Another 5 million vehicles recalled after 10th death linked to faulty Takata airbags
HONG KONG (Jan. 25, 2016) — The problems facing the troubled Japanese auto parts manufacturer Takata are getting even bigger.
Shares in Takata plummeted around 10% in Tokyo on Monday following an announcement by U.S. regulators that another 5 million vehicles would be recalled after a 10th death was linked to the company’s faulty airbags.
The move Friday by the U.S. National Highway Traffic Safety Administration expands a massive recall that had already affected at least 19 million cars from some of the world’s most recognizable automakers, including Ford, Nissan, and Toyota.
Takata’s stock is down nearly 60% over the past year as it continues to get hammered by the catastrophic fallout from what’s become a major consumer safety scandal.
“Our heartfelt condolences go out to the driver’s family,” Takata said in a statement on the latest death. “We are cooperating fully with regulators and our automotive customers and continue to take aggressive action to advance vehicle safety, including through our ongoing testing efforts, replacement kit production and raising consumer awareness of recalled vehicles.”
Takata, one of the world’s largest airbag manufacturers, has been struggling for years to recover after its inflators were discovered to be defective. The airbags can explode when activated, firing out shards of metal that have caused death and injury at the wheel.
They have now been linked to 10 fatalities since 2009 — nine of them in the U.S. and one in Malaysia.
Last year, a number of Takata’s customers — top automakers such as Honda, Mitsubishi and Mazda — started ditching the company, calling into question the future of the Japanese firm.
On top of that, Takata was ordered to pay millions of dollars in regulatory fines and is embroiled in a U.S. Justice Department investigation. The company is also involved in multiple private legal actions, and has settled a number of lawsuits with victims.
The scandal and massive fines have pushed Takata into the red. Last November, Takata announced a net loss of 5.5 billion yen ($46.3 million) for the first half of its 2016 fiscal year. It also widened its forecast for the year to a whopping loss of 30 billion yen ($250 million).
And the problems aren’t going away anytime soon: even the recalls have been plagued with a shortage of replacement parts.
“For years, Takata has built and sold defective products, refused to acknowledge the defect, and failed to provide full information to NHTSA, its customers, or the public,” Transportation Secretary Anthony Foxx said last year.