[Senate Hearing 113-666]
[From the U.S. Government Publishing Office]
S. Hrg. 113-666
EXAMINING TAKATA AIRBAG DEFECTS
AND THE VEHICLE RECALL PROCESS
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
__________
NOVEMBER 20, 2014
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
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SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
JOHN D. ROCKEFELLER IV, West Virginia, Chairman
BARBARA BOXER, California JOHN THUNE, South Dakota, Ranking
BILL NELSON, Florida ROGER F. WICKER, Mississippi
MARIA CANTWELL, Washington ROY BLUNT, Missouri
MARK PRYOR, Arkansas MARCO RUBIO, Florida
CLAIRE McCASKILL, Missouri KELLY AYOTTE, New Hampshire
AMY KLOBUCHAR, Minnesota DEAN HELLER, Nevada
MARK BEGICH, Alaska DAN COATS, Indiana
RICHARD BLUMENTHAL, Connecticut TIM SCOTT, South Carolina
BRIAN SCHATZ, Hawaii TED CRUZ, Texas
EDWARD MARKEY, Massachusetts DEB FISCHER, Nebraska
CORY BOOKER, New Jersey RON JOHNSON, Wisconsin
JOHN E. WALSH, Montana
Ellen L. Doneski, Staff Director
John Williams, General Counsel
David Schwietert, Republican Staff Director
Nick Rossi, Republican Deputy Staff Director
Rebecca Seidel, Republican General Counsel and Chief Investigator
C O N T E N T S
----------
Page
Hearing held on November 20, 2014................................ 1
Statement of Senator Nelson...................................... 1
Statement of Senator Thune....................................... 2
Statement of Senator McCaskill................................... 4
Letter submitted by Hon. Claire McCaskill dated June 20, 2014
from Reginald Modlin, Regulatory Affairs--Director,
Chrysler Group LLC to Frank Borris, Director, Office of
Defect Investigation, National Highway Traffic Safety
Administration............................................. 33
Letter dated December 1, 2014 to Hon. Claire McCaskill from
Rick Schostek, Executive Vice President, Honda North
America.................................................... 41
Statement of Senator Heller...................................... 5
Letter dated November 21, 2014 to Hon. Dean Heller from Rick
Schostek, Executive Vice President, Honda North America,
Inc........................................................ 28
Statement of Senator Klobuchar................................... 23
Statement of Senator Ayotte...................................... 25
Statement of Senator Markey...................................... 29
Statement of Senator Blumenthal.................................. 31
Statement of Senator Cantwell.................................... 47
Statement of Senator Rubio....................................... 49
Witnesses
Lieutenant Stephanie Erdman, Destin, Florida..................... 6
Prepared statement........................................... 8
Hiroshi Shimizu, Senior Vice President, Global Quality Assurance,
Takata Corporation............................................. 11
Prepared statement........................................... 12
Rick Schostek, Executive Vice President, Honda North America,
Inc............................................................ 14
Prepared statement........................................... 15
Scott G. Kunselman, Senior Vice President and Head of Vehicle
Safety and Regulatory Compliance, Chrysler Group LLC........... 17
Prepared statement........................................... 18
David J. Friedman, Deputy Administrator, National Highway Traffic
Safety Administration, U.S. Department of Transportation....... 54
Prepared statement........................................... 59
Appendix
Response to written questions submitted by Hon. Richard
Blumenthal to Hiroshi Shimizu.................................. 69
Response to written questions submitted to Rick Schostek by:
Hon. Bill Nelson............................................. 70
Hon. Maria Cantwell.......................................... 71
Hon. Claire McCaskill........................................ 73
Hon. Richard Blumenthal...................................... 73
Hon. Deb Fischer............................................. 74
Response to written questions submitted Scott G. Kunselman by:
Hon. Bill Nelson to.......................................... 74
Hon. Maria Cantwell.......................................... 75
Hon. Claire McCaskill........................................ 76
Hon. Richard Blumenthal...................................... 76
Response to written questions submitted by Hon. Richard
Blumenthal to David J. Friedman................................ 77
EXAMINING TAKATA AIRBAG DEFECTS
AND THE VEHICLE RECALL PROCESS
----------
THURSDAY, NOVEMBER 20, 2014
U.S. Senate,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Committee met, pursuant to notice, at 10 a.m., in room
SR-253, Russell Senate Office Building, Hon. Bill Nelson,
presiding.
OPENING STATEMENT OF HON. BILL NELSON,
U.S. SENATOR FROM FLORIDA
Senator Nelson. Good morning, everyone. Senator Thune and I
have been looking forward to this. We want to thank the
witnesses for coming.
We are here to investigate the link between defective
airbags and the numerous injuries and deaths across the
country--indeed, across the globe.
More than 7.8 million vehicles in the U.S. have been
recalled because of defective airbags, and, just this week, the
National Highway Traffic Safety Administration announced that
it was calling on all automakers to expand that recall from a
few states, what they called a regional recall, to the entire
country.
Well, the first thing that needs to be done is to take care
of consumers. Automakers need to get a replacement part so that
the airbags can be replaced. That needs to be sent to the
dealers. And they need, because of people potentially driving
around with a defective airbag in their steering wheel and
dashboard, the dealers, the automobile makers need to provide a
loaner vehicle or a rental car for those whose cars cannot be
immediately fixed.
General Motors recently took that kind of step for certain
models with faulty ignition switches, and there is no reason
why the automakers covered by this notice should not be
required to take the same kind.
I think it is absolutely imperative, in view of the fear
that has gripped the public by virtue of what has already been
said and what will be stated in this hearing today, that a
loaner or a rental car would be provided for someone if they
cannot get their replacement of their defective airbag on the
recall list done immediately.
The owners should have a right to expect that the cars that
they drive are as safe as possible. And so that is going to be
what we are going to be facing in the next immediate future as
we dig into the question of what, in fact, is the problem.
Now, I have written to Secretary Foxx urging him to impose
civil penalties up to the full extent of his law on any company
that refuses to provide drivers with an alternative form of
transportation if they are going to have to wait to have their
car repaired.
The American people have a right to know about the story
behind this airbag recall, and so that is why we are here
today.
Now, let me just show you some of the items.
This is part of the steering mechanism. It would be facing
the driver like this, and it would look like this in the wheel
of the steering column. And, of course, the chemicals inside
this mechanism--upon impact, the chemical reaction causes an
inflation of the airbag.
And, upon close examination, you will see the little holes
around the mechanism that the gas that is created by the
chemical reaction comes out, inflates the airbag. And it is a
device that has saved many, many people's lives.
This compound, ammonium nitrate, seems to have a problem.
Long about the turn of the year 2000, when it was changed as
the compound, perhaps some of the metal as well and when the
explosions occur, instead of the gasses forming to fill the
airbag, additionally it explodes with such force that this
metal shreds it.
And, as a result, what you see, in this particular case of
an airbag, metal has shredded it. Here is a big hole. Here is
another hole. And the very device that is supposed to save
lives becomes a device that is taking lives. So that is
absolutely unacceptable.
Now, after the opening statements of the prospective
Chairman and Ranking Members, I have asked an Air Force active-
duty first lieutenant, who happens to be stationed at the large
Eglin Air Force Base in Fort Walton Beach, Florida, to be our
first witness and she will give you a firsthand account as to
what her encounter has been with a defective airbag.
Let me turn to our Ranking Member, Senator Thune, our
future Chairman of this committee.
Senator Thune, thank you for participating.
STATEMENT OF HON. JOHN THUNE,
U.S. SENATOR FROM SOUTH DAKOTA
Senator Thune. Well, thank you, Senator Nelson, for serving
as Chairman of this morning's hearing to examine the alarming
Takata airbag recalls and the actions of the National Highway
Traffic Safety Administration. These are currently issues that
belong on the Commerce Committee's agenda, and I appreciate
very much your calling this hearing to examine these issues in
greater detail.
I first want to thank Lieutenant Stephanie Erdman for being
here today. Thank you also for your service to our country. We
appreciate you coming here to tell your story and help inform
this committee.
This hearing is an important one, and our discussion today
will explore matters of public safety and accountability.
Ensuring the safety of America's motorists is a priority, but
the public's trust has been shaken due to the record number of
recalls this year and the beliefs many have about problems in
the industry and at NHTSA.
This year, record fines have been levied against Toyota,
GM, and Honda. Now, with the latest news of problems with
Takata airbags, we are again faced with examining an apparent
failure with serious safety consequences.
Today, we will be asking Takata, NHTSA, and other
stakeholders increasingly familiar questions about how these
faulty products made it into consumers' vehicles, when the
problem was first discovered, and what steps, if any, could
have been taken sooner that may have saved lives or prevented
injuries.
In this case, many would especially like to know whether
the allegations reported in The New York Times that Takata knew
of and hid risks related to airbags years ago are true.
Questions also exist about NHTSA's approach to these recalls
and the wisdom of the agency's initial decision to request
regional, rather than national, recalls--a decision which NHTSA
has since reversed for some of the affected vehicles.
The troubling string of recalls this year should be a wake-
up call. I believe we can do a better job of addressing safety
issues as they arise and holding automakers, their suppliers,
and NHTSA accountable to their shared mission of ensuring
safety on America's roadways.
In recent years, Congress has enacted, and NHTSA has sought
to implement, a robust early reporting regime. The major
automakers and other manufacturers have also instituted or
sought to improve internal safety reporting systems that
encourage employees to report safety problems. But reports of
employees whose concerns may have been ignored, silenced, or
possibly even covered up, persist.
I believe we can do more to ensure that NHTSA is informed
of potential defects as early as possible. That is why later
today I, along with Senator Nelson, will be introducing the
Motor Vehicle Safety Whistleblower Act. I am pleased that
Senators Heller and McCaskill, who have been at the forefront
of the Committee's efforts on the GM recalls, are also sponsors
of this legislation.
This bill will incentivize employees who uncover serious
allegations of vehicle defects or violations of motor vehicle
safety laws that could lead to death or serious bodily injury
to provide voluntarily that information to the Department of
Transportation. If such information leads to DOT or Department
of Justice enforcement actions that total more than a million
dollars in penalties, the whistleblower would be eligible to
share in a portion of total penalties collected.
This bill will also protect whistleblowers' identities and
allow NHTSA to share information with the Department of Justice
and other Federal agencies where appropriate. Other agencies
have similar programs, including programs that incentivize
individuals to report information to the Securities and
Exchange Commission and to the IRS.
If there are potential whistleblowers with important
information to help NHTSA identify more defects, we want them
to come forward so that these problems can be identified
earlier in the process. I think we would all agree that it is
better to address a problem before injuries or deaths occur, if
at all possible, rather than relying primarily on fines imposed
after the fact.
I look forward to working with stakeholders and my
colleagues as we continue oversight on these safety matters.
We will undoubtedly revisit many of these issues when we
consider the President's nominee to lead NHTSA. Having written
President Obama twice in the last 8 months urging him to fill
swiftly the NHTSA administrator position at NHTSA that has now
been vacant for 343 days, I am pleased the President finally
announced his intention to nominate Dr. Mark Rosekind on the
eve of this hearing. This nomination is long overdue, and I
look forward to reviewing the nominee's qualifications and his
plan for NHTSA in a timely manner.
Finally, I urge all of my constituents watching this
hearing to pay attention to any recalls or field actions and,
if you determine your vehicle is subject to a recall, to get it
repaired quickly by an authorized repair facility.
I want to thank the witnesses for being here today, and I
look forward to your testimony.
Thank you, Mr. Chairman.
Senator Nelson. Thank you, Senator Thune.
We want our two leaders in the Subcommittee to make a short
opening statement.
The Chair of the Subcommittee, Senator McCaskill.
STATEMENT OF HON. CLAIRE McCASKILL,
U.S. SENATOR FROM MISSOURI
Senator McCaskill. Thank you, Senator Nelson.
I find it troubling, but, more importantly, I am sad that I
am not surprised, that we find ourselves examining another
example of manufacturers' failure to fulfill safety obligations
that could have saved lives.
Honda is under investigation for failure to provide early-
warning reports to NHTSA related to the deaths the company has
linked to Takata airbags. Takata itself is also under
investigation by NHTSA and Federal prosecutors over troubling
claims that it might have known a long time before it notified
its auto manufacturer customers of the public safety defects
associated with millions of its airbags.
Ten automakers have now recalled at least 7.8 million
vehicles in the United States under either safety recalls or
service campaigns related to defective Takata airbags. What I
want to try to get to the bottom of at this hearing is what is
the difference and isn't that difference important--a safety
recall versus a service campaign.
There seems to be some confusion among the driving public
about the scope and severity of these recalls, and part of that
is because not all the manufacturers are treating this the
same, using the same language, and we have failed to have
clarity from NHTSA in this regard.
In this committee's Consumer Protection Subcommittee, we
have held three auto safety hearings since General Motors
recalled 2.6 million vehicles earlier this year for a defective
ignition switch that was largely ignored by the company and
Federal auto safety regulators for more than 10 years.
Sadly, I think today we will hear many of the same themes
we heard in the GM investigation: an industry that fears no
consequences for not complying with the law, companies more
focused on defending against private litigation than promoting
safety, and a regulator that lacks both the resources and
technical expertise to effectively do its job.
I am pleased that the President has finally nominated a
candidate to serve as NHTSA's Administrator, a position that
has been vacant for nearly a year--a critical year. I look
forward to hearing from him, particularly in regards to his
plans to strengthen the agency's oversight of the auto
industry.
Dr. Mark Rosekind has been nominated, and he certainly has
a resume that reflects years of work in the area of automobile
and transportation safety. This committee should move quickly
on a hearing to consider his nomination. I certainly have a lot
of questions.
As we head into a new session of Congress, this committee
should also make legislation reauthorizing NHTSA a priority. We
aren't going to agree on everything, but I think there is
enough common ground on the reforms that are needed to act
without delay. I look forward to working with the new Chairman
in that regard and all of the members of this committee in the
next Congress.
Thank you, Senator Nelson.
Senator Nelson. Thank you, Senator.
Senator Heller, the Ranking Member of the Subcommittee.
STATEMENT OF HON. DEAN HELLER,
U.S. SENATOR FROM NEVADA
Senator Heller. Chairman, thank you. And I will keep my
statement brief.
But before I begin, I want to acknowledge the lives that
were lost due to the Takata airbags and would like to thank
Lieutenant Erdman for being here today. Thank you for your
service to this country and for sharing your story with this
committee today.
Mr. Chairman, I think this is the year of the airbags. GM
had defects with airbags that would not deploy, and now we have
Takata airbags that send shrapnel into the face of those that
are driving.
As this committee knows, I know a little bit about cars. I
race them, I build them, I break them, and I fix them. Probably
break them more than I race them, but that just seems to be the
way it works out. But I will tell you the most terrifying thing
a driver experiences is a crash, and, at that moment, the only
thing that matters in their lives is that airbag.
We have common themes emerging from all of our hearings
this year from this committee and our subcommittee: It has
taken far too long from the information found within the
company that there is a defect and then getting these cars off
the road.
