Takata president makes public apology for airbag deaths

Bloomberg News report

TOKYO (June 25, 2015) — Takata Corp. President Shigehisa Takada has made a public apology for the eight deaths and hundreds of injuries related to the company's airbags dating back more than a decade.

Mr. Takada, 49, bowed and apologized at a press briefing in Tokyo after the company's annual shareholders meeting June 25. He said the safety components supplier is considering ways to help victims, including by setting up a fund to compensate them.

“I apologize for not having been able to communicate directly earlier, and also apologize for people who died or were injured,” Mr. Takada said. “I feel sorry our products hurt customers, despite the fact that we are a supplier of safety products.”

The grandson of the Japanese company's founder spoke hours after Toyota Motor Corp. and Nissan Motor Co., two of Takata's biggest customers, recalled another 3 million vehicles with airbags produced by the supplier. All fatalities related to Takata airbags — which can deploy too forcefully and shoot shrapnel at vehicle occupants — have occurred in Honda Motor Co. cars, and the devices have injured more than 100.

Takata will continue to use ammonium nitrate as the propellant that inflates its airbags through a chemical reaction, Senior Vice President Hiroshi Shimizu said. The company has produced more than 200 million inflators that use the material, cited by at least one auto maker as a cause for safety concern.

Ammonium nitrate

Fiat Chrysler Automobiles N.V. (FCA) said this week it is switching suppliers to replace driver-side airbag inflators made by Takata in more than 4 million recalled vehicles. The decision was related to choosing a safe chemical propellant instead of Takata's ammonium nitrate, Scott Kunselman, FCA's head of vehicle safety for North America, said June 23 during a Senate hearing in Washington, D.C.

Takata, car makers and regulators are still investigating the root cause behind why the company's airbag inflators are rupturing and shattering metal and plastic parts. The company has said it believes replacement airbag components it's making are safe.

Some shareholders who attended the meeting criticized Takata's handling of the crisis. Masahiro Yamazaki, 46, from Yamanashi prefecture, said the company's president was unable to say when its investigation will be resolved.

“Takada said this is going to drag on as the root cause hasn't been found,” said Mr. Yamazaki, who invested in Takata last year and owns 100 shares. “Honestly, I'm worried they will go under, and they did nothing to ease my concern today.”

Root cause

Mr. Takada said at the press conference that he didn't know how long it will take for the company to discover the root cause for the defects. He has previously apologized in written statements and print advertisements in U.S. newspapers.

Takata has fallen 38 percent in Tokyo trading in the last 12 months, while Japan's benchmark Topix index gained 33 percent. Mr. Takada and his mother Akiko own about 5 percent of the Tokyo-based company's shares. Another 52 percent is owned by TKJ KK, an investment firm that lists the family as board members.

The airbag maker faced pressure earlier this week from U.S. Sen. Richard Blumenthal, D-Conn., to set up a victims' compensation fund, similar to what General Motors Co. established for people killed or injured due to faulty ignition switches in 2.56 million recalled cars. Sen. Blumenthal called for the company to respond to his request within two weeks.

This Bloomberg News report appeared on the website of Automotive News, a Detroit-based sister publication of Tire Business.