Honda has been having a tough year. With the world just recovering from a shaky economy, the year 2015 was expected to see a surge in car sales. Honda, in particular, was expecting a huge profit from cars sales all over the world. However, the Takata airbag fiasco has made a significant dent in the financial bottom-line of Honda.
Takata, a Japanese manufacturer, was well aware of the air bag issue. In fact, a New York Times report brought the issue to their reader’s notice way back in 2014. According to the report, Takata knew that their air bags had been rupturing and spewing metal debris on drivers.
In an effort to hide the issue, the manufacturer decided to carry out secretive tests on 50 airbags retrieved from local scrap yards. The tests showed that the steel inflaters on the airbags had a higher chance of cracking when the bags inflated. The inflaters would also spew metallic debris into the driver’s face and chest increasing the chances of dangerous injuries and vehicular crashes. Instead of alerting authorities, the company deleted the results and disposed off the test results. But airbag ruptures increased, and Takata eventually had to face up to the mistakes. Takata has deals with almost every car manufacturer in the world and this resulted in more and more defective cars rolling off the production line.
The Honda Situation
As of 2015, more than 11 automakers have had to withdraw more than 14 million vehicles because of the errors. Four deaths have already been tied to the defect and more than 139 injuries have been reported. Honda has felt the financial pinch of recalls the most.
In the past, Honda spokespeople had discussed the issue with Takata and they had been reassured that the airbags problem was not a major issue. The discussion arose after a 2004 incident involving a 2002 Honda Accord and its airbag. This was the first known incident involving Honda. At the time, both Honda and Takata refused to disclose any details regarding the accident and a settlement was reached between the car company and the driver.
The situation worsened with at least six deaths and more than 64 injuries related to exploding airbags in Honda cars. Honda is now facing the brunt of the problem and it has had to recall more than 5.5 million vehicles since 2014. The new recall covers more than 88,549 vehicles of 2008 Honda Pilots, about 10,868 vehicles of the 2004 Honda Civic and 5000 vehicles of the 2001 Honda Accords.
As of March 2015, the National Highway Traffic Safety Administration or the NHTSA has also started levying a $14,000 fine per day on Takata for failing to report the issue and delaying responses to inquiries from the NHTSA. Affected car manufacturers like BMW, Fiat Chrysler Automobiles NV, Ford Motor Co, Honda, Mazda Motor Co, Nissan Motor Co, and other companies have also joined together to create an investigative panel to deal with the issue. Independent testing of all Takata airbags will also be carried out by Orbital ATK to ensure customer safety.