Today, I am proud to stand with Senator Thune, Senator
Nelson, and Senator McCaskill on introducing legislation that
would bring this information forward faster by rewarding
whistleblowers. It is my hope and it is our hope that the Motor
Vehicle Safety Whistleblowers Act will solve the problems that
we are seeing time and again with these recalls, that employees
in these companies have raised concerns about defects and those
warnings have not been properly vetted. It is my hope that a
significant monetary payout will get this information to the
public faster and faster means saving lives.
Today, this committee has Takata here. We need to know what
they knew and when they knew it. I am very troubled by the New
York Times article that alleges that there may have been a
cover-up.
And I am glad to have NHTSA here. Just yesterday, the
President submitted his nomination for NHTSA Administrator to
the Senate, and I have called on the President to do this for
months now. We will review this nominee. I am hopeful we will
be able to process him accordingly. NHTSA needs a Senate-
confirmed administrator. It has been almost a year, and I fear
that the trust the public has in this agency has been eroded
greatly.
One of the major concerns that I have is that NHTSA is not
able to recognize these defects fast enough. NHTSA is far too
important for that to happen, and I want to work with NHTSA and
my colleagues on solutions to that.
As you know, Nevada will be producing cars very soon, with
the new Tesla Giga center. We need to make sure that NHTSA can
handle these cars of the future as well as the cars that we
have here today.
So thank you, Mr. Chairman. I look forward to the
testimonies, look forward to this hearing.
Senator Nelson. With the indulgence of the Committee, we
want to get on into the testimony. After the lieutenant, we
will have the next panel. The Chairman will defer his questions
so we can get the members plenty of time to have their
questions. And then we have a third panel, which is the
administration, NHTSA.
So let's get right to it.
Lieutenant, we are certainly appreciative that you would be
willing to step forward.
First Lieutenant, United States Air Force, Stephanie
Erdman, a graduate of the University of Texas system, ROTC
graduate, one of her first duty stations, of which she is a
compliance and testing officer in the Air Force Testing and
Evaluations Command at Eglin Air Force Base.
And if you all can turn the posters, you can start to see
something of the impact. She was driving a 2002 Honda, and this
is what happened to her. The shredded airbag, just like the one
that I showed you here on the left poster. This is what the car
looked like. She had a passenger. You can see the airbag still
inflated in the car.
And, unfortunately--and she has given us permission--when
the lieutenant was being carried to the hospital, that is what
she looked like.
So, Lieutenant Erdman, if you would share with us your
story of what happened.
STATEMENT OF LIEUTENANT STEPHANIE ERDMAN,
DESTIN, FLORIDA
Lieutenant Erdman: Yes, sir.
Good morning, everyone, ladies and gentlemen. My name is
Stephanie Erdman. I am honored to be here today to serve as the
voice for the people who have been forever silenced because of
exploding Takata airbags.
On behalf of everyone who has suffered because of these
defective Takata airbags, I would like to thank the Committee
for holding this hearing. I hope that no other families will
have to go through the terrible ordeal that my family and I
have had to endure because this happened to me.
On September 1, 2013, my life was changed forever. I was
driving my 2002 Honda Civic on Highway 98 near Eglin Air Force
Base, Florida, where I was stationed. I was on my way to get
some groceries with a friend. As I was driving, a car took a
left in front of me, and our cars collided.
When the impact occurred, shrapnel from my car's airbag
shot through the airbag cloth and embedded into my right eye
and cheek. I was instantly blinded on my right side. I felt
gushing blood running down my neck. I was terrified.
When I got to the hospital, they did a CT scan of my face.
The image showed that there was a metallic foreign object which
had punctured and fractured my right nasal bone, and the tip of
the shrapnel had embedded in my right sinus.
Since that day, I have endured multiple surgeries and
therapies. I have more to go still. My vision will never be the
same. I will never be the same.
My accident involved a moderate frontal impact. The
headlights on the front of the vehicle weren't even broken. My
passenger only had mild scrapes and bruises. I should have not
been injured in the shocking and terrifying way that I was.
What happened to me was gruesome. The photo that the EMT
took of me with the shrapnel embedded in my eye is scary to
look at, but I believe it is necessary to grab the attention of
those who have the ability to do something and keep this from
happening to anyone else.
It is easy to think that I am the only one who has suffered
because of this accident, but it has also been exceptionally
tough on my family. They try to be strong for me, and I see it,
but I can tell that whenever I talk about it they are also
hurting. I know I have physical scars about this tragedy, but
people who care about me have scars, as well. They are just the
kind you cannot see.
These companies should have done everything they could.
They claim that they notified customers as soon as they found
out about the problem, that they expanded the recalls as they
learned about each set of additional potentially affected
vehicles as soon as they could. I believe that the facts show
differently.
It has been 6 years since the first recall covering these
deadly Takata airbags. What just started at 3,940 vehicles has
now ballooned into over 7 million vehicles. But the exact same
vehicle in one state is not even recalled in the next state
over. I do not understand how crossing a border simply means
that that vehicle is now safe.
I do not also understand why the dealerships that sell
these vehicles and service them are not notifying customers.
American Honda Motor Company claims that they notified the
Honda-certified dealership where I bought my Civic about the
recall for the driver-side airbag in February 2010. I took my
car into the dealership for service three times after they
supposedly received the information. The Honda dealership never
told me about the recall, they never performed the recall
repairs on my vehicle, and they never warned me about what
might happen if my airbags deployed. They did nothing.
I have also learned that Honda claims they have sent a
recall notice to my house in 2010. They have records showing
that the envelope containing critical information was returned
to them as undeliverable. Instead of trying to notify me in
another way, they did nothing to warn me.
It is in honor of my family and friends who support me so
very much that I ask the Committee to demand real answers. It
is in honor of the families and friends of all who have been
injured by these defective Takata airbags that I ask the
Committee to insist that these companies explain why they
waited so long to identify all of these potentially deadly
vehicles. And it is in honor of those who cannot be here today
because they have been hurt or killed by these dangerous
products that I ask the Committee to get to the bottom of why
these companies did not try harder to warn us.
I am so honored to be here today to have the opportunity to
tell my story, but please understand that I am just one of many
people who have been affected by these deadly airbags. I am
hopeful that Congress will look at a way to improve the recall
notification process. I hope there will be no more mothers
taken from their children or no more fathers blinded by the
exploding airbags. I ask the Committee to do everything in its
power to make sure every vehicle with a defective airbag is
made safe.
Thank you.
[The prepared statement of Lieutenant Erdman follows:]
Prepared Statement of Stephanie Erdman
Ashley Parham. Gurjit Rathore. Hai Ming Xu. And my name is Lt.
Stephanie Erdman.
Thanks to the gracious invitation of the U.S. Senate Committee on
Commerce, Science, and Transportation, I am honored to be here today to
serve as the voice for the people who have been forever silenced
because of the failure of companies to address the dangers of exploding
airbags.
On behalf of everyone who has suffered because of these defective
airbags, I would like to thank the Committee for holding this hearing.
It is my sincere hope that no other families will have to go through
the terrible ordeal that my family has had to endure because of what
happened to me or experience the same kind of terror that myself and
others who have been injured and killed because of these defective
airbags have felt.
On September 1, 2013, my life changed forever. I was driving my
2002 Honda Civic on Highway 98 West near Destin, Florida on my way to
get some groceries with a friend. As I was driving, a car turned left
in front of my Honda and we crashed.
When the impact occurred, shrapnel from my car's airbag inflator
shot through the airbag cloth and embedded in my right eye and neck. I
was instantly blind on my right side. And then I felt gushing blood. It
was terrifying. I thought I was going to bleed out.
When I got to the hospital, they did a CT of my face. The imaging
showed that a metallic foreign body had punctured and fractured my
right nasal bone, and the tip of that shrapnel had embedded itself in
my right sinus. Since that day, I have endured multiple surgeries and
therapy. I have more of them to go. My vision will never be the same. I
will never be the same.
An accident only has to involve a mild impact to trigger the
airbags to deploy. My accident involved a moderate frontal impact. I
should have gotten a few bumps and bruises like the passenger in my
car. I should not have been injured in the shocking and terrifying way
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
What happened to me was gruesome. The photo that the EMT took of me
with the shrapnel in my eye is scary to look at. But I believe it is
necessary to get the attention of those who have the ability to do
something to stop this from happening to someone else.
It is important to me to talk about this problem. It is helpful to
me to talk about it so that I can learn to deal with the trauma that I
had to endure and that still haunts me to this day. Just like I am
haunted by what could have happened if a family member or a friend was
driving my car. I could never forgive myself if this had happened to
one of them in my car.
It is easy to think that I am the only one who has suffered because
of my accident. But it has also been exceptionally tough for my family.
They try to be strong for me, and I see it. But I can tell that,
whenever I talk about it, they are also hurting. I know that I have
physical scars from my tragedy. But the people who care about me have
scars, too. They are just the kind you cannot see.
These companies say they have done everything they could. They
claim that they notified consumers as soon as they found out about the
problem. That they expanded the recalls as they learned about each set
of additional potentially affected vehicles just as soon as they could.
I believe the facts show differently.
It has been six years since the first recall covering these deadly
airbags. What started with just 3,940 vehicles has now ballooned into
more than seven million vehicles on the roads in the United States. But
the exact same vehicle in one state is not even recalled in the state
next door. I do not understand how that is acceptable. I do not
understand how a company can take the position that just crossing a
border means that the vehicle somehow becomes safe.
I also do not understand why the dealerships that sell and service
these vehicles are not notifying consumers. American Honda Motor
Company claims that they notified the Honda-certified dealership where
I bought my Civic about the recall for the driver's side airbag in
February of 2010. I took my car into that dealership for service three
times after they received the recall notice for my car. They never told
me about the recall. They never performed the recall repair on my
vehicle. And they never warned me about what might happen if my airbag
deployed.
I have also learned that Honda claims they sent a recall notice to
my house in 2010. They claim that they have records showing that the
envelope with that critical notice was returned to them as
undeliverable. Instead of trying to notify me another way, they did
nothing to warn me. They did nothing to try and make sure that me and
my family were safe before the accident happened. It was not until
September 4, 2013--three days after my accident--that Honda called and
left a message on my phone about the recall.
It is in honor of my family and friends, whose support means so
very much to me, that I ask the Committee to demand real answers to
questions like these from Takata and from the auto manufacturers that
knew about this problem long before it began ruining lives and taking
lives.
It is in honor of the families and friends of all those who have
been injured by these defective airbags that I ask the Committee to
insist that these companies explain why they waited so long to identify
all of the potentially deadly vehicles.
And it is in honor of those who cannot be here today because they
have been hurt or killed by these dangerous products that I ask the
Committee to get to the bottom of why these companies did not try
harder to warn us about this issue as soon as possible so that no one
else suffers the consequences of their inaction.
I believe in personal responsibility. I believe in admitting that
you are wrong when you are wrong. I believe in holding companies
accountable for their actions. The safety of the American public was
not held paramount by these companies. These companies did not play by
the rules when they failed to timely and fully notify NHTSA and
customers like me about this defect. Something must be done to stop
this deadly trend that we see time and time again in the auto industry.
I am hopeful that NHTSA's recall management division also takes more
responsibility for overseeing recall campaigns so that they improve
completion rates and make sure that all affected vehicles are included.
I am so honored to be here today and to have the opportunity to
tell my story. But please understand that I am just one of many people,
along with their families and friends, who have suffered because of
these defective airbags.
I am hopeful that Congress will look at ways to improve the recall
notification process. I hope there will be no more mothers taken from
their children or fathers blinded so they can never again truly enjoy
playtime with their sons. But I worry that, once all of the attention
that is now focused on these deadly products subsides, these companies
will not follow through with making sure that the defective airbags in
every last one of these affected vehicles are removed. I ask that the
Committee do everything in its power to make sure that each and every
vehicle affected by this defect is made safe.
Thank you.
Senator Nelson. We will do that, Lieutenant.
Lieutenant Erdman: Thank you, sir.
Senator Nelson. You have our promise. And that is why we
had this hearing today. And we want to thank you for the
courage of you stepping forward to come and tell your story.
Between what the lieutenant has said and the pictures, I
think you get the picture. So, with the Committee's permission,
I would like to get right on into the next panel.
Thank you, Lieutenant. You are very kind. Appreciate it.
All right, if we could ask the next panel, please, to come
up.
Mr. Hiroshi Shimizu, he is the Senior Vice President,
Global Quality Assurance, for the Takata Corporation, the
manufacturer of the airbags; Mr. Rick Schostek, Executive Vice
President of Honda North America; Mr. Scott Kunselman, Senior
Vice President, Vehicle Safety and Regulatory Compliance, the
Chrysler Corporation Group.
Gentlemen, thank you for coming. Please be seated.
Mr. Shimizu, we will start with you. You are very
accommodating to speak in English, and this committee
appreciates that. You have with you a translator if there is
any difficulty. And for you making the effort to speak in
English today, we want you to know that we appreciate it.
Mr. Shimizu, please proceed.
STATEMENT OF HIROSHI SHIMIZU, SENIOR VICE PRESIDENT, GLOBAL
QUALITY ASSURANCE, TAKATA CORPORATION
Mr. Shimizu. Thank you.
Chairman Nelson and Ranking Member Thune and distinguished
members of the Committee, my name is Hiroshi Shimizu, and I am
Senior Vice President for Global Quality Assurance for Takata
Corporation. I am honored to appear before this committee to
offer the perspective of Takata Corporation on the important
issues under examination at today's hearing.
Takata's mission is to make products that save lives and
prevent serious injuries. Whenever one of our products does not
perform as expected, it is our first priority to understand the
root causes of the issue. If we identify a problem in our
product design, production, or installation, we do not hesitate
to take the necessary steps to ensure that the problem is
addressed properly and promptly.
All of us at Takata know that the airbag inflator ruptures
that have been the subject of recent recalls involve very
important issues of public safety. Even though millions of
Takata airbags have inflated properly, saving lives and
avoiding serious injuries in hundreds of thousands of
accidents, any failure of an airbag to perform as designed in
an automobile accident is incompatible with Takata's standards
for highest quality assurance.
We are deeply sorry about each of the reported instances in
which a Takata airbag has not performed as designed and a
driver or passenger has suffered personal injuries or deaths.
Our sincerest condolences go out to all those who have suffered
in these accidents and to their families.
Takata is working closely with automakers and the NHTSA to
support the ongoing recalls and the regional field actions. And
we are devoting extraordinary resources to producing quality
replacement kits on the schedule necessary to fulfill all of
the automakers' orders.
We are also devoting extensive efforts and attention to
answering requests for information about these matters from
NHTSA and other investigators. We are committed to being fully
transparent with the government.
Takata strongly agrees with the position stated by NHTSA on
November 9, 2014, that the current focus of the ongoing field
actions and the recalls should remain the specific regions of
high absolute humidity. Our best current information supports
the view that these regions must be the priority for the
replacement of suspect inflators. It is imperative that all
owners of the affected vehicles in these regions respond to the
recall notices at the earliest opportunity.
We are confident that the airbags Takata is producing
today, including the replacements for recalled units, are safe.
