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Will leadership shakeup help Takata tackle airbag safety concerns?

More than 24 million vehicles have been recalled in the U.S. and around the world this year due to a defect in airbags manufactured by Takata. The Japanese company has resisted calls to do more, and today its president stepped down. Hari Sreenivasan learns more from David Shepardson of The Detroit News.

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  • GWEN IFILL:

    It’s been a record year for auto recalls, with disturbing stories about deaths, injuries and warning signs that were either missed or ignored by manufacturers and the government.

    One of the biggest recalls of the year involved air bags in more than 24 million vehicles from a dozen automakers. But the manufacturer of the air bags, Takata Corporation, has resisted calls to do more.

    And, today, its president stepped down.

    Hari Sreenivasan picks up the story from there.

  • HARI SREENIVASAN:

    Today’s change is the biggest move inside Takata since the troubles became well known.

    Stefan Stocker, the company’s first non-Japanese president, will be replaced by the company’s chairman and CEO, Shigehisa Takada. He’s the grandson of the company’s founder. But does the move help Takata deal with much bigger concerns over safety and get out from the cloud that has hung over the business since the reports began?

    David Shepardson of The Detroit News has been covering this story, joins me from Grand Rapids, Michigan.

    So why did they finally make this move?

  • DAVID SHEPARDSON, The Detroit News:

    Well, I think this is clearly another indication of Mr. Takada and the family exerting more control over the company’s operations.

    As you said, Mr. Stocker was the first non-Japanese president of the company. And over the last 10 months, as the company has seen tens of millions of vehicles recalled around the globe, it’s raised the stakes for the company to try to show both the public and automakers that these vehicles are safe and, more importantly, that the company has an effective solution to fixing the issues and finding the root cause.

  • HARI SREENIVASAN:

    And speaking of that root cause, when millions of vehicle owners take their cars back into the shop to get this fixed, do we know that the new air bags won’t have these problems?

  • DAVID SHEPARDSON:

    Well, that’s the real question.

    And the other issue is how long will it take them to actually get those replacement parts? At congressional hearings this month, members of Congress asked that very question. The problems with these air bags are twofold. One are production issues, as well as problems with the propellant at two factories in North America.

    And many of the issues have shown up four, five, six years after these vehicles were exposed to high humidity. We don’t know if, four or five years from now, these same problems will surface in these replacement air bags.

    Meanwhile, it will take at least six months to a year or more to get these millions of vehicles’ air bags replaced because there are so many vehicles ahead of them. Now, Takata says, in January, they’re going to up the production rate from about 300,000 replacement inflators to 450,000.

    But in the wake of that, companies like Honda have taken a step of hiring an outside other company to also build replacement parts, but they won’t be ready for another six months.

  • HARI SREENIVASAN:

    And the company, Takata, had been resistant to this wider recall for quite some time, right?

  • DAVID SHEPARDSON:

    Right.

    Back in mid-November, the National Highway Traffic Safety Administration demanded that five companies and Takata declare the driver-side air bags defective across the country. Before that, these vehicles were recalled in high-humidity areas, like Florida, Hawaii, parts of the Gulf Coast. But they wouldn’t expand that nationally.

    Then the government learned of an incident in August in North Carolina, a Ford Mustang, in which shrapnel exploded from a Takata air bag, causing leg injuries. And that was enough for the government to decide that this air bag recall should be expanded nationally.

    And then, on Monday, BMW became the last of the five companies demanded to expand that recall. Takata has not taken that step. And the real question is, will they do it eventually, or is this about cost?

  • HARI SREENIVASAN:

    Speaking of cost, is this the new normal? I mean, all of these recalls do add some cost to the overall vehicle and the manufacturer. Are manufacturers more likely to pass those costs on to consumers?

  • DAVID SHEPARDSON:

    You know, they’re going to have to at some point, because these costs are running into the billions of dollars for these recalls.

    I mean, at the end of this year, the U.S. there will have about at least 61 million vehicles recalled. That’s more than twice the all-time record set in 2004.

    On Monday of this week, a new National Highway Traffic administrator, Mark Rosekind, was sworn in. He’s now taking a fresh look. And he comes from the National Transportation Safety Board, where he was a very strong safety advocate. And he’s been charged with really shaking up the agency, making sure they’re doing a good job of holding auto companies’ feet to the fire.

    So it’s hard to see NHTSA being any — or returning to an era when they were not as aggressive. If anything, they are likely to be more aggressive going forward.

  • HARI SREENIVASAN:

    And what are the auto manufacturers bracing for, when they know that there is going to be a new sheriff in town and he has a more aggressive stance?

  • DAVID SHEPARDSON:

    Well, I think you are already seeing, in the flood of recalls this year, that auto companies are being much more careful to follow the rules.

    And the rules are, within five days of determining of a defect, you have to recall those vehicles and notify the government. Already this year, we have seen record fines to companies for not notifying the government in a timely fashion, not recalling enough vehicles and not recalling similar vehicles with problems.

    And the government has taken a very tough line with companies that drag their feet. So companies are trying to move faster. They’re taking a look at all of their recall operations, and they’re basically bracing for hundreds of millions or billions of dollars in future costs.

  • HARI SREENIVASAN:

    All right, David Shepardson of The Detroit News, thanks so much for joining us tonight.

  • DAVID SHEPARDSON:

    Thanks, Hari. Happy Christmas to you.

  • HARI SREENIVASAN:

    You, too.

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