By Nick Bunkley, Crain News Service
WASHINGTON (Oct. 27, 2014) — For the second time this year, a long-standing defect linked to deaths and injuries has triggered a mushrooming auto-safety crisis, lending more fuel to criticism that federal regulators haven't done enough to protect consumers from such dangers.
Ten auto makers have issued recalls for millions of airbags that, rather than save drivers and passengers in a crash, can explode with a lethal spray of jagged metal.
The flaw is connected to two deaths in what were otherwise fender benders, and two others may be related. Just this month, a Florida woman died with such unexpectedly severe gashes in her neck after a crash that police reportedly suspected homicide — until a recall notice for the vehicle arrived the following week.
Perhaps most unnerving to consumers, the problem doesn't yet appear to be contained. On Wednesday, Oct. 22, two auto makers told Automotive News that they couldn't say for sure whether all of the bad airbags had been identified. The next morning, one of them, Nissan Motor Corp., expanded its list by 260,000 vehicles globally, though none of the additions are in the U.S.
“The thing just keeps expanding,” said Karl Brauer, senior analyst with Kelley Blue Book. “The year span gets wider; the list of makes and models keeps getting longer.”
There have been few concrete answers about the scope of the problem from the airbag supplier, Takata Corp. of Japan. And after new data showed that the airbags posed a greater danger than previously believed, U.S. regulators at the National Highway Traffic Safety Administration (NHTSA) bungled attempts to raise awareness of the problem by understating the number of vehicles affected by more than 3 million; releasing incorrect lists of which makes and models are problematic; and referring consumers to a website that stopped functioning for days.
After watching the agency she ran in the 1970s stagger last week, former NHTSA Administrator Joan Claybrook put it bluntly: “I think they're having a meltdown.”
Bloomberg News reported late Oct. 24 that NHTSA's errors and overall “safety culture” were under review by a special team inside the Department of Transportation. The report cited a senior Obama administration official who requested anonymity.
Despite the gruesome nature of the defect, NHTSA agreed not to require official recalls for many of the airbags. That has allowed auto makers to use less formal notification processes and to largely exclude all but a handful of states and U.S. territories where Takata says high humidity can make its inflators dangerously explosive.
The situation has, in many ways, mirrored the crisis that confronted General Motors Co. earlier this year but on an even larger scale because of the number of auto makers and vehicles involved. The U.S. Attorney's Office in Manhattan, which also is probing the GM ignition-switch recall, has begun a similar investigation into Takata, sources told the Wall Street Journal, and the two congressional committees that conducted hearings with GM and NHTSA officials said they are seeking explanations from NHTSA on Takata.
Also, as in the GM case, NHTSA so far has refused to exert its full regulatory power with Takata as it awaits additional data to confirm whether the airbags do, in fact, constitute a safety defect.
But whereas GM said its testing concluded that unrepaired vehicles were safe if driven with nothing attached to the ignition key, there appears to be no way — short of avoiding a crash before getting the airbag replaced — for customers affected by the Takata actions to ensure their safety.
‘Field actions' vs. recalls
Takata has wrestled with airbag defects for several years, but the current debacle can be traced to May 20. That was when officials from Takata and NHTSA met to discuss several instances of Takata airbag ruptures in vehicles not covered by previous recalls.
Takata pointed to a common thread: All six “potentially relevant” incidents occurred in Puerto Rico and Florida. The company said its investigation was focused on whether prolonged exposure to humid climates combined with “potential processing issues” that occurred at Takata factories made its airbag inflators dangerous, according to a June 11 Takata letter to NHTSA.
The two sides agreed to work together to determine whether the issue amounted to a safety defect in millions more vehicles still on the road. Under their agreement, auto makers would conduct a series of regional “field actions” to replace the questionable airbags. These actions would apply only to high-humidity areas believed to present the highest risk: Florida, Hawaii, Puerto Rico and the U.S. Virgin Islands. Airbags collected from customers would then be tested to inform investigations into the issue.
In a statement issued at the time, Takata said: “We have been consistently cooperating with NHTSA, and we will continue to do so during the defect investigation that the agency recently opened, but we also stand by the quality of our products.”
Takata, BMW, Chrysler, Ford, Honda, Mazda, Nissan and Toyota agreed to the plan and announced their field actions in June and July. Mitsubishi and Subaru joined soon afterward.
Yet while the field actions are similar in effect to an official recall, they differ in a few ways. For example, they have less-stringent rules for how auto makers must notify customers and report to regulators how many vehicles have been fixed. And with the field actions, manufacturers don't have to officially acknowledge that a defect exists, as they would with an official recall.
“I am flummoxed by this,” Ms. Claybrook said, dismissing the regional tack as a cost-saving maneuver. “This is not a regulatory agency; it's an auto industry booster agency.”
Ms. Claybrook said that such regional actions in the past primarily have been used to fix relatively minor issues that present a low safety risk, are small in number and expected to occur only in limited areas — such as corrosion due to heavy use of road salt.
Sens. Richard Blumenthal, D-Conn., and Ed Markey, D-Mass., two of the most vocal lawmakers during the inquiry into the GM switch case, recently criticized auto makers' use of regional actions and last week implored regulators to do more.