We have confidence in the integrity of our engineering and our
current manufacturing processes. We believe that, properly
manufactured and installed, the airbags we are producing today
will work as designed to save lives for the expected life of
the automobiles.
While each instance of an airbag failure is terrible and
unacceptable to Takata, it is also important to remember that
Takata airbags continue to deploy properly as they were
designed to do in real world accidents, and our airbags are
helping to save lives and prevent injuries on the road every
day.
As we move forward, Takata will continue to cooperate
closely with automakers and with governmental regulators, and
we will take whatever actions are determined to be necessary in
the public interest and that will best advance the goal of
safety for the driving public.
Finally, as the Committee is aware, English is not my
native language. I will do my best to answer questions in
English, but I may ask for a clarification and I may need
assistance from my interpreter here from time to time for help
in understanding the Committee's questions.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Shimizu follows:]
Prepared Statement of Hiroshi Shimizu, Senior Vice President for Global
Quality Assurance, Takata Corporation
Chairman Nelson, Ranking Member Thune, and distinguished Members of
the Committee, my name is Hiroshi Shimizu, and I am Senior Vice
President for Global Quality Assurance for Takata Corporation. I am
honored to appear before this Committee to offer the perspective of
Takata Corporation on the important issues under examination at today's
hearing.
Takata's mission is to make products that save lives and prevent
serious injuries. Whenever one of our products does not perform as
expected, it is our first priority to understand the root causes of the
issue. If we identify a problem in our product design, production, or
installation, we do not hesitate to take the necessary steps to ensure
that the problem is addressed properly and promptly.
All of us at Takata know that the airbag inflator ruptures that
have been the subject of recent recalls involve very important issues
of public safety. Even though millions of Takata airbags have inflated
properly, saving lives and avoiding serious injuries in hundreds of
thousands of accidents, any failure of an airbag to perform as designed
in an automobile accident is incompatible with Takata's standards for
highest quality assurance. We are deeply sorry and anguished about each
of the reported instances in which a Takata airbag has not performed as
designed and a driver or passenger has suffered personal injuries or
death. Our sincerest condolences go out to all those who have suffered
in these accidents and to their families.
Takata is working closely with the automakers and the National
Highway Traffic Safety Administration (``NHTSA'') to support the
ongoing recalls and regional field actions, and we have devoted extra
resources to producing quality replacement kits on the schedule
necessary to fulfill all of the automakers' orders. We are also
devoting extensive efforts and attention to answering requests for
information about these matters from NHTSA and other investigators. We
are committed to being fully transparent with regulators and
investigators.
In response to reports of accidents involving ruptured airbag
inflators, the automakers have announced various recalls involving
different models of Takata airbags.
Those recalls began in 2008 when Honda, in consultation with
Takata, initiated a series of recalls for driver-side airbags following
reports of three incidents of inflator ruptures in 2007. These recalls
involved inflators manufactured exclusively for Honda in 2000 and 2001.
From 2007 to 2010, Takata collaborated with Honda to conduct numerous
tests of inflators returned from the field and to review our entire
inflator manufacturing process, and these efforts led to the expansion
of the initial Honda recalls. These recalls of Honda driver-side
inflators focused primarily on specific manufacturing and product-
handling issues we had identified, including issues with the pressing
of propellant wafers at our production facility at Moses Lake,
Washington. We have taken steps to address the specific production
issues identified in connection with these Honda recalls.
From 2009 to 2012, there were a limited number of reports of
inflator ruptures involving passenger-side airbags manufactured from
2000 to 2002. Those reports resulted in a 2010 recall of passenger-side
airbags installed in vehicles that were exclusively sold in Asia.
Separately, several automakers announced global recalls of passenger-
side airbags beginning in 2013. Since then, there have been several
additional incidents of inflator ruptures involving both driver-side
and passenger-side airbags that were not covered by the earlier
recalls. Almost all of these incidents involved vehicles that spent
their lives mostly in areas of high absolute humidity, such as Puerto
Rico and South Florida, and were at least six years old at the time of
the accident.
Our best current judgment is that the root causes of these inflator
ruptures likely involve a combination of three factors: (1) the age of
the unit; (2) persistent exposure over time to conditions of high
absolute humidity; and (3) potential production issues, which we have
worked to identify and address.
Based on this engineering analysis, and at NHTSA's suggestion,
multiple automakers began regional field actions focused on areas of
the United States that experience higher levels of heat and absolute
humidity. Several automakers have recently converted these field
actions into regional recalls. These ongoing regional actions and
recalls are targeted at vehicles sold or registered in Puerto Rico,
Hawaii, Florida, and the U.S. Virgin Islands. Several automakers have
expanded these actions to additional areas along the Gulf Coast and
other coastal areas, including Southern California.
One important function of these regional actions is to retrieve
inflators from the field for purposes of data gathering, testing, and
further analysis. In the past several months, we have tested and
analyzed thousands of returned airbag inflators, both from within the
areas of high absolute humidity and from outside those areas, and we
are working to increase our capacity for testing. We are regularly
sharing the results of this ongoing testing and analysis with the
automakers and NHTSA. So far, these ongoing tests have not shown any
ruptures in inflators retrieved from vehicles outside the areas of high
absolute humidity. The tests have resulted in some failures of
inflators retrieved from within those areas, with some notable
variations in the test results for different models of inflators and
for different makes of automobiles. We are continuing to analyze these
results and to learn from them.
In the meantime, Takata strongly agrees with the position stated by
NHTSA on November 9, 2014 that the current focus of the ongoing field
actions and recalls should remain the specific regions of high absolute
humidity. Our best information supports the view that these regions
must be the priority for the replacement of airbags. It is imperative
that all owners of the affected vehicles in these regions respond to
the recall notices at the earliest opportunity.
Takata has added new production capacity to meet the demand from
automakers for airbag replacement kits needed in response to the
regional actions and recalls. We are currently producing more than
300,000 replacement kits per month and will be increasing those
production levels beginning in January. We believe we will be able to
meet the demand currently expected from automakers for these
replacement units.
We are confident that the airbags Takata is producing today,
including the replacements for recalled units, are safe. We have
confidence in the integrity of our engineering and our current
manufacturing processes. We believe that, properly manufactured and
installed, the airbags we are producing today will work as designed to
save lives for the expected life of the automobile.
While each instance of an airbag failure is terrible and
unacceptable to Takata, it is also important to remember that Takata
airbags continue to deploy properly as they were designed to do in
real-world accidents, and our airbags are helping to save lives and
prevent injuries on the road every day. More than 200 million cars and
light trucks are registered in the United States, and NHTSA has
estimated that around half of one percent of these vehicles experience
an airbag deployment each year. Many of those airbags are Takata
products. That means that Takata airbags help to save hundreds of lives
and prevent thousands of serious injuries every year in the United
States.
As we move forward, Takata will continue to cooperate closely with
the automakers, with NHTSA, and with government regulators in Japan and
around the world to address the potential for inflator rupturing. We
will take whatever actions are determined to be necessary in the public
interest and that will best advance the goal of safety for the driving
public.
Thank you, Mr. Chairman. I will be pleased to answer questions from
the Committee.
Senator Nelson. Of course, you will have that assistance.
And one of the things that we will want you to answer is about
the change to ammonium nitrate and the problems that occurred
thereafter.
Mr. Schostek, now, you are a representative of Honda, being
the Executive Vice President at Honda North America. Also talk
to us about the recalls and the provisions of loaners and/or
rental cars.
Mr. Schostek?
STATEMENT OF RICK SCHOSTEK, EXECUTIVE VICE PRESIDENT, HONDA
NORTH AMERICA, INC.
Mr. Schostek. Thank you, Chairman Nelson, Senator Thune,
and members of the Committee. My name is Rick Schostek. I am
Executive Vice President with Honda North America. On behalf of
more than 28,000 Honda employees in the U.S., 1,300 automobile
dealers, and more than 600 North American suppliers, thank you
for the opportunity to be here today.
I want to begin by expressing our deepest sympathies to
those individuals and families who have been affected by these
tragic incidents. We offer our sincere apologies to the
families of those who have died, to those who have been
injured, including Lieutenant Erdman, and to those who have
been in any way inconvenienced due to the defects in Takata
airbags in our vehicles.
Airbags save thousands of lives each year, but we recognize
that even one customer who is injured or loses their life when
an airbag does not perform as intended is one too many and is
completely unacceptable.
We understand the urgency of the current situation and are
taking proactive steps to encourage Honda and Acura owners to
get their vehicles repaired. Specifically, to meet the needs of
our customers related to these airbag recalls, we have posted
written messages prominently on our websites to reassure our
customers that we have procedures in place to address their
individual needs.
Customers with affected vehicles who desire alternative
transportation until their car is fixed have access to loaner
cars and rental vehicles at no cost to the customer. And we are
working in our service and parts divisions with our dealer
network to ensure that replacement inflators are available
where and when they are needed.
Like many automakers, Honda looked to Takata for the supply
of airbag components because Takata was an internationally
recognized safety systems supplier. As the manufacturer of the
complete vehicle, we relied on Takata for its expertise in this
specific area of technology. We provided our performance
requirements, and Takata designed the airbag components to
those criteria.
Beginning with the 2001 model year, Takata began to supply
Honda with a new generation of airbag components. By 2004, we
had sold several million vehicles equipped with these Takata
airbags. It was then, in 2004, when we learned of an airbag
inflator rupture in one of our vehicles and reported that to
NHTSA. This remained the only airbag inflator rupture we were
aware of until 3 years later.
Since 2007, we have been involved in a safety investigation
of Takata airbag inflators. Takata identified specific
manufacturing issues as the primary factors of the rupture
events.
Starting with a recall in November 2008 and with every
subsequent recall, we gathered component parts from the time
period that corresponded to Takata's manufacturing issues and
provided those to Takata for further investigation.
Additionally, we recalled vehicles that were outside of the
range Takata had identified for the purpose of additional
analysis.
As new evidence identified new risk, Honda acted to expand
our recall population. The investigation process has, since
2007, been designed to replace defective Takata inflators and
also to seek out data using the public recall process. The
investigation continues to this day.
With regard to the 2004 inflator rupture, Takata advised us
that their analysis demonstrated that it had distinctly
different characteristics compared to the ruptures that led to
the first recall.
At Honda, the founding principle of our company places the
highest priority on the quality of our products and the
satisfaction of our customers. Now, today, we are operating
with even greater energy and greater focus to quickly address
our customers' needs and, with every action of our company,
dedicating ourselves to honor the relationship we have with our
customers.
Thank you.
[The prepared statement of Mr. Schostek follows:]
Prepared Statement of Rick Schostek, Executive Vice President,
Honda North America, Inc.
Thank you, Mr. Chairman, Senator Thune and members of the
Committee. My name is Rick Schostek. I'm an Executive Vice President
with Honda North America--a company that works in support of all Honda
companies in North America--and I'm based in Ohio. On behalf of the
more than 28,500 associates working for Honda in the United States, as
well as our nearly 1,300 automobile dealers in the U.S. and more than
600 suppliers in North America, thank you for this opportunity to share
our perspectives on this very serious automotive safety issue.
I want to begin by expressing our deepest and heartfelt sympathies
to those individuals and families who have been affected by these
tragic incidents. It is truly heartbreaking to all of us at Honda. We
offer our sincere apologies to the families of those who have died, to
those who have been injured--including Ms. Erdman--and to those who
have been in any way inconvenienced due to the defects in Takata
airbags in our vehicles.
Airbags save thousands of lives each year. But we recognize that
even one customer who is injured or loses their life when an airbag
does not perform as intended, is one too many, and is completely
unacceptable.
Regarding the multiple recalls we have conducted let me first say
that Honda is a company built upon a commitment to providing
satisfaction to our customers. We take great pride in the quality of
our products, the vast majority of which are built here in North
America. And we stand behind the safety of these products.
We understand the urgency of the current situation, and are taking
proactive steps to encourage Honda and Acura owners to get their
vehicles repaired at an authorized dealership.
We have a well-respected service division dedicated to supporting
our dealers in meeting the needs of each customer throughout the
lifetime of vehicle ownership. Specifically, regarding the effort to
reach out and meet the needs of our customers related to the airbag
recalls:
We have posted written messages prominently on our websites
to reassure our customers that we have procedures in place to
address their individual needs.
Customers with affected vehicles who desire alternative
transportation until their car is fixed have access to loaner
cars and rental vehicles--at no cost to the customer--if we
experience a situation where a dealers' service capacity or the
availability of replacement air bag inflators is insufficient
to meet the customer's needs.
We continue to work with Takata in an effort to increase
parts availability to meet the needs of customers in the
expanded population of recalls.
And we are working within our own service parts division and
with our dealer network to ensure that our existing inventory
of replacement airbag inflators is available when and where
they are needed.
We have dedicated resources to promptly investigate all
reports of potential rupture, contacting owners or their
representatives when we learn of potential ruptures through
media, law enforcement or other sources.
So, we have taken, and continue to take action to address the needs
and concerns of our customers related to the series of recalls in our
vehicles with Takata airbag inflators.
Like many automakers, Honda looked to Takata for the supply of
airbag components because Takata was an internationally-recognized
safety systems supplier. As the manufacturer of the complete vehicle,
we relied on Takata for its expertise in this specific area of
technology. We provided our performance requirements and Takata
designed the airbag components to those criteria.
Beginning with the 2001 model year, Takata began to supply Honda
with a new generation of airbag components. By 2004, we had sold
several million vehicles equipped with these Takata airbags, when we
learned of an airbag inflator rupture in one of our vehicles, and
reported it to NHTSA. This remained the only airbag inflator rupture we
were aware of until three years later.
Since 2007, we have been involved in a safety investigation of
Takata airbag inflators. Throughout this investigation, Takata
identified specific manufacturing issues as the primary factors of the
rupture events. Starting with a recall in November 2008, and with every
subsequent recall, we gathered component parts from the time period
corresponding to Takata's manufacturing issues and provided those to
Takata for further investigation. Additionally, we recalled units that
were outside the range Takata had identified, for the purpose of
analysis.
As new evidence identified new risk, Honda acted to expand our
recall populations. The investigation process has, since 2007, been
designed to replace defective Takata inflators and to seek out data
using the public recall process. The investigation continues to this
day.
With regard to the 2004 inflator rupture, Takata advised us that
their analysis demonstrated that it had distinctly different
characteristics compared to the ruptures that led to the first recall.
Honda has conducted seven recalls and two safety improvement
campaigns in the U.S. related to Takata driver and front passenger
airbag inflators. These actions represent our continued due diligence
and focus on the safety of our customers.
It is our practice to actively communicate with our customers who
own an affected vehicle in order to get them to take immediate action
to have their vehicle repaired. Over and above the required first class
mail notification, we provide multiple notices in English and Spanish,
as well as other means of reaching customers, both directly and
indirectly. We plan to continue these activities for all recalls.
We also have employed other communications techniques in an effort
to increase the completion rate for our recalls. We consulted with the
U.S. Postal Service to try new methods to get people to open their
recall mailings. We also have used overnight delivery. We have called
more than 700,000 hard-to-reach customers by phone, using our customer
relations staff, our dealers, and automated calls.
