NHTSA Said to Order Takata to Double Largest Recall Todayby
Expanded recall to affect 35 million to 40 million air bags
Part maker's stock has plunged since news of recall leaked
Takata Corp., the embattled maker of air bags linked to deadly malfunctions, is facing a major expansion of what is already the largest auto recall in U.S. history, a move that could cover 35 million to 40 million additional inflators, according to people briefed on the matter.
The National Highway Traffic Safety Administration has scheduled a 1 p.m. announcement Wednesday to reveal the expanded recall, according to a person familiar with the matter who asked not to be identified because the details aren’t public. The action will include all units that don’t have a desiccant, said one of the people familiar with the matter.
The move would more than double the 28.8 million inflators Takata had previously recalled in the U.S., affecting vehicles made by 12 different manufacturers including Honda Motor Co., Toyota Motor Corp. and Fiat Chrysler Automobiles NV.
At least 10 deaths have been linked to the devices, which have inflated with too much force and sent shards of metal into the passenger compartment. Two additional fatalities in Malaysia may be related to Takata air-bag explosions, the Associate Press reported Wednesday.
Bryan Thomas, a spokesman for NHTSA, declined to comment other than to say the agency is reviewing several investigations and “will take all appropriate actions.”
Takata spokesman Jared Levy said, “Takata is working with regulators and our automaker customers to develop long-term, orderly solutions.”
Takata raised provisions for the recall earlier this week. The auto parts supplier will book a combined 20.1 billion yen ($188 million) in charges, 16.6 billion of which was decided after reviewing air-bag recall costs, according to a statement on Monday. The remaining 3.5 billion yen charge is related to settlements with consumers injured by the devices.
Takata plunged by the most in a month on Monday after the Nikkei newspaper reported that U.S. regulators planned to expand the recall. The shares fell 9.2 percent to 373 yen at the close in Tokyo, dropping its market capitalization to about 31 billion yen.
“This is just another step in the long decline of Takata,” said Jochen Siebert, managing director of JSC (Shanghai) Automotive Consulting Co. “I just can’t see how Takata can survive this disaster.”
An expanded safety campaign will deal a further blow to Takata President Shigehisa Takada, who has so far failed to contain a spiraling crisis that’s wiped out 75 percent of his family company’s market value in the past year. Last May, the air-bag supplier set the record for the largest automotive recall in U.S. history by agreeing to almost double the number of vehicles called back to about 34 million worldwide.
In the U.S., NHTSA has told automakers that recalls will widen to all vehicles with air bags lacking a moisture-absorbing desiccant that keeps the devices from deteriorating, the Nikkei reported Saturday, citing unidentified sources. There are more than 100 million such vehicles worldwide, the newspaper said.
NHTSA has zeroed in on the role that moisture plays in making the Takata air bags unstable. The agency has said there’s no evidence that air bags that have a desiccant are defective.
In February, researchers hired by a coalition of automakers found that moisture was a key factor in the air-bag ruptures that can spray shrapnel toward drivers and front-seat passengers in the affected cars. Cars with a particular Takata air-bag design susceptible to water intrusion and with prolonged exposure to a high-humidity climate are also at the highest risk, the panel found.