Toyota Motor Corporation Reeling From New Takata Corporation Airbag Recall

Toyota Motor Corporation is reeling from the announced recall of their cars that use Takata Corporation airbag technology. They are just the latest car manufacturing company to announce a recall because of faulty airbag systems built by the Takata Corporation, that began in August with a recall announcement from The American Honda Corporation. The automaker is recalling 847,000 cars with the Toyota brand, along with vehicles it manufactures for Pontiac and Lexus. The Takata Corporation is based in Tokyo, Japan. The company manufactures numerous other safety devices for the transportation industry, including seat belt systems for automobiles and motor sports racing, and child restraint systems.

The Takata Corporation will bear the brunt of the costs incurred by the Toyota Motor Corporation for replacement of these defective airbags, and company analysts indicated the costs, associated with the recall for the first quarter of the company’s fiscal year, were $235 million. Takata Corporation disclosed a one-time charge off for recall related repairs for the defective airbags of over $470 million. Company executives had previously estimated the company would see an increase in total revenue of $156 million for fiscal year 2015. Shares of Takata Corporation stocks closed down by 23 percent earlier this week, the largest single day drop in the company’s history.

The Toyota Motor Corporation is only one of several car manufacturers recalling models in the wake of the Takata Corporation recall, and their recall is not the largest. That designation belongs to Honda. The American Honda Motor Co. is recalling over 5 million cars, which pales in comparison to the Toyota Motor Corporation’s 847,000 recalled automobiles that use a Takata Corporation manufactured airbag systems. This is the fourteenth recall of Toyota made products this year, and it presents more problems for them because Toyota Motor Corporation is the number one car manufacturer in the world, outpacing Honda handily. The shear volume of Toyota’s on the road today, and with so many recalls, the service departments at Toyota dealerships will be the one’s reeling from the announcement.

The Nissan Motor Co. is next on the list, with 694,000+ vehicles being recalled to repair the Takata airbag system. BMW is fourth on the list, with 627,000+ vehicles targeted for recall because of airbag issues, and Chrysler / Dodge / Ram is fifth on the list, with an estimated 374,000+ vehicles having been manufactured with the recalled airbag components. Mazda USA [64,000+], The Ford Motor Co. [58,000+], Subaru of America [17,000+], and Mitsubishi Motors [11,000+] round out the list. While the Toyota Motor Corporation is number two on the list, suspiciously absent from this list is the General Motors Corp. (GM), makers of Cadillac, Chevrolet, Buick and GMC brand automobiles. They do use other non-safety products from the Takata Corporation.

While the Takata Corporation airbag recall has the Toyota Motor Corporation reeling, the American Honda Motor Co. may actually be the biggest loser here, with regards to total amount of recalls due to the air bag. Honda has recalled over 5 million automobiles manufactured with Takata Corp. airbags, and the logistics of servicing this many cars in an appropriate amount of time appears daunting.

The National Highway Safety Administration (NHTSA) has been kept in the dark for years on this airbag issue, as it has been previously reported that Takata had known of the faulty airbag systems since 2004, and did nothing about it. The American Honda Motor Co. also appears to have known about these defective airbags, as they are the largest buyer of Takata manufactured airbag restraint systems.

At issue here is the reported fact that when deploying, metal fragments and shrapnel are ejected from within the airbag components, causing injury to passengers, and in some cases, death. There had been 139 reported injuries from the defective, sometimes exploding airbags, with 2 deaths being attributed to the faulty restraint systems deployment.

These defects call into question all of Takata’s safety products, as well as the other non-safety related products the company manufactures. Improper manufacturing techniques are usually systemic within any company, as executives create the manufacturing protocols that lead to the defect items being improperly produced in the first place.

There is no doubt that the Toyota Motor Corporation is reeling from the latest recall of defective airbags manufactured by the Takata Corporation. The NHTSA needs to be more proactive on this issue, and enforcement efforts need to focus on manufacturing procedures and protocols already in place at the Takata Corporation.

By Jim Donahue

Sources:
NY Times
International Business Times – Airbag Recall
International Business Times – Toyota Beats GM in Sales
Car and Driver
NHTSA

Image source:
Creative Commons – Magnus Manske