Based on our efforts, we have experienced completion rates that are
considered high for the recall of older model vehicles. Still, we are
concerned when multiple recall notices go unheeded by some registered
owners. We want our customers to complete each and every recall.
Toward this goal, we would like to offer a suggestion for
consideration that we believe would greatly improve the response rate
to recall notices.
Many states require owners to obtain a tailpipe emissions test
before a vehicle can be registered, and certain states decline vehicle
registration renewals until outstanding emissions recall repairs have
been completed. In a similar way, as the Inspector General commented in
October 2011, if each state required that open recalls related to
safety issues be addressed, if parts are available, before allowing the
vehicle to be registered, this simple step would greatly reduce the
risk of injuries related to unrepaired older model vehicles. Further,
all dealerships and independent repair facilities could be required to
check for, and notify the customer of, any open recalls before
returning a vehicle to the customer. This is something we already ask
all of our dealers to do.
However, at this time, such requirements do not exist in the United
States.
So, Honda will continue to work to alert owners about recalls and
to encourage owners with an affected vehicle to take immediate action
to have their vehicle serviced at their authorized dealership.
At Honda, the founding principle of our company places the highest
priority on the quality of our products and the satisfaction of our
customers. Now, we are operating with even greater energy and focus to
quickly address our customers' needs and concerns and, with every
action of our company, dedicating ourselves to honor the relationship
we have with our customers.
Again, I very much appreciate the opportunity to appear before the
Committee today, and now I will be happy to address your questions.
Thank you.
Senator Nelson. Mr. Schostek, you didn't say anything about
loaners or rental cars.
Mr. Schostek. Mr. Chairman, I believe I did. Customers with
affected vehicles who desire alternative transportation in the
form of loaners or rental cars have them available to them at
no cost.
Senator Nelson. Immediately?
Mr. Schostek. We have them in place now, sir.
Senator Nelson. For all of your dealers across the country?
Mr. Schostek. In the form of loaners, we have expanded our
loaner program, and we also have the option of rental cars. We
will take care of our customers, sir.
Senator Nelson. OK. Let the record show that that has been
said. We have certainly had contrary information to this point.
If that is the case, then I certainly want to congratulate you,
for the obvious reasons.
All right. Mr. Kunselman.
Mr. Kunselman. Yes.
Senator Nelson. Mr. Kunselman, Senior Vice President,
Vehicle Safety and Regulatory Compliance, of Chrysler.
STATEMENT OF SCOTT G. KUNSELMAN, SENIOR VICE
PRESIDENT AND HEAD OF VEHICLE SAFETY AND REGULATORY COMPLIANCE,
CHRYSLER GROUP LLC
Mr. Kunselman. Yes. Thank you.
Chairman Nelson, Ranking Member Thune, members of the
Committee, as stated, my name is Scott Kunselman. I am the
Senior Vice President and Head of Vehicle Safety and Regulatory
Compliance at Chrysler Group. I lead an organization with a
mission of safeguarding our customers--a mission we embrace
wholeheartedly. I would like to thank the Committee for the
opportunity to appear today to discuss this important matter.
Today's automobiles are among the most sophisticated and
complex consumer goods on the market. Auto manufacturers are
more committed than ever to developing advanced safety
technologies to reduce fatalities and injuries resulting from
motor vehicle crashes. On a daily basis, we work to design,
engineer, and manufacture vehicles to withstand a myriad of
operating conditions.
Promoting and ensuring vehicle safety is a responsibility
shared by automakers, suppliers, government, and consumers.
Chrysler Group looks forward to continuing this collective
engagement with Takata and NHTSA to help address the current
situation.
Chrysler Group has been actively engaged with Takata and
NHTSA since Takata first informed us in April 2013 that certain
airbag inflators used by other auto manufacturers may
malfunction on deployment. These inflators, described by Takata
as the alpha population, have since been linked to at least
four fatalities.
This group of inflators has never been used in our
vehicles. Our vehicles were equipped with Takata's beta-
population inflators. And in April 2013, Takata assured us that
the manufacturing nonconformance that led to the alpha-
population recall had been corrected. Chrysler Group engineers
subsequently conducted a follow up investigation and confirmed
the beta inflators benefited from an upgraded manufacturing
process.
In October 2013, we learned that one of our vehicles in
southern Florida was subject to a high-pressure deployment
involving a driver's airbag and causing a personal injury. This
remains the one incident of its kind involving one of our
vehicles. In response to this incident and working with Takata,
in consultation with NHTSA, we launched an investigation and
conducted component testing.
In May 2014, Takata again advised Chrysler Group of four
incidents involving vehicles produced by other auto
manufacturers. Those vehicles were equipped with Takata
inflators similar to the inflators used in our vehicles.
And then in June 2014, this year, Chrysler Group announced
plans to replace beta-population inflators in certain vehicles
registered or purchased in four areas known for high humidity,
a factor believed to have played a role in high-pressure
deployments.
We will begin notifying affected customers on or before
December 19th, when they may schedule service for a
replacement. Our action covers 371,000 vehicles in Florida,
Hawaii, Puerto Rico, and the U.S. Virgin Islands.
It is important to understand the distinction between the
alpha and beta populations. The alpha inflators are associated
with the most severe events, a substantially higher incident
rate, and were found to contain a defined manufacturing defect.
None of our vehicles were built with an alpha-inflator
population.
Again, our vehicles were equipped with beta inflators. In
our vehicles, these are known to have deployed as intended more
than 10,000 times across the U.S. and 830 times in the areas
that I just mentioned that are covered by our field action. As
I previously stated, there is one incident involving a high-
pressure deployment in one of our vehicles. This took place in
Florida, a state covered by the announced regional action.
Chrysler Group continues to work with NHTSA as the
situation evolves and will respond to the agency's most recent
request for additional information, which the company received
on November 18.
In closing, I would like to reiterate our belief that
promoting and ensuring vehicle safety is a responsibility
shared by automakers, suppliers, government, and consumers.
Chrysler Group will continue to work collaboratively with
Takata, NHTSA, and others to address this matter.
I once again extend my thanks to the Committee for
discussing this very important issue.
[The prepared statement of Mr. Kunselman follows:]
Prepared Statement of Scott G. Kunselman, Senior Vice President and
Head of Vehicle Safety and Regulatory Compliance, Chrysler Group LLC
Chairman Nelson, Ranking Member Thune, Members of the Committee . .
. my name is Scott Kunselman and I am Senior Vice President and Head of
Vehicle Safety and Regulatory Compliance at Chrysler Group LLC.
I lead an organization with a mission of safeguarding our
customers, a mission we embrace wholeheartedly.
I'd like to thank the Committee for the opportunity to appear today
to discuss this important matter. As you know, Chrysler's review of our
involvement with Takata airbags is ongoing. Hence, my testimony is
based on my recollection today, and not based on a comprehensive review
of all relevant information under Chrysler's possession or control.
Today's automobiles are among the most sophisticated and complex
consumer goods on the market. Auto manufacturers are more committed
than ever to developing advanced safety technologies to reduce
fatalities and injuries resulting from motor vehicle crashes. On a
daily basis, we work to design, engineer, and manufacture vehicles to
withstand a myriad of operating conditions.
Promoting and ensuring vehicle safety is a responsibility shared by
auto makers, suppliers, government and consumers. Chrysler Group looks
forward to continuing this collective engagement with Takata and NHTSA
to help address the current situation.
Chrysler Group has been actively engaged with Takata and NHTSA
since Takata first informed us in April 2013 that certain air-bag
inflators used by other auto makers may malfunction on deployment.
These inflators, described by Takata as the Alpha population, have
since been linked to at least four fatalities.
They have never been used in our vehicles.
Our vehicles were equipped with Takata's Beta-population inflators.
In April 2013, Takata assured us that the manufacturing nonconformance
that led to the Alpha-population recall had been corrected.
Chrysler Group engineers subsequently conducted a follow-up
investigation and confirmed the Beta inflators benefited from an
upgraded manufacturing process.
In October 2013, we learned that one of our vehicles in southern
Florida was subject to a high-pressure deployment involving a driver's-
side air bag and caused a personal injury. This remains the one
incident of its kind involving one of our vehicles.
In response to this incident, and working with Takata and in
consultation with NHTSA, we launched an investigation and conducted
component-testing.
In May 2014, Takata advised Chrysler Group of four incidents
involving vehicles produced by other auto manufacturers. Those vehicles
were equipped with Takata inflators similar to the inflators used in
our vehicles.
In June 2014, Chrysler Group announced plans to replace Beta-
population inflators in certain vehicles registered or purchased in
four areas known for high humidity--a factor believed to have played a
role in high-pressure deployments. We will begin notifying affected
customers on or before December 19th when they may schedule service.
Our action covers approximately 371,000 vehicles in Florida, Hawaii,
Puerto Rico and the U.S. Virgin Islands.
It is important to understand the distinction between the Alpha and
Beta populations. The Alpha inflators are associated with the most
severe events, a substantially higher incident rate, and were found to
contain a defined manufacturing defect. None of our vehicles were built
with an Alpha-population inflator.
Our vehicles were equipped with Beta inflators. These are known to
have deployed as intended more than 10,000 times in our vehicles across
the U.S., with 830 of those deployments occurring in the regions
affected by our field action. As I previously stated, there is one
incident involving a high-pressure deployment in one of our vehicles.
This took place in Florida, a state covered by our announced regional
field action.
Chrysler Group continues to work with NHTSA as this situation
evolves and we will respond to the agency's most recent request for
additional information, which the company received on November 18.
In closing, I would like to reiterate our belief that promoting and
ensuring vehicle safety is a responsibility shared by auto makers,
suppliers, government, and consumers. Chrysler Group will continue to
work collaboratively with Takata, NHTSA and others to address this
matter. I once again extend my thanks to the Committee for discussing
this important issue.
Senator Nelson. Was that airbag deployment in south
Florida, was it alpha or beta?
Mr. Kunselman. It was from the beta population.
Senator Nelson. And, therefore, of those that are in your
vehicles, are you providing loaners and rental cars until they
can get it fixed?
Mr. Kunselman. As we deploy our field action, we will have
rental cars available to those who need them.
What I would reiterate, our number one goal, as you
suggested at the opening, is to have the parts available and
quickly service the product. That is our number-one goal. When
that can't be accomplished, we will make loaner cars available.
Senator Nelson. You said that is not until the middle of
December.
Mr. Kunselman. We will launch that in the middle of
December when the parts are available to initiate this action.
Senator Nelson. So do they get loaners and rental cars in
the next 3 weeks?
Mr. Kunselman. In these 3 weeks' time, concerned customers
can contact us through our hotline, and we will on a case-by-
case basis address those needs.
Senator Nelson. Thank you for making that clear.
Mr. Kunselman. Yes, sir.
Senator Nelson. Senator Thune?
Senator Thune. Thank you, Mr. Chairman.
Mr. Shimizu, you mentioned in your written testimony that
you have confidence in your current engineering and
manufacturing processes. My question is, what changes have you
made to your manufacturing processes that give you the
confidence to testify that the replacement Takata airbags are,
in fact, safe?
Mr. Shimizu. Senator, let me explain about the history of
the recall--series of recalls.
Since the 2007 or 2008 time period we have identified some
issues identified, we identified the root cause of the issues,
and we addressed these issues to fix the problems at the same
time as we did the recall. Every time it happens, we identify
the problems, we address all issues, and they are taken care
of.
And currently we believe the products we are producing
right now are coming from the weather-controlled manufacturing
processes. And we believe these products will work as designed
and are safe.
Senator Thune. What change have you made in that process
that leads you to believe that?
Mr. Shimizu. Yes. There are two major causes of the
problems, according to what we studied in the past instances.
One is density issues. The propellant was pressed from the
powder, and we controlled the compression force to get the
certain density. However, at that time, in the beginning of
production, the compression force control did not work well and
as we expected, according to investigation. So we changed the
press machine, and now the new press machines can control the
compression force for each cylinder.
And then, at the same time, also, we have the device called
auto-reject device, which, if the compression force is not as
designed, then it would detect that failure and the auto-
rejection device would reject this propellant. So this device
will take care of the issues of compression force, or you can
say density issues.
And the other one is humidity control. Ammonium nitrate is
a material that has many advantages to its use; however, as is
well known, it is sensitive to the humidity. So we put some
special control of the humidity during the processes of
propellant manufacturing and also inflator assemblies.
However, because the handling issue existed in the past and
also the humidity controls is well enough, so since then, we
have controlled the humidity during the process in the plant
much tighter, so maybe, since then, we can control the humidity
much better while we are manufacturing the propellant and the
inflators.
Senator Thune. There are media reports, as I referenced
earlier, that Takata may have been aware of the dangerous
airbag defects as early as 2004. I know Takata has denied those
allegations in the media, but we need answers from an
independent source about when Takata became aware of the airbag
defect and whether the defect was concealed from NHTSA.
As you know, General Motors commissioned an internal
investigation and released a public report on the ignition
switch issue. Will Takata initiate an investigation and release
a public report about whether there was any wrongdoing?
Mr. Shimizu. According to the record of communication I
confirmed, the date was May 2005 when we learned of the 2004
incident. And it was a communication including pictures also.
That was the first time, according to my understanding, we
started investigation of that incident. This was 2005.
And if there was any communication with the automakers
before that point, I am not aware of that because I was not
directly involved. But, again, the record I confirmed shows the
date as May 2005.
But, at that time, only pictures were available, no actual
airbag model--the inflator was not available at this point. So
we checked the pictures and we checked the production record,
and, at that time, definitely the picture shows an anomaly.
However, the record we checked doesn't show any system error.
And then we reported back to the automakers.
Senator Thune. Will you initiate an independent
investigation? I know you are talking about some of the things
that you looked into, but there is a real concern that Takata's
action here is not as independent as it should be.
Have you given thought, or would you initiate some sort of
an independent investigation, where someone outside the company
takes a look at these things and reports back regarding whether
or not there was wrongdoing? If not, why wouldn't you do that?
Mr. Shimizu. Senator, since I was not directly involved at
that time, I can't answer your question.
Senator Thune. I understand at that time you were not
involved. My question is, prospectively, does it make sense to
have an independent investigation similar to what General
Motors did with the ignition switch issue?
Mr. Shimizu. Yes, Senator, I agree with that. And that is
actually the reason we asked an independent research center to
check our materials and processes too. So, actually, we are
doing recently, but maybe not at that time.
Senator Thune. All right. We can revisit that issue.
Very quickly, if I might, Mr. Chairman, Mr. Schostek, as we
heard from Lieutenant Erdman, she referenced that her vehicle
was serviced multiple times at dealerships after the recall but
prior to the tragic accident. Is there some policy under which
your dealers must notify a customer of safety matters when
someone brings a car in like that? She didn't receive
notification until 3 days after her accident.
Mr. Schostek. Indeed, Senator Thune, there is such a
policy. And we failed Lieutenant Erdman, and our dealer failed
Lieutenant Erdman. You heard her speak about notifications from
Honda that she did not receive, so we did not effectively get
word to her of her recalled vehicle.
