U.S. Senators Blast Highway Safety Agency, Takata at Hearing

Updated on
Takata Knew of Air Bag Flaw in 2001: Report

The U.S. National Highway Traffic Safety Administration hasn’t been able to spot emerging safety hazards because of “blatant incompetent management,” a senator said Tuesday.

NHTSA, charged with ensuring safety on the nation’s roadways, gives too much discretion to carmakers and doesn’t use proper tools to assess defect reports, according to an audit report cited by Senator Claire McCaskill, a Missouri Democrat.

“This audit report is one of the worst I’ve ever seen for a government agency,” McCaskill said at a Commerce, Science and Transportation Committee hearing. “I was shocked when I read this report.”

Both the agency and Takata Corp., which makes air bags, were criticized at the hearing. The audit report, by Transportation Department Inspector General Calvin Scovel, was prompted by General Motors Co.’s delay in alerting the safety agency about a flaw in ignition switches that have been linked to more than 110 fatalities and 220 injuries.

NHTSA Administrator Mark Rosekind told the committee the agency has engaged in “tough self-examination” following the disclosures on GM and Takata.

The agency has agreed with all 17 recommendations in the report and is taking steps to rectify the issues, Rosekind said.

Funding Request

NHTSA also needs additional funding to make improvements, he said. The $10.6 million alloted for reviewing vehicle defects is 23 percent below the level 10 years ago, adjusted for inflation, he said.

Senator Bill Nelson of Florida, the highest-ranking Democrat on the committee, said the agency has only one person to screen 80,000 complaints a year.

“How in the world can you get this done?” Nelson asked Rosekind.

“You can’t,” Rosekind said. “That’s why I agree with the IG’s report. It’s just overwhelming.”

Scovel cautioned the committee that giving the agency more resources before they make broader improvements “does not seem like a good idea.”

Committee Democrats released a separate report Monday saying Takata employees knew of serious safety and quality control issues as early as 2001, years before flaws in its automobile air bags surfaced.

Takata shares fell 0.8 percent to 1,335 yen at the close in Tokyo trading. The stock is down 8.6 percent this year, compared with a 19 percent gain in the Topix index.

Halted Audits

The company also halted global safety audits to save money, the report issued by Democrats on the Commerce, Science and Transportation Committee said, citing documents reviewed as part of its investigation.

“The more evidence we see, the more it paints a troubling picture of a manufacturer that lacked concern,” Nelson said in an e-mailed statement.

Defaults related to air bags, which can spew shrapnel at passengers when they deploy, have killed at least eight people and injured more than 100.

The company was aware, or should have known, of lapses in manufacturing quality control as early as 2001, according to the report. Takata was told of three incidents involving faulty inflators in early 2007, and waited until late 2008 to issue a recall.

Takata said the Senate report, based on 13,000 documents collected by the committee for its investigation, had errors and that some of the company’s e-mails were taken out of context, according to an e-mailed statement. The company never halted audits of air bag safety, it said in the statement.

“We are committed to proper manufacturing practices and to the safety of our employees and the driving public,” the company said in the statement.

NHTSA has lowered its estimate of how many Takata air-bag inflators need replacing from 34 million to 32 million, Rosekind said. The agency is still trying to get a firm count, he said.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE