Air-Bag Crisis Spreads After Takata Deaths Outside U.S.

An air-bag crisis ensnaring the world’s largest automakers is deepening after Honda Motor Co. disclosed another death, a grand jury subpoenaed Takata Corp. and a U.S. Senate committee scheduled a hearing for next week.

Defective Takata air bags caused the July 27 death in Malaysia of a woman in a 2003 Honda City subcompact, said Akemi Ando, a spokeswoman for the carmaker. The pregnant woman’s unborn child also died, Honda said in a separate statement. The company was notified of the accident -- the first outside the U.S. -- one month later and is now recalling more than 170,000 additional vehicles worldwide because of a problem traced back to a Takata plant in Georgia, it said earlier.

The fatal accident, expanding recalls and the emergence of an additional manufacturing flaw reflect an intensifying disaster affecting at least 10 automakers. While Honda has now called back almost 6.2 million vehicles globally over Takata air bags since 2008, the four previous deaths linked to the devices were all in the U.S.

“This just got further out of control, and we should look out for more problems in Asia,” Ashvin Chotai, managing director of researcher Intelligence Automotive Asia, said by phone. “This is just a nightmare, for regulators as well as for automakers and Takata. How do you contain this now?”

Faulty air-bag inflators made by Takata have ruptured and spewed metal fragments at passengers, prompting safety campaigns by automakers including Honda, Toyota Motor Corp. and General Motors Co. Takata received a subpoena from a federal grand jury demanding documents and explanations for the defects, Hitoshi Sano, head of investor relations, said Nov. 13.

‘Deeply Apologizes’

The U.S. Senate Committee on Commerce, Science and Transportation said in an e-mailed statement that it plans a hearing for Nov. 20 “to focus on how defective Takata air bags became installed in so many vehicles and the responses of both automakers and” regulators to protect consumers.

Takata shares, which had climbed as much as 9.4 percent on Nov. 13 before the disclosure of the Malaysian death, pared gains and ended at 1,231 yen ($10.63) in Tokyo, up 3.3 percent for the day. The stock has plunged 59 percent this year.

“Investors are thinking ‘not again,’ with negative news coming out one after another,” said Nobuyuki Fujimoto, a senior market analyst at SBI Securities Co., a Japanese online brokerage. “Takata still has room to fall and is vulnerable to bad reports.”

Chairman Shigehisa Takada “deeply apologizes” for the Malaysia incident, the grandson of the 81-year-old company’s founder said in a statement. Takada, 48, didn’t attend an analyst briefing yesterday held in Tokyo, where the company is based, and hasn’t appeared in public since an annual shareholder meeting in June, which was closed to media.

Georgia Factory

The flaw prompting Honda’s recall yesterday was traced back to problems at Takata’s now-closed plant in LaGrange, Georgia, according to Ando, the automaker’s spokeswoman. Takata has already disclosed issues with factories in Moses Lake, Washington, and Monclova, Mexico, in U.S. regulatory documents.

Japan’s Transport Ministry has asked all domestic carmakers to quickly check if the Georgia issue that affected Honda also applies to their air bags, said Nobuhito Kiuchi, the official overseeing the vehicle recalls.

“We continue to investigate Takata-supplied inflators,” Danny Chen, a spokesman for Toyota City, Japan-based Toyota, said by phone. Chris Keeffe, a spokesman for Nissan Motor Co., declined to comment.

Expanded Recall

Yesterday’s expanded Honda recall involves five models including the Fit and the Civic, Ando said. The company will call back about 70,000 units sold in Japan, as well as vehicles in China, Europe and other overseas markets. None of the vehicles were sold in North America.

Malaysian police couldn’t immediately comment on the case.

Takata has faced calls by U.S. senators for a criminal investigation into the company following a New York Times report that it tested air bag inflators in 2004 and discarded them without alerting regulators.

The company disputed that report, saying that it conducted the experiments in response to an unrelated air bag flaw and shared the findings with Honda and the National Highway Traffic Safety Administration.

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