In addition, as she told you, she brought the car to a
Honda dealer for other service. Her VIN number was not checked,
and, as a result, we lost opportunities to repair her vehicle.
We failed Lieutenant Erdman, and the dealer failed Lieutenant
Erdman.
We have a policy--our dealers are independent franchisees,
as you know. We communicate to them regularly about the
importance of checking each car when it comes in for service to
see if there are any outstanding recalls. We communicated that
in March of this year. We have communicated that a week or so
ago. Very often we are doing that.
If you would also look at the complete testimony I made, we
are endeavoring to continuously improve the way we reach out to
customers. I have to say, the populations involved in these
recalls are older vehicles. It is harder to track down the
current owner.
That is not an excuse. We have to do better. We failed
Lieutenant Erdman; our dealer failed Lieutenant Erdman.
Senator Thune. Because there are older vehicles, it would
seem that the ideal time to provide notice is when somebody
brings a vehicle in for service.
Mr. Schostek. I agree, Senator Thune, that, to our
everlasting regret, we missed those opportunities.
Senator Thune. The mail is not the most effective way to
get that message out there and these dealerships may be
dropping the ball. So I am interested in knowing what you and
Mr. Kunselman, with Chrysler--what the current policy is, and
what you intend to do to improve notice in the future.
My time is up, Mr. Chairman, but if I could get Mr.
Kunselman to respond quickly to my question on what Chrysler's
current policy is and what it plans to do differently?
Mr. Kunselman. Certainly.
Similar to what Mr. Schostek said, our policy clearly is
to, through the dealership, communicate to consumers when they
come to the dealership what open recalls are on their vehicle.
In fact, the electronic systems that are available that
identify the vehicle as it enters the dealership automatically
has this information. It is readily available; they don't have
to work very hard to find it.
It is our policy that they not only communicate but make
every effort not to have that consumer leave the dealership
without scheduling or performing that service on site.
Senator Thune. Thank you.
Thank you, Mr. Chairman.
Senator Nelson. Mr. Kunselman, I would suggest that the
next 3 weeks might be critical and that you all need to be
forward-leaning on that.
And, Mr. Schostek, thank you for stepping forth and taking
some responsibility, specifically with regard to the
lieutenant.
And, Mr. Shimizu, I would urge you, as Senator Thune has
requested--and this committee will follow up--that this
independent inquiry be quick and swift and public.
Senator Klobuchar?
STATEMENT OF HON. AMY KLOBUCHAR,
U.S. SENATOR FROM MINNESOTA
Senator Klobuchar. Thank you very much, Mr. Chairman.
Thanks for holding this hearing.
And thank you to our witnesses.
I wish to say that I really believe there has to be a full
investigation of what happened here. And I say this on behalf
of a victim in my state, Shashi Chopra, who was driving in her
car in North Oaks, Minnesota. It was a 2002 BMW, but this
actually happened in 2013. And there had not been a recall. And
that airbag exploded in her face, and she is permanently blind.
And so that is why this looking back and trying to figure
out what happened is very important to me. Why did it take
Takata years to disclose the danger of the defective airbags
despite numerous red flags? When did Takata know that the
defective part was not limited to certain Honda vehicles? And
did Takata conduct secret tests on those airbags and not report
the findings?
So, to me, those are really key questions on behalf of this
constituent, in addition to the fact of how NHTSA handled this,
which I am sure we will be dealing with with the next panel.
So my first question, Mr. Schostek, is: Honda has been
aware of these airbags for years, and you issued the first
recall back in 2008, and since then it has been expanded
multiple times. Why do it that way? Why doesn't Honda just
order one expansive recall from the outset and avoid these
additional recalls?
Mr. Schostek. Yes, Senator. In 2007, we saw a series of
inflator ruptures, defects, and began our investigation. In
working with Takata, they identified specific manufacturing
problems in their manufacturing plants that were related to the
time that those inflators were produced which we put into our
cars.
We recalled based on that information. We expanded the
recall when another different manufacturing issue was brought
to our attention by Takata. And, in all, we did four recalls
from 2008 through 2011.
I think it is important for the Committee to understand
that those four recalls which we did had no geographic
boundary. They had no geographic boundary. And the injuries
that have occurred from ruptured--there have been 45 injuries
because of ruptures in Honda vehicles. Forty-three of those
correlate to the time of those Takata manufacturing concerns.
And, to our regret, all four fatalities correspond to that same
time.
So we are talking about recalls that were done 2008 to 2011
because of different manufacturing issues that Takata made us
aware of and where there was pretty strong data that shows this
is where the majority of the problems have been occurring. And
those recalls were not geographic----
Senator Klobuchar. I understand. Yes, I wasn't saying they
were regionally limited. It is just that you have these recalls
after recalls after recalls when clearly there are these red
flags. And the reason it matters so much to this constituent
who is permanently blind is that, when this was in 2013, it
just seems--and it is a different manufacturer.
Mr. Schostek. I understand.
Senator Klobuchar. But if Takata had done a more global
look at what was happening--by ``global'' I mean in all their
airbags--I don't think this would have happened.
So I get to you, Mr. Shimizu. And that is, a November 6th
New York Times article reported that Takata secretly conducted
tests in 2004 at your Auburn Hills, Michigan, location in
response to the release-of-metal-fragments issue with the Honda
Accord. And, according to the article, two of the steel
inflators allegedly cracked during the test, and Takata
executives ordered the testing data deleted and the airbag
inflators destroyed.
Takata has disputed the report, saying the story was based
on some misunderstandings. What specifically about the report
was inaccurate?
Mr. Shimizu. Yes, Senator. Again, regarding the incident of
a Honda vehicle in 2004, according to my knowledge, Takata was
informed in May 2005. And so there was no way we could do any
tests related to that 2004 incident beforehand.
And, also, the series of incidents is happened in 2007, and
at that time actually we started an investigation to identify
the problems. At that time, we had a series of tests of
inflators, and all test results since 2007, the starting point
of the investigation by us, are shared with automakers and also
NHTSA.
Senator Klobuchar. OK. So just to get to the--we can go
back to 2004 another time or in writing, but my issue is my
constituent got blind in 2013.
So, in 2010, BMW sent a letter to NHTSA that it was aware
of the Takata airbags under Honda recalls--and, of course, she
was driving a BMW--but that it had received documentation from
Takata indicating that BMW vehicles were not affected.
So what documentation did Takata provide to BMW? Because,
remember, this is post-2007 now. We are not back in 2004; we
are in 2013.
So I am asking specifically about BMW. And if you don't
know, you can send it to me later, but I would like to know
what documentation was provided to BMW about their situation.
Because they told NHTSA that they knew about these problems
with Honda's recalls, but they had received documentation from
Takata indicating that BMW vehicles were not affected.
Mr. Shimizu. Senator, can I confirm one thing? Is it a
driver-side airbag module you are talking about?
Senator Klobuchar. I believe that this was the driver's
side, yes.
Mr. Shimizu. Yes. Let me answer based on what I know.
We did the recall of the Honda vehicles at that time, and,
as you mentioned, Senator, multiple times, is inflator code
PSDI. And it is a dual-stage driver-side inflator. At that
time, the inflator we supplied to BMW is a PSDI-4. And the
PSDI-4 is a different construction of the inflator. It
completely looks same from outside but is different from PSDI
and produced in a different line.
So that is the major reason, is that the PSDI was recalled
but we answered to BMW that the PSDI-4 is a different structure
so it won't be----
Senator Klobuchar. OK. And so when did you--this is my last
question. When did you become aware that there were problems
with the BMW airbags?
Mr. Shimizu. I am sorry, I am not familiar with--I don't
know the actual date.
Senator Klobuchar. All right. Thank you.
Senator Nelson. Just so it is clear to everybody what we
are talking about, this is the middle of the steering wheel.
This is the inflator and it fits in there. And then when the
impact occurs, the explosion is supposed to come this way. But,
as we said earlier, if the explosive force is too great, it
breaks off this metal, and the metal starts coming through the
middle.
Every one of us at this hearing table have had constituents
affected by this. In Florida, right in central Florida, we have
had one death. And in the case of Corey Burdick, a fireman, a
firefighter, he has no eye now for the rest of his life. Very
similar to the situation of the lieutenant, but, in this case,
the metal had penetrated his actual eye. So this is why we are
so concerned about this and to get to the bottom of this.
Senator Ayotte?
STATEMENT OF HON. KELLY AYOTTE,
U.S. SENATOR FROM NEW HAMPSHIRE
Senator Ayotte. I want to thank the Chairman and Ranking
Member for holding this very important hearing.
I wanted to follow up, Mr. Shimizu, on a question that
Senator Klobuchar had asked you about with regard to the report
in The New York Times about the 2004 secret tests by Takata.
As I heard your testimony in response to her question, you
said that Takata wasn't informed until 2005 about a particular
incident. And what incident was that?
Mr. Shimizu. It was an incident that happened in 2004 in a
Honda vehicle. And according to my information, the driver was
injured.
Senator Ayotte. OK. And then you said that there were a
series of incidents in 2007 that prompted an investigation
within Takata?
Mr. Shimizu. Yes.
Senator Ayotte. When was NHTSA first notified of any of
this?
Mr. Shimizu. According to my knowledge, there were three
incidents that happened during the year of 2007. That is the
actual three to deeply investigate the root cause of the
problems.
Senator Ayotte. With the 2005 incident, was there any
investigation conducted within Takata?
Mr. Shimizu. We did. We received the picture, not the
actual module, but we received the picture, and our engineers
checked the picture and also production record based on the
serial number provided. And then, as I said, our engineer
recognized an anomaly from the picture. However, the production
record didn't show any system error or any abnormality from the
production record.
And, at that time, there was not enough technical evidence
at the time that we believed it required the further
investigation or action at that time.j
Senator Ayotte. So you didn't take any further steps to
investigate the anomaly that your engineers saw. Did you report
it to anyone, or did you talk to NHTSA about it or Honda or
anyone else?
Mr. Shimizu. According to my understanding, we didn't
inform NHTSA at that time, but we reported back to Honda.
Senator Ayotte. Throughout this, I would like to understand
whether Takata believes that, as it receives reports--and I
would like to also inquire of Mr. Schostek of Honda.
When it received reports of both incidents of injury and
unfortunately these horrible incidents of death, when do you
believe that you reported them to NHTSA? And do you believe you
have complied with the TREAD Act?
Mr. Schostek. Do you want me to answer that, Senator?
Senator Ayotte. Yes.
Mr. Schostek. And, if I might, to supplement the discussion
you have been having with Mr. Shimizu, the first event of a
rupture in a Honda vehicle occurred in 2004. We received notice
of that event through our legal department in May 2004. We are
still checking our records, but, as Mr. Shimizu said, what we
can find now is that we provided that information to Takata in
2005. We did report that 2004 event on our TREAD report, which
is provided to NHTSA.
As we were discussing, in 2007 there were several events,
and it was at this time that we and Takata engaged in the
beginnings of an investigation. Ultimately, in that
investigation, Takata made us a presentation that showed the
2007 events and the manufacturing deficiencies that caused the
defect and also compared it to that 2004 event.
The 2007 event, those manufacturing times clearly show
improper density in the inflator propellant. The 2004 event,
ultimately it was fully investigated, and it shows a proper
density for the inflator propellant.
So it is not an excuse, Senator, but that information we
could have gleaned maybe sooner in 2004 would not have helped
us predict the events in 2007. As I look back on our activity,
I think we acted with urgency, but do I think we could have
moved faster in some respects? I absolutely do.
Have we met our obligations to report under TREAD? We have
not. And I think as the Committee may know, we have an ongoing
internal review about that process and that information is due
to be provided by Honda to NHTSA this coming Monday. We will
provide it on time, and we will share with them any gaps or
deficiencies in our TREAD reporting at that time.
Senator Ayotte. So I know that my time has expired here,
but let me just say that I echo the comments of my colleagues.
This really does warrant a thorough investigation, because
these timeframes, the reporting requirements, the questions
that have been raised.
And, as you know, GM undertook this activity with regard to
the ignition switch, and, given the seriousness of this matter,
I would think that Takata and Honda would want to undertake the
same. So let me urge you to do that, as well.
And my time is up, but, Mr. Kunselman, let me just say I am
troubled about the December 19 piece because I think you
should, instead of waiting for people to call you with
concerns, should affirmatively reach out to your customers
while they are waiting till December 19, regardless of how you
view the beta airbag differently than the alpha. So I think
that--I am very concerned about that December 19 date.
Thank you.
Senator Nelson. Thank you, Senator Ayotte, for underscoring
that point.
Senator Heller?
Senator Heller. Mr. Chairman, thank you, and to the Ranking
Member, thank you also for having this and holding this
hearing.
Mr. Shimizu, I did read your testimony, and it does discuss
your anguish, and I can understand that, your commitment to
address this issue properly and promptly. However, I think
there was something that was amiss in your testimony, and that
was that nowhere does it say that Takata takes full
responsibility.
So I want to ask you right now, does Takata take full
responsibility for this tragic defect?
Mr. Shimizu. Excuse me, can I ask my interpreter to confirm
your question?
Senator Heller. Sure.
[Confers with interpreter.]
Mr. Shimizu. Senator, can I confirm the tragedy this time--
which tragedy are you talking about?
Senator Heller. I am talking about the five deaths.
Mr. Shimizu. Oh, five deaths.
Senator Heller. Do you take full responsibility for those
tragic deaths? Does Takata take responsibility?
Mr. Shimizu. Excuse me.
[Confers with interpreter.]
Mr. Shimizu. I understand. We recognize the three victims'
case as relating to our products during accident. But to my
understanding, two others are still under investigation. So----
Senator Heller. So, OK, let's take the three. Does Takata
take full responsibility for those three deaths?
Mr. Shimizu. My understanding is that our products in this
accident were anomalies. So that caused an accident. From that
sense, yes.
Senator Heller. OK.
Mr. Schostek, I got a phone call from my wife. Recently, a
``Good Morning, America'' piece was done on this issue. And she
is probably doing what every parent is doing in America today.
We happen to own a 2007 Honda Civic. And we didn't buy it
brand-new, so we probably didn't get recall notices on that.
And my wife would remember if she did.
And I am going to give to you the same question that she
asked me. If our 18-year-old daughter were to drive that car
today, a 2007 Honda Civic, would she be safe?
Mr. Schostek. Senator, we have several different analyses
of what the problems are with these airbags in our vehicles.
As I mentioned before, the recalls that we did in 2008
through 2011, we have connected those to Takata manufacturing
issues, and we urge customers--and those have no geographic
limits--we urge customers to get those vehicles repaired
because there is a risk. There is a risk.
With regard to the more recent regional recalls, where
there is not as much information available as to what is the
cause of the ruptures in the airbag--that is where there is a
concern about humidity, and we have the same concern about
humidity. We looked at the 45 injuries that have occurred; 17
of them have occurred in Florida, also Puerto Rico and Texas.
The large majority of these issues are occurring in southern
areas.
So we are trying to understand if there is any additional
risk out there. And when we find risk, we act to recall. It is
our responsibility to recall those vehicles when we find risks.
