Takata Airbag Crisis: Global Recall of 3.7 Million Vehicles - Essay Sample

Introduction

Takata was a formerly a Japanese owned company that operated in automotive parts. The company operated across four continents with its headquarters based in Europe, Germany where it situated nine production branches. In the year 2013, the company experienced a business blow as its airbag products that were manufactured from Mexico's branch contributed to a series of injuries and deaths. This subsequently led to recalling about 3.7 million vehicles that operated on such airbags hence affecting the business as a whole (Amamori, 2014).

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

The national highway traffic safety administration has currently engaged in an ongoing recall activity of approximately 42 million cars within the US borders. This recall strictly applies to cars and vehicles that are equipped with Takata airbags which massively contributed to further fatalities. This basically forms the largest recall in the field of automotive leading to the bankruptcy of the airbag manufacturer in 2017.

Takata originally commenced business in 1933 as a producer of parachutes and textiles lifelines. The business further introduced itself in the selling of seat belts where it built the very first crash testing plant for seat belt testing in Japan in the early 1960s (Grabowski & Keyser, 2015). Additionally, the company extended its territories by going international to Korea, England, and the United States after successfully changing its name to Takata Corporation. It majorly engaged in selling seatbelts during this phase of business.

Takata Corporation further expanded its business in 2000 by acquiring Petri Ag, a German-based business competitor. This eventually resulted in the company getting rebranded o Takata-Petri making a subsidiary in Europe which was later renamed Takata AG in the year 2012. Takata AG majorly engaged in the making of steering wheels together with plastic parts for a wider industry including the automotive industry.

In 1995, the US conducted a recall of close to 8.5 million vehicles. This recall widely affected vehicles that were built in Japan mostly between the years 1986 to 1991 (Mudgett, 2016). The vehicles were additionally equipped with seatbelts manufactured by the japan based company known as Takata Corporation. This formed the beginning of the second-largest recall in the history of the transport department. This recall was initiated by the investigations conducted by the national highway traffic safety administration focusing on vehicles that were equipped with Takata products.

The above-mentioned investigations commenced upon a good number of Japanese built vehicles consistently complaining of either latching failure of seat belt buckles or the buckles latching and automatically releasing together with releasing during the occurrence of accidents. The investigations further revealed that the faulty Takata seat belts were not only associated with Honda vehicles but also the majority of imports from Japan.

Nevertheless, the second phase of investigations was again conducted by the administration. The investigation primarily focused on Takata seat belts in general together with all vehicles manufactured by other companies but specifically adopted the Takata seatbelts. This investigation possessed the main objective of determining the defect magnitude of Takata seat belts. Additionally, it only focused on seat belt buckles on the front seats. It later revealed that eleven manufacturers in total experienced similar challenges thereby affecting the investigation.

Most of the models from japan sold in the United States by the American Honda Motors, Nissan, Mazda motors Mitsubishi and other many more experienced an almost similar seat belt buckles defect. Occasionally, it was evident that a significant number of Japanese manufacturers had a suspicion that the failures or defects associated with either the seat belts could arise from the user abuse perspective rather than the perceived design failure. Nevertheless, a series of elaborate investigations were further conducted (Grabowski & Keyser, 2015). The investigations identified that the ABS plastic component of the seat belt buckles formed the source of the seat belt buckle defect. The plastic consistently got brittle falling off its pieces whenever exposed to ultraviolet light over a period of time use. This eventually initiated the inefficiencies of the seat belt buckle release button.

Eventually, the outcome of the investigation prompted the involved manufacturers to voluntarily recall out of the market despite the entire process not becoming as smooth as jointly agreed and expected. This became evident as only 18% of the 8.9 million vehicles which possessed the defective Takata seat belt buckle engaged in repair activities within 2 years of recall. As a result, bo0th Honda and Takata were exposed to a civil penalty of $50,000 for not informing the NHTSA of the seat belt defect within the desired time to avoid fatalities and increased accidents.

Honda was subjected to the penalty since the agency believed it had prior knowledge of the defect 5 years before the enactment of the recall but never neither notified the authorities nor disengaged from the business through a recall. I personally believe this was the best resolution approach to industrial misconduct by both Honda and Takata as it aims at correcting the defects and protecting the entire users of the cars.

In 1998, Takata commenced the making of airbags holding a 20% share of the market by 2014.in the course of 2013, a good number of automakers initiated recall measures of vehicles as a result of Takata made airbags with reports indicating that the menace might have begun a decade before. The airbags possessed a risk of rupturing while sending off flying debris into the vehicles.

July 2014, an expectant woman driving in 2004 Honda got killed after a collision involving her which contained the defective airbag (Koark & Beul, 2017). She experienced her death through a fragment of metal from a ruptured driver's airbag which pierced into her neck during the accident. According to details from the court proceeding filed by her father, the delivered baby died three days later after the passing of the mother.

Following a consistent increase in deaths involving Takata airbags failures and defects, Takata was ordered to initiate a countrywide recall of its airbags. As a result, thousands of cars in the US which were equipped with faulty airbags from Takata manufacturers were successfully recalled from the market (Top, 2018). As of 2015, Takata registered the largest recall in automotive industry history with a recall of about 40 million vehicles across 12 brands of vehicles relating to defective airbags which possessed the danger of exploding.

In addition, Takata was exposed to a legal fine of $200 million by the US federal regulators subject to admission of the mistake by the manufacturing company. Nevertheless, the managing executives of the Takata Company were as well charged for the exploding airbags. With the aim of resolving the investigation, the company eventually pleaded guilty and agreed to pay a fine $1 billion (Amamori, 2014). I find the case to have been resolved satisfactorily despite the resolution not capable of compensating for the lost lives.

References

Amamori, I. (2014). U.S. Patent No. 6,832,780. Washington, DC: U.S. Patent and Trademark Office.

Grabowski, R. M., & Keyser, M. R. (2015). U.S. Patent No. 6,213,513. Washington, DC: U.S. Patent and Trademark Office.

Koark, F. J. U., & Beul, C. (2017). Avoiding Safety Scandals by Controlling the Risk of Material Changes (No. 2017-01-0373). SAE Technical Paper.

Mudgett, S. M. (2016). Exploding Liability: Creating a Cause of Action for Defectively Designed Airbags Under the Restatement (Third) of Torts. Or. L. Rev., 78, 827.

Top, J. (2018). The Explosive Recall: Proposing Solutions to Handle the Void Left by the Takata Bankruptcy. Wis. L. Rev., 593.