls. Over nine automakers have issued recalls for over 11 million vehicles which have been identified for employing Takata-manufactured airbags. The airbag modules use propellants that are known to malfunction under certain conditions. […] Full Bio