Senator Heller. As a parent, we did run the VIN number
through NHTSA's site, and they said that a 2006 or earlier
vehicle would have been subject to the recall but not 2007.
How can you assure me today that a 2007 vehicle is safe for
any young adult on the road to drive today?
Mr. Schostek. Senator, with your indulgence and
understanding that I am not sure of all the exact models as I
sit here in terms of the breakpoints in the recalls, if that
vehicle was subject to a recall, we want it fixed. If that
vehicle was not subject to a recall, we have not determined
risk, so we would deem it safe for the driver.
[Mr. Schostek sent the following letter to Senator Heller
the next day:]
Honda North America, Inc.
Washington, DC, November 21, 2014
Hon. Dean Heller,
United States Senate,
Washington, DC.
Dear Senator Heller:
I want to follow up our discussion yesterday morning about the
safety of your daughter's 2007 Civic. I hesitated to respond to your
question only because I did not have readily available the details of
the specific recalls, if any, applicable to your daughter's vehicle. I
have now had a chance to look into that question.
The driver's airbag inflator in your daughter's vehicle was not
made by Takata. It was made by Autoliv. The passenger airbag inflator
was manufactured by Takata, specifically a PSPl-X model. We are unaware
of any field ruptures of the PSPl-X inflator. It has not been subject
to any recall or service campaigns in any part of the country.
Incidentally, you should know that my own daughter, who lives in
Tennessee, drives a 2008 Civic. It is equipped with precisely the same
airbags. My wife and I are comfortable with her driving the car.
I want you to know that Honda is committed to addressing the needs
and concerns of our customers and making clear that we stand behind the
safety and quality of our products. It is our priority to always act
within the best interests of our customers.
Sincerely,
Rick Schostek,
Executive Vice President.
Senator Heller. We had a conversation earlier in my office,
and you said it was difficult to determine the safety of the
device because of propriety reasons.
Would I be accurate in assuming that you can't be assured,
100 percent assured, not knowing that the necessary changes
were made in these airbags?
Mr. Schostek. Senator Heller, we are not chemical
propellant experts at Honda. There is proprietary technology
involved.
There have been improvements made by Takata as time has
gone on. For example, there are differences in the shape of the
propellant wafer. I am not an engineer. To me, as a layperson,
it makes sense that that different shape may result in a better
manufacturing process.
But, respectfully, Senator, I would defer questions about
the intellectual property and the proprietary aspects of the
chemistry to Takata.
Senator Heller. Thank you.
Mr. Chairman, my time has run out, but I think I represent
every parent across America, concerned with their young adults
and the cars that they are driving today, as to whether or not
they have an airbag sitting in front of them today that may
cause severe injuries, as we have heard in testimony today, and
even death.
So, anyway, thank you.
Senator Nelson. Senator Heller, let the record show that
the pauses that occurred to your two direct questions to the
two gentlemen, that those pauses, I can say for this Senator,
were painful. And perhaps on the basis of Mr. Schostek's
response, you better tell your daughter not to drive south in
her Honda.
Senator Markey?
STATEMENT OF HON. EDWARD MARKEY,
U.S. SENATOR FROM MASSACHUSETTS
Senator Markey. Thank you, Mr. Chairman, very much.
In the audience today is Kim Kopf. Kim is sitting right
over here. Her sister was killed in Arizona in November 2003
sitting in the passenger side of a Subaru model that contained
defective Takata airbags. But that Subaru model has only been
recalled in humid states, which Arizona certainly is not.
So my first question to you is, Mr. Shimizu, would you,
first of all, right now, given your testimony, agree with the
position that NHTSA has taken, recalling--you have said so far
that Takata strongly agrees with the position stated by NHTSA
that the recalls be limited to the so-called humid states.
But on Tuesday, NHTSA finally changed its position and
called for a nationwide recall of all impacted driver-side
Takata airbags. Does Takata support NHTSA's new nationwide
recall?
Mr. Shimizu. I understand NHTSA's change from regional
recall to national recall. The reason behind is, I understand,
one incident that happened in North Carolina. And----
Senator Markey. Do you agree or disagree with NHTSA's call
for a nationwide recall, Mr. Shimizu?
Mr. Shimizu. Senator, it is hard for me to answer ``yes''
or ``no.'' So if you allow me----
Senator Markey. It is not hard for you to answer ``yes'' or
``no.'' Do you support the nationwide recall of airbags that
the Department of Transportation has issued, yes or no?
Mr. Shimizu. Again, Senator, if we identify the Takata data
from any incident to support NHTSA's new directions, then we
will definitely work together with NHTSA and automakers to take
care of the issues.
Senator Markey. I am going to take that as a no, you do not
agree with the decision by NHTSA. And I just think you are
plain wrong here. And I think that it is very disturbing, I
think, to any American family who has a vehicle with a Takata
airbag to think that that is your position today after all that
we have learned. I think that your company is making a big
mistake in not supporting this recall wholeheartedly.
Now, let me move on, if I can, to you, Mr. Schostek, and
you, Mr. Kunselman. Kim Kopf's sister was killed with a
passenger-side bag. And I think that there is kind of a
roulette-like quality to this, hoping that the airbag that was
installed in people's cars was on the driver's side--that is
now being recalled--but not the passenger's side.
I don't think that is right. And I don't think anyone
should have to worry that any of their family members are in
danger. Kim Kopf has lost her sister forever.
Does Honda support a recall of passenger-side bags, as
well, given what we now know about the ticking time bombs that
each one of these airbags potentially is as a risk to American
families?
Mr. Schostek. Senator Markey, there are two confirmed
airbag ruptures in testing--passenger airbag inflator
ruptures--in Honda vehicles. We have not experienced any
injuries.
They are part of the SIC, or the safety improvement
campaign. We have actually recalled passenger airbags in 10
states. We are actively working on that right now. Again, those
are concentrated in the humid areas----
Senator Markey. Do you support passenger-side recalls that
would be the equivalent of the driver-side recalls for these
airbags, Mr. Schostek?
Mr. Schostek. We support passenger-side--we have ongoing a
passenger-side airbag recall. And, for us, the key is to
understand what the technical information is that----
Senator Markey. Do you support not a voluntary or
geographic recall but a nationwide recall of passenger-side
bags, yes or no, Mr. Schostek?
Mr. Schostek. As to a national recall, we have not refused.
We are actively considering that, Senator Markey. Right now,
our priority is in the southern states.
Senator Markey. You should be saying ``yes'' right now to
that, Mr. Schostek.
Mr. Schostek. Sir, we----
Senator Markey. Mr. Kunselman, for Chrysler, yes or no, do
you support a nationwide recall? Not voluntary, not geographic,
nationwide. Do you support it, yes or no?
Mr. Kunselman. Respectfully, Senator, I want to point out
that the answer to this question obviously is one that we
interact with NHTSA on and make decisions quickly based on the
data. I haven't received that specific request, but I would
respond quickly using our rigorous internal process to make
that decision in a 5-day period.
Senator Markey. Look it, these airbags are the same,
whether they hurt the lieutenant or they killed Kim Kopf's
sister. They are the same. And they should be recalled. And
each of you should be today saying that you support that
wholeheartedly.
Thank you, Mr. Chairman.
Senator Nelson. Thank you, Senator. Thank you for making it
so direct, yes or no, just like Senator Heller did, as well.
Senator Blumenthal?
STATEMENT OF HON. RICHARD BLUMENTHAL,
U.S. SENATOR FROM CONNECTICUT
Senator Blumenthal. Thanks, Mr. Chairman.
You know, I know that you are here in good faith, so I hope
you won't take anything I am going to say personally. But, you
know, it strikes me that these airbags failed, but the system
failed equally, if not more.
And, first of all, I want to join Senator Markey in his
calling for a national recall of all cars with these airbags on
the passenger as well as the driver's side. We have made that
point previously, he and I.
I am also calling on the Secretary of Transportation to
immediately accelerate the replacement process, looking
forward. At the current rate of production by Takata of 300,000
airbags a month, there is no way that there are going to be
sufficient products available.
So I ask you, will you cooperate in an accelerated
replacement process so that competitors of Takata will be
called upon to supply those products instead of Takata?
To each of the--Mr. Schostek and Mr. Kunselman.
Ms. Kunselman. I can start.
Obviously, I mention again that we have an obligation to
our customers. Accelerating the production of parts and getting
this process done quicker is directly----
Senator Blumenthal. And so that is a ``yes.''
Mr. Kunselman. I agree.
Senator Blumenthal. And, Mr. Schostek, will you take non-
Takata parts to replace those airbags?
Mr. Schostek. Senator, we want to get these cars fixed. The
safety of our customers is the highest priority. All options
are on the table. We will look at every option.
Senator Blumenthal. Well, I am going to ask the Secretary
of Transportation to order that you do so, but I hope you will
cooperate.
You know, when I say the system failed, we are here because
of delay, nondisclosure, as well as potential deception, and
concealment. In fact, both of your companies entered into
settlements that were deliberately and purposefully concealed
in court orders.
Damian Fernandez in Florida, Ashley Parham--the first in
2006; Ashley Parham in Oklahoma City in 2009; Jennifer Griffin,
Orange County, Florida, 2009; Gurjit Rathore, Virginia, 2009;
Kristy Williams in Georgia, 2010. The first was driving a
Chrysler. The others were driving a Honda. Your companies
settled with them.
If that information had been made public, more people would
know about this deadly defective airbag and fewer people would
have been killed. Do you agree?
Mr. Kunselman. Respectfully----
Senator Blumenthal. Mr. Kunselman and Mr. Schostek.
Mr. Kunselman. Respectfully, I would highlight that that
incident did occur in the fall of 2013. I highlighted it in my
opening statement. And while it is our policy when we enter
into confidential settlement terms, the existence of that
incident was not concealed in any way. It was----
Senator Blumenthal. But the details were. And the devil and
the death was in the details here. Don't you agree?
Mr. Kunselman. I would ask for a definition of ``details,''
respectfully.
Senator Blumenthal. Well, the details of how and why and
what the role of the airbag was in that crash.
Mr. Schostek, do you agree?
And let me ask both of you, will your companies commit to
declining from now on to enter into these kinds of secret
settlements and concealing the facts surrounding crashes that
result from defective products?
Mr. Schostek. Yes, Senator. Two of the cases that you cite,
with Ms. Parham and Ms. Rathore, we provided information about
those inflator ruptures to NHTSA. We have talked about them to
Takata----
Senator Blumenthal. But not to the public. Your company
deliberately concealed the facts that otherwise would have been
known to the public as a result of this court action.
Mr. Schostek. I respectfully disagree. Ms. Rathore's case
was reported in the TREAD material. I understand your point
that Ms. Parham's was not. But we were in talking to NHTSA 16
days after that TREAD report was due, giving them all the
information we had about inflators.
With respect to confidential settlements, our legal system
recognizes confidential settlements, but we do not intend to
hide behind settlements. The safety information that comes out
during lawsuits should be available to NHTSA, and, as
appropriate, we could support the principle of other government
entities as well.
Senator Blumenthal. Mr. Shimizu, I want to show you some
standards that are used in testing American cars. These are
standards used to test; they are specifically required by our
American law to test.
Were those standards used prior to the sending of those
airbags to these American companies?
Mr. Shimizu. I am not familiar with this, but I am sure the
responsible person in the company knows about this.
Senator Blumenthal. Well, someone in your company knows
about it, but you don't know whether those standards were used?
Mr. Shimizu. Not in detail.
Senator Blumenthal. Well, I would like to get an answer
from you in writing after this hearing that these standards--
they are U.S. car--24 standards. They apply to the substances
used in the airbag, the hermetic sealing of those airbags to
protect them from moisture.
You are unable to provide this committee an assurance that
those standards were used and applied. I want to know from
someone in your company, under oath, whether those standards
were applied to every airbag design, in other words if the
designs were changed over the years, and whether they were
tested with those standards when there were reports of defects.
Mr. Shimizu. Senator, yes, if you allow me, I will talk to
our responsible engineers, and then I will get back to the
Committee as soon as possible. Is this acceptable?
Senator Blumenthal. Thank you.
And let me just conclude. I hope that your companies will
join in supporting the legislation that I have introduced,
sunshine-in-litigation legislation, that would prevent these
kinds of settlements that contributed to the problem. The
courts ought not to be complicit. And I hope that your
companies will cooperate and join in supporting this kind of
legislation.
Thank you.
Thank you, Mr. Chairman.
Senator Nelson. Thank you.
Senator McCaskill?
Senator McCaskill. Thank you.
Mr. Shimizu, is your company the only company that uses
ammonium nitrate that manufactures airbags?
Mr. Shimizu. Senator, I don't know in detail what kind of
materials exactly our competitors are using, but I heard that
some of our competitors are also using a similar kind of
material.
Senator McCaskill. Well, the information we have is there
are four or five companies that make airbags and that your
company is the only one that is using ammonium nitrate.
Let me ask you this question. Are you still using ammonium
nitrate in the manufacture of your airbags?
Mr. Shimizu. Yes, Senator.
Senator McCaskill. OK. Well, that is worrisome to me.
And let me now move to Chrysler and Honda. I am confused,
and I guarantee if I am confused your customers are confused.
The letter that Chrysler sent to NHTSA on June 20, 2014--I
would like these three letters to be made part of the record,
Mr. Chairman, if we could.
Senator Nelson. Without objection.
[The information referred to follows:]
Chrysler--Chrylsler Group LLC
Auburn Hills, MI, June 20, 2014
Mr. Frank Borris,
Director, Office of Defect Investigation,
National Highway Traffic Safety Administration,
Washington, DC.
Dear Mr. Borris:
This letter is Chrysler's response to your request that Chrysler
consider a regional field action to address a risk of airbag inflator
failures that was described in a letter from Takata Holdings Inc. to
the Office of Defect Investigations (ODI), dated June 11, 2104, and
that was discussed in a conference call with several manufacturers,
including Chrysler, on June 13, 2014.
Although Chrysler has not at this time, made a determination of a
defect in the subject airbag inflators, it is Chrysler's intention to
conduct a field action to replace the driver airbag inflators built
between January 1, 2004 and June 30, 2007, as well as the passenger
airbag inflators built between June 1, 2000 and July 31, 2004 in the
Chrysler vehicles located in the regions identified by Takata (Florida,
Hawaii, Puerto Rico and U.S. Virgin Islands).
Chrysler is currently working with Takata to identify the serial
numbers for the suspect inflators. This information will be used to
establish the potentially affected vehicles in the regions identified
by Takata. Once this affected vehicle population is identified,
Chrysler will provide the information to the National Highway Traffic
Safety Administration (NHTSA).
As of this date, Chrysler is aware of only a single incident in a
Chrysler vehicle involving the suspect inflators.
Sincerely,
Reginald Modlin,
Regulatory Affairs--Director.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator McCaskill. Listen to this paragraph.
``Although Chrysler has not at this time made a
determination of a defect in the subject airbag inflators, it
is Chrysler's intention to conduct a field action to replace
the driver airbag inflators between June'' . . . ``as well as
the passenger airbag inflators between'' . . .
