By David Sedgwick, Crain News Service
DETROIT (Feb. 13, 2015) — The Automotive Recyclers Association (ARA) has filed a lawsuit against Takata Corp., claiming that auto recyclers that wanted to salvage and resell Takata-made airbags will be unable to do so.
In its complaint, the ARA argued that Takata knew as early as 2004 that its airbags were defective, but that the company withheld information about the their reliability.
Recyclers “are not able to sell or trade these airbags because they are valueless,” the association said in a Feb. 10 press release. And that, in turn, means the recyclers overpaid for salvaged vehicles that contained the airbags.
Michael E. Wilson, the association's CEO, declined to estimate the price of a salvaged airbag. But he did note that recycled components are typically worth 20 to 90 percent of the manufacturer's list price.
Mr. Wilson also noted that bidding for salvaged vehicles has become more competitive. In an online auction, U.S. recyclers may find themselves bidding against overseas competitors, he said.
Takata declined to comment on the lawsuit.
The ARA is seeking class-actions status for its suit, which was filed in the U.S. District Court for the Southern District of Florida. The lawsuit also named a number of auto makers as defendants.
According to Mr. Wilson, the ARA has 1,050 direct member companies plus 2,500 affiliates.
This report appeared on the website of Automotive News, a Detroit-based sister publication of Tire Business.