So I am guessing a lawyer wrote that paragraph, because
then I have a letter from Honda that says, ``We have determined
a potential defect relating to motor vehicle safety exists.''
That was written in 2008.
And then we have another letter from Honda in 2014 saying,
``We have decided to conduct a safety improvement campaign. We
have not made a determination that a safety defect exists.''
Then you go down the list of the notifications, and I am
going to start in June 2014. We have a service campaign, then a
service campaign, then a Honda safety recall, and then a Mazda
service campaign, and then a Mitsubishi service campaign, then
a Nissan safety recall, then a Nissan service campaign, then a
Nissan safety recall. Then we have a Subaru safety recall. Then
we have a Subaru service campaign.
Do you understand the issue here? What is going on here is
a refusal to characterize a problem in a way that is clearly
understandable to the consumer.
We have had more recalls in the last year and a half in
American car manufacturing than in the history of American car
manufacturing, probably more in the last year than we have had
in many, many years combined. The problem is I don't think that
people that are driving these cars understand the risk. Because
you guys aren't even comfortable with being consistent as to
whether or not you are telling NHTSA it is a service campaign
or a safety recall.
In your mind, Mr. Kunselman, other than avoiding litigation
and liability, why would you differentiate between a service
call and a safety recall?
Mr. Kunselman. Yes, Senator. I would like to start by
saying it is Chrysler's policy that, regardless of which way
these actions are initiated or how they are characterized,
recall or field service campaign, the customer-facing
information is identical. We file the same information with
NHTSA, and the mailings that go to our customers are the same.
Senator McCaskill. So do the mailings say that this is a
safety recall and you are in danger and you need to get this
car in? Or does it say, this is a notice that this part has
been recalled, without any emphasis on safety?
Mr. Kunselman. It is my understanding that it does
characterize it as a safety concern, yes.
Senator McCaskill. Well, I would like to see, for all of
those ones that involve your companies, all the service
campaign versus safety recall, I would like to see the notices
that went to your drivers. I would like to see the language of
those.
And if, in fact, the language is the same that goes to the
drivers, why is the language different to NHTSA?
Mr. Kunselman. I guess the characterization, in terms of
how we characterize these events--again, Chrysler is agreeing
to do this with one incident and a lack of understanding of
root cause.
I know this will sound like engineering terminology, but
the thing that is still open in this instance with these beta
inflators is an absence of a defined root cause. In absence of
a defined root cause, it makes the next steps difficult in
terms of what to do.
I think this is a nuance of definition as to why you see
these characterized this way.
Senator McCaskill. And, Mr. Schostek, do you say the same?
Is the reason that there is a difference in characterization to
NHTSA--is your notification to your drivers identical as to
whether or not it is a service campaign or a safety recall?
Mr. Schostek. Yes, Senator, I think there is confusion here
and the regulatory framework that we are operating under has
certain terms that are part of that regulatory framework that
we are using.
I am not an engineer. I have asked the very same question
you have asked: What is the practical difference for the
customer? And I have been told: None. They need to bring their
car in.
Now, in terms of how we are looking for evidence of risk
and so forth, that should be the manufacturers' responsibility,
working with suppliers and working with NHTSA.
But, Senator, I would support, if we could make this
clearer for consumers, Honda is happy to work with----
Senator McCaskill. Are you sending the same notification to
your drivers whether or not it is a safety recall or whether or
not it is a service campaign?
Mr. Schostek. Senator, I would like to double check, but I
believe they are very similar notifications whether it is a
service campaign or a safety recall.
[Mr. Schostek submitted the following letter on December
1:]
Honda--Honda North America, Inc.
Washington, DC, December 1, 2014
Hon. Claire McCaskill,
United States Senate,
Washington, DC.
Dear Senator McCaskill:
I want to follow up on our discussion about the letters consumers
receive when Honda conducts a safety recall versus those related to a
safety improvement campaign. You asked me whether the letters customers
receive from Honda are identical. To answer that question, please see
the attached letters to the National Highway Traffic Safety
Administration (NHTSA), both dated June 19, 2014.
At that time, Honda had identified a potential safety defect in
passenger airbag inflators of certain 2002 and 2003 Honda and Acura
vehicles. We initiated a safety recall based on that determination.
Included in our communication to NHTSA was a draft letter to consumers
that stated the nature of the problem as follows: ``If an affected
airbag deploys, the increased internal pressure may cause the inflator
to rupture. Metal fragments could be propelled upward toward the
windshield, or downward toward the front passenger's foot well,
potentially causing injury to a vehicle occupant.'' The letter then
directed vehicle owners to schedule an appointment with a dealership to
have their vehicle repaired, at no cost to them.
On that same day, at the request of NHTSA, Honda also initiated a
safety improvement campaign (SIC) for the passenger's airbag inflator
in certain 2003, 2004, and 2005 Honda and Acura vehicles. Although the
transmittal letter to NHTSA distinguished the SIC from a recall, our
proposed letter to customers identified the action as a safety recall.
Honda described the problem as follows: ``If an affected airbag
deploys, the increased internal pressure may cause the inflator to
rupture. Metal fragments could be propelled upward through the
windshield, or downward toward the front passenger's foot well,
potentially causing injury to a vehicle occupant.'' Consumers also
received the same instructions to take their vehicle to a dealership
for repair at no cost to them.
I want you to know that Honda is committed to addressing the needs
and concerns of our customers, especially when it involves a safety
defect recall. Please feel free to call Ed Cohen or me at 202-661-4400
with any further questions you may have.
Sincerely,
Rick Schostek,
Executive Vice President,
Honda North America.
______
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Schostek. Our interest is to tell that customer to
please call, please come to a dealership, please get the part
replaced, whether that replacement is for the purpose of an
identified defect, which is the recall, or the purpose of
getting more information, which is the safety improvement
campaign. I think we should help the consumer by not having it
be so unclear to them.
Senator McCaskill. Well, I will tell you what. If I get a
letter saying, ``We are investigating something; would you
bring your car in so you can help us?'', I am busy. If I get a
letter that says, ``Hey, you know, if you drive this, you could
have a piece of shrapnel embedded in your eye, if your daughter
is sitting in the seat next to you she could be blinded or you
could die,'' that is a lot different than, ``Hey, we are
checking out an investigation; could you bring it in so we
could check it out?''
I mean, I think that too many lawyers are--I mean, we found
this in GM, as you all know. You had to have followed it
closely. There were lawyers that were trying to avoid
litigation. There were not lawyers that were trying to make
sure every consumer knew the danger.
And we have to get out of this defensive crouch about
liability litigation and get into an offensive position about
making sure drivers are safe. And until your companies decide
to do that, until NHTSA is a more able and aggressive partner
in that, consumers are going to be in the dark.
I mean, the exchange between Senator Heller about whether
or not his daughter was safe was incredible. He is a United
States Senator, and he is asking somebody in charge of the
company that made his daughter's car whether it is safe for her
to drive it, and it was clear you weren't sure how to answer
it. That is a problem. We have a problem.
So we are going to keep having these hearings, and we are
going to keep working on legislation, and we are going to keep
yelling at NHTSA until we get this right for the driving
public. This is unacceptable.
Thank you.
Thank you, Mr. Chairman.
Senator Nelson. Thank you, Senator.
Senator Cantwell?
STATEMENT OF HON. MARIA CANTWELL,
U.S. SENATOR FROM WASHINGTON
Senator Cantwell. Thank you, Mr. Chairman.
And I would like to follow up on a couple of points that my
colleagues have made. And I share their frustration and angst
over this situation when there is such a pause or it is, ``We
are just doing what NHTSA says.'' I think today's hearing is a
very good opportunity for us to discuss what are the changes to
be made. Not what NHTSA requires today, but now that we are
here, what do we need to improve the situation.
But first I want to follow up on this airbag recall
situation as it relates to the passenger side. So I wanted to
ask you, Mr. Shimizu, would you be able to meet demand if it
was for all the passenger-side airbags? Would you be able to
meet that demand? Or do we need the Secretary to help in
expediting this with other manufacturers?
So I heard Mr. Schostek say, well, if that is--you know, to
Mr. Blumenthal's question, there was a little bit of--I read
hesitancy into that, ``Well, we will see what NHTSA says.'' So
I am asking you now, can you meet that demand on the passenger-
side bags? If not, let's get to the bottom line here.
Mr. Shimizu. We committed to provide for replacement kits,
which is in the beginning of this recall of the passenger-side
airbag. Currently, we are producing 300,000 kits per month in
total.
And we understand we have to speed up preparing for
replacement kits, so we will add two more lines in January. And
that we also committed in the beginning, and we are going to do
as committed, and the supply ability of replacement parts to
increase to 450,000 kits.
And, also, we do some effort--so we have four inflator
plants globally and then the plant in Mexico, which is mainly
producing the inflator for replacement, but they are running at
full capacity right now. We found out the German plant has some
extra capacity, so we decided to move some of the products from
Mexico to Germany to open up the capacity in Mexico so Mexico
can open up some capacity to generate more inflators for
replacement kits.
Senator Cantwell. So you are saying you have capacity. Is
that what you are saying? You have capacity and the secretary
doesn't need to take action?
It shouldn't be a mystery here. We should be clear whether
we need more capacity by other suppliers or not.
Mr. Shimizu. We understand we have to speed up the
replacement kits. Even if we increase to 450,000, that is maybe
still not speedy enough. So we are discussing with automakers
for any other option we can take to speed up the replacement.
And answering to your questions, I am not sure what kind of
things----
Senator Cantwell. Well, maybe I will ask the other two.
Mr. Schostek, do you think that we need to have the
Secretary take action, yes or no?
Mr. Schostek. At the present time, we have enough supply
for the demand, but the demand could change based on future
actions. So I am not in a position to judge Takata's ultimate
capacity here. For us, all options should be on the table to
get parts replaced in customer vehicles.
Senator Cantwell. OK. I have about a minute left, and I
want to get to another point, but I am going to follow up on
this with each of you and with the Secretary.
But why are we not here today discussing why not make
manufacturers responsible for 100 percent recall success?
The gaps that I see--I mean, first of all, I don't see an
e-mail system here, I don't see an AMBER Alert, and yet we have
people who are dying. And we are hiding behind, ``Well, we had
an agreement, and we did a settlement,'' and then in the
settlement nobody really knew what was going on.
My understanding is Germany has more like 100 percent
recall success. We have a gap here with people who are second
purchasers not knowing, because you are communicating with
first, is my understanding, first buyers.
So why not just say that you are responsible for getting
100 percent recalled? The cars are yours. They are out there in
the public. There are lots of tools we can use. But why not set
a better goal than what we have?
Mr. Schostek. One hundred percent would be what we would
want to achieve, too. And that is what we are trying to achieve
right now. We are trying different methods. We haven't got 100
percent. And especially in older vehicle populations, we have
been unable to achieve 100 percent.
I don't know the average recall completion rate. I believe,
but I would want to check further, I believe it is about 60,
70, 80 percent. To me, that is not good enough.
Senator Cantwell. And my understanding is that Germany is
getting, like, 100 percent.
Mr. Schostek. Right. And I would just submit, Senator, in
my full written opening statement, we talk about that. Germany,
to my understanding, has a process whereby, before a car can
get registered, it needs to be checked if there are any
outstanding recalls, similar to in some states in the United
States where an emissions certificate precedes registration.
Please don't misunderstand. Honda is going to use any new
tools or any innovative tools to find customers and get these
recalls done. That is what we want to have happen. But there
could be some support on the state level, where these programs
are implemented for recommendations such as that.
Senator Cantwell. I think the more the manufacturers can
talk about not what NHTSA does and requires today but what you
would like to see, the better that will be.
Thank you, Mr. Chairman.
Senator Nelson. Senator Rubio?
STATEMENT OF HON. MARCO RUBIO,
U.S. SENATOR FROM FLORIDA
Senator Rubio. Thank you, Mr. Chairman.
This question is to all three of the companies involved.
Can you guarantee us here today that no one driving one of
these vehicles outside of the territories currently covered--
Florida, Hawaii, Puerto Rico, the U.S. Virgin Islands, the
places with high humidity--if you were driving one of these
vehicles with one of these devices in it outside of those
territories, can you guarantee us that no one will be injured
by this device in the way we have seen in other places?
Mr. Shimizu. Maybe I will start.
As I mentioned in the opening statement, all issues from
the past incidents or problems are already addressed and taken
care of. And according to my understanding, I believe that the
products we are producing right now, including replacement
kits, are produced under well-controlled production processes
and should work as designed and are safe.
And regarding a regional recall, you mentioned over the
four states for the high absolute humidity area, according to
our record, these areas are the focus due to the high absolute
humidity environment----
Senator Rubio. No, I understand. I am sorry, I don't mean
to cut you off. I have limited time.
My question is pretty straightforward, though. If you
bought a car and you have one of these cars with this device in
it and you have spent the entire time in North Dakota or South
Dakota or Wisconsin, not one of these places, can you tell us
here today that you are confident that no one will be injured
in the way we saw, for example, in Florida?
Mr. Shimizu. If it is not currently under recall, covered
by recall, I believe our products in the car works as designed
and are safe, as I said before.
Senator Rubio. OK. So we are never going to read about a
story of someone outside of these areas covered by the recall
that has been injured in the same way that we saw, for example,
in Florida. Is that your testimony?
Mr. Shimizu. According to my knowledge, again, I believe
these vehicles are considered to be safe.
Senator Rubio. OK.
What about, then, did the other companies have a----
Mr. Schostek. Senator Rubio, we have recalls outstanding
that are connected to Takata manufacturing issues. We did these
recalls 2008 through 2011. They had no geographic limit. Those
are uncompleted recalls, and I was just discussing with Senator
Cantwell our struggles to get those completed.
Those customers, we want them to come in. There is risk
there. We want those customers to come in. We want to get to
100 percent----
Senator Rubio. My question is people that are not covered
by the recall for various reasons--where they purchased the
car, et cetera. You are talking about the recalls that had
nothing to do with geographic limits.
Mr. Schostek. Yes, sir.
Senator Rubio. I am talking about the ones that do, the
ones that--maybe that is not specific to your company.
If your car is not currently covered under the existing
recall, you have nothing to worry about?
Mr. Schostek. We have identified higher risk, sir, in the
humid areas. And that is what we are still working on right
now, to gather more information about those vehicles, both
there and in non-humid states.
Senator Rubio. Yes?
Mr. Kunselman. Senator, in my opening statement, I
characterized this situation as an ongoing investigation. And
at least once during the testimony I reiterated that, in the
absence of a defined root cause for the beta population of
vehicles, I think we would find it difficult to guarantee 100
percent as to the risk outside of the geographic regions
identified.
I believe the test data and the incidents confirm those
areas are of high risk and of utmost important to deal with
those first. But with the open status of the root cause, I
could not affirm your question.
Senator Rubio. To the best of your knowledge, with the
minute that I have left, to the best of your knowledge, did any
of your companies at any time calculate that the costs of
conducting a recall outweighed the benefits of alerting
consumers and therefore decided not to move forward with some
of this earlier in the process?
In essence, was there ever a time here where a calculation
was made that it would cost so much financially to deal with
this that we are better off not doing anything about it because
the safety risks don't justify it? Did that calculation ever
happen at any of the three companies?
Mr. Kunselman. I can confidently say that that is not the
case at Chrysler.
Mr. Schostek. To the best of my knowledge, no, sir.
Mr. Shimizu. Is not the case.
Senator Rubio. OK.
My last question: If I am driving one of these cars now and
I don't live in one of the states covered or areas or products
covered by the recall because of where they are geographically
located, what should I do? Just go on about my life and not
worry about it?
Mr. Schostek. Sir, we have communicated to our dealers that
if our customer has a concern, has a worry about driving a
vehicle in one of----
Senator Rubio. My question is, should they have a worry?
Mr. Schostek. We----
Senator Rubio. If you are not covered currently by the
recall but you are driving one of these cars, should you have a
worry?
Mr. Schostek. Again, we see the risk much higher in the
humid states. And it is open as to what is the cause. That is
what all of us are trying to get to right now, with regard to
this regional SIC.
Mr. Kunselman. Senator Rubio, I would say that for the
Chrysler vehicles not covered by the recall, I would drive them
myself.
Senator Nelson. Senator Rubio, they see the risk much
higher in the humid states, but Associated Press reported on
November 17 that Honda had quietly decided to replace impacted
Takata airbags nationwide rather than just in hot and humid
states. And they also indicated in those reports that Honda had
no intention of actually notifying customers in other states
about the remedy. Instead, as stated, they would have to go to
their dealer.
So, Mr. Schostek, why did Honda believe it was appropriate
to provide a remedy but not tell anybody?
Mr. Schostek. And, Chairman Nelson, this is not a secret or
a quiet policy. It is on the NHTSA website, and it is there
because we put it there.
This was a communication to our dealers. Our dealers are
asking the same kind of questions that Senator Rubio had. And
we want to deal with our customers' needs in the non-humid
areas on an individual basis. If we find a customer that has a
concern, we are asking our dealers to take care of that
customer and replace that airbag, understanding that we believe
the repairs are more priority in the humid areas, but we have
an approach to our customers that we want to provide customer
service.
It is not secret. We didn't mean it to be quiet. We wanted
to tell our dealers, if a customer comes in with a concern,
please respond to that concern.
Senator Nelson. So a dealer in Senator Thune's state of
South Dakota or Senator Markey's state or Senator Klobuchar's
state--but we are a mobile society, and there are people in
Massachusetts and Minnesota and South Dakota that drive south
and come to Florida during all times of the year.
Senator Thune. Especially in January.
Senator Nelson. Especially January, but when the kids are
out of school, they come also in the heat of the summer to
Disney World.
Now, isn't something missing here?
Mr. Schostek. We are trying to understand the reasons for
the inflator ruptures, and we are collecting inflators from
vehicles that have been in those humid states or ever been
registered in those humid states or spent time in those states.
We are doing our best to collect that information, sir.
Senator Nelson. Mr. Shimizu, this morning's New York Times
says, quote, ``Two former Takata engineers said they and other
employees had concerns over switching to a risky compound.''
They are talking about the ammonium nitrate from the previous
compound.
Quote, ``It is a basic design flaw that predisposes this
propellant to break apart and therefore risk catastrophic
failure in an inflator,'' said Mark Lillie, a former senior
engineer with Takata at its propellant plant in Moses Lake,
Washington. Mr. Lillie recently shared his concerns with our
Senate staff members.
Quote, ``It was a question that came up: Ammonium nitrate
propellant, won't that blow up?'', said Michael Britton, a
chemical engineer who worked with Mr. Lilly at the Moses Lake
plant. The answer was, ``Not if it stays in the right phase.''
All right. Now, in addition, the media reported various
problems at the Takata plant in 2001 and secret airbag tests in
2004.
So why didn't Takata take action on any of these kinds of
concerns regarding the use of ammonium nitrate?
Mr. Shimizu. Senator, let me briefly explain about the
material called ammonium nitrate.
Senator Nelson. Please.
Mr. Shimizu. Ammonium nitrate, as I said at the beginning,
there are several advantage to using it, and then it has
benefit to the users also, because of its chemical properties.
But it is sensitive to moisture, as is well known, and if the
moisture is not well controlled during manufacturing the
propellant or assembling the inflator, maybe the performance--
they don't perform as designed, because that may influence the
combustion characteristics. And that is well known in the
industry.
But talking about phase stability, according to my
knowledge, the ammonium nitrate stays stable during the process
or manufacturing processes. So, in my understanding, in other
words, if we produce the propellant and inflator under the
controlled, especially moisture-controlled, environment, it
will be stable and safe.
And, of course, there are some errors that have happened
during processing. On some occasions, we have had some failure
modes appear, and so we did recalls in the past.
Senator Nelson. Mr. Shimizu, I did not interrupt you. I
wanted to give you every opportunity to answer the question.
That doesn't answer the question.
If, in fact, you knew about it as far back as 2001 and
Takata was doing secret airbag tests with ammonium nitrate in
2004 and you have your own engineers, as quoted in today's New
York Times, saying what they said, that ammonium nitrate was
the problem, then--Senators, any further questions in a second
round?
Senator Markey. May I ask one question?
Senator Nelson. Please.
Senator Markey. Thank you, Mr. Chairman.
Mr. Schostek, until 2 days ago, most of the recent actions
taken related to defective driver-side airbags were limited to
so-called humid states. But three of the four deaths that were
caused by exploding Takata airbags in Honda's cars occurred in
Oklahoma, Virginia, and California, not the humid states that
this recall applied to. As the Chairman was just referring to,
South Dakota or Minnesota or Massachusetts could have been in
that category.
When my staff asked NHTSA about these deaths, they were
told that the vehicles involved had been recalled for a
different Takata airbag manufacturing problem years ago but
that they had not been repaired.
There is just one problem with the explanation. When my
staff put the vehicle ID number of two cars involved in 2013
and 2014 fatalities through Honda's recall data base, the
database says that these cars' airbags were repaired sometime
after 2011.
Either, one, your recall database is wrong, or, two, the
defective airbag was replaced with another defective airbag,
or, three, the driver received a brand-new airbag sometime
after 2011 and the airbag still killed someone just a few years
later.
So, Mr. Schostek, which of those three options is it?
Mr. Schostek. Senator Markey, I believe it is option one,
that our website has deficiencies. When we have multiple
recalls that involve the same vehicle, our system was bringing
up a message of ``recall completed'' for the ones that were
superceded, if you will.
It is our problem, sir; it is being fixed. We are due to
report to NHTSA tomorrow about that. It is an embarrassing
problem, in this day and age, that we have that technology
problem on our website.
Senator Markey. All right. So this goes back to Senator
Heller's question, and others, about the safety of families
driving these vehicles. So what you are telling me is that
someone buying a used Honda today could look up the car they
want to buy on your recall data base, be told that a repair
needed to fix a fatal safety defect was completed, even though
it was not.
And I think, again, that just goes to the whole question of
whether or not the public should feel confident that they have
a family member driving these vehicles.
Mr. Schostek. Sir, I agree with you. That could happen
today. I am bound and determined to check and make sure it
can't happen tomorrow and it won't happen again.
Senator Markey. And I will just say again, Mr. Chairman, I
don't think it makes any sense for a passenger-side airbag
recall not to occur. Otherwise, the passengers in these
vehicles should just be in the backseat, because they are just
really running a huge risk, given the fact they are the very
same airbags that deployed and are ready to hit dangerously a
passenger in our country.
Thank you, Mr. Chairman.
Senator Nelson. And, gentlemen, you need to know that I am
going to be meeting with Secretary Foxx. I am going to request
of him that he impose the maximum penalty allowed by law, even
if that is a million dollars a day, on the automobile companies
if you all are not providing a loaner or a rental car to the
folks who potentially would be driving a deathtrap. It is as
simple as that.
Senators, we need to move on to the NHTSA person.
Senator Blumenthal?
Senator Blumenthal. Just one quick question to Mr. Shimizu.
What is the maximum number of replacement parts that you
will be able to provide per month?
Mr. Shimizu. Currently, it is all provided from Mexico for
the American market, 300,000 per month at this moment. But if
we increase, it would be increased to 450,000 per month from
January.
Senator Blumenthal. 450,000 per month, that is the maximum?
Mr. Shimizu. That is our plan right now.
Senator Blumenthal. And one more question. What steps have
you taken to improve the assembly of the inflator, the
container that Senator Nelson showed you? What steps have you
taken to make the inflator more leak-proof and water-proof, in
other words, more resistant to water coming into it or
humidity?
Mr. Shimizu. A couple steps already we have taken to
improve the problems, improve the robustness. And we are
discussing with our carmakers--the current product, as I said,
is safe if they came out from well-managed processes. But if
there is a way to improve the robustness against the humidity,
we will continue to discuss about how we can improve the
robustness of the inflator from now.
Senator Blumenthal. Thank you, Mr. Chairman.
Senator Nelson. Thank you, Senator.
OK, gentlemen. Thank you for your participation today.
We will call up Mr. David Friedman, the Deputy
Administrator of the National Highway Traffic Safety
Administration, NHTSA.
Where is Mr. Friedman?
Welcome, Mr. Friedman. Have you heard the testimony in the
anteroom?
STATEMENT OF DAVID J. FRIEDMAN, DEPUTY
ADMINISTRATOR, NATIONAL HIGHWAY TRAFFIC SAFETY
ADMINISTRATION, U.S. DEPARTMENT OF TRANSPORTATION
Mr. Friedman. Yes, Mr. Chairman, I have.
Senator Nelson. OK.
What we are going to do is forgo the statement because of
the lateness of the hour. We are going to have our Senators,
and you can make your points in response to the questions. I
will defer my questions and do clean-up at the end.
Senator Thune?
Senator Thune. Thank you, Mr. Chairman.
Mr. Friedman, we are here today to discuss yet another
apparent failure within the automobile industry. These issues
with the faulty Takata airbags are just the latest in a long
line of high-profile recalls that have been the focus of
multiple hearings held by this committee and the House of
Representatives this year.
This is a general question, but I hope you can shed some
light on why we are seeing such a flood of automotive safety
issues recently. Do you believe that this recent experience
indicates a broad and systemic problem within the automobile
industry?
Mr. Friedman. Ranking Member, one of the reasons why I
think we are seeing this increase in recalls is because the
auto industry is running scared. Because the auto industry
realizes, one, that NHTSA has been pushing them hard to
establish a new normal when it comes to recalls, where we
expect them to recall vehicles quickly, to notify us quickly,
and to find the problems quickly.
I think they are also very concerned, as they should be,
about the actions Congress has taken to shed a light on serious
problems in the auto industry. And I think they are also
reacting to the media attention that has been observed. They
are cleaning out their closets. And it is truly a shame, the
fact that it took all of this attention for them to do so.
I asked 12 major automakers, I called them to Washington to
talk to them about the need for a new normal when it comes to
recalls. No more hiding information, no more hiding behind
attorney-client privilege, no more waiting until proof beyond a
shadow of a doubt that there is a problem, no more fighting us
when we have clear evidence of defects. They need to act much
more quickly.
And NHTSA needs to continue to act more aggressively and
more quickly to keep them in line, as we have done over the
last 6 years, with more than $160 million in fines.
Senator Thune. In 2010, NHTSA closed its examination into
the scope and timeliness of Honda recalls involving Takata
driver-side airbags, citing, ``insufficient information to
suggest that Honda failed to make timely defect decisions on
information it was provided.''
What was the insufficient information at issue? Knowing
what you now know, should the agency have kept that inquiry
open?
Mr. Friedman. Senator, we are just beginning to look into
the details of what happened at that time. I expect to be able
to provide you more details on that going forward.
My current understanding is that we understood that Takata
had identified the batches that were involved with the
manufacturing problems. But it has been made clear to us that
Takata does not have good quality control and clearly does not
have good recordkeeping, because further down the road they had
to update their submissions in some of their recalls,
indicating that they had not provided us with that information.
That is one of the key reasons why we are demanding, under
oath, that they answer and provide us all details going back to
2000 about all of these recalls, all of the tests they have
done on airbags. We need every bit of that information. We will
pore through that. And if they failed to live up to the law, if
the auto industry failed to live up to the law, we will hold
them accountable to the full extent of the law.
I would say, though, one of the things we would like to
see, as is included in the GROW AMERICA Act, is a significant
increase in our ability to hold them accountable. Right now, we
are limited to just $35 million for any single infraction.
Frankly, for too many of these companies, that is pocket
change. The Secretary and the President have asked for that to
be increased to $300 million, and if you give us that
authority, we will use it aggressively.
Senator Thune. So what you are saying, essentially, is not
the insufficient information determination was made as a result
of Takata's failure to disclose to you the information that
could have shed additional light on this problem and that NHTSA
closed the inquiry because it thought Takata had satisfied all
the questions that you had.
Mr. Friedman. Based on our understanding----
Senator Thune. That it was a failure on their part to
provide information.
Mr. Friedman. We are looking into it to find that out. And
that is why we are demanding they provide us that information
under oath.
Senator Thune. You haven't had a chance to look at it yet,
but Senator Nelson and I and a few others on the Committee are
introducing legislation today that would incentivize
individuals who uncover serious allegations of vehicle defects
or noncompliance with motor safety laws to blow the whistle and
provide original information to government regulators and that,
if that information leads to enforcement actions where more
than a million dollars in monetary sanctions is involved, that
that whistleblower could receive up to 30 percent of that.
Is that a concept that you can support?
Mr. Friedman. Senator, we welcome every bit of evidence,
every bit of information that can help lead us to rout out any
of these problems. I look forward to reading your legislation.
I look forward to evaluating it.
One of the things that I think would be crucial, in general
but also with such a proposal, is to ensure that we have the
resources, the people and the dollars, to follow up on those
leads.
We are getting this year alone over 70,000 consumer
complaints. These are critical to us finding these problems. We
get 6,000 reports a year from the auto industry. We need more
people to be able to follow up on all that information.
Senator Thune. OK. Thank you.
Mr. Chairman, my time has expired. Thanks.
Senator Nelson. I agree with you, Mr. Friedman. You do need
more resources.
And thanks to Senator Thune for being willing to push
forward on this question on the whistleblowers.
Senator Klobuchar?
Senator Klobuchar. Thank you very much, Senator Nelson.
First of all, I think you maybe heard me talk about the
victim in our state who is permanently blinded, Shashi Chopra
from North Oaks, Minnesota. She was driving her BMW in 2013. It
was a 2002 model. And this is sad because this had been going
on for so long. There is a New York Times report about secret
tests by Takata in 2004, and now here you are in 2013.
Mr. Friedman, according to the family, they never received
confirmation from NHTSA that their case was being reviewed. And
I don't know what actions, follow-up actions--because the
family themselves filed something with NHTSA in 2013. And do
you know if anyone ever reviewed the complaint that was filed
by the family and what happened?
Mr. Friedman. Senator, we are looking into this as we
speak. I know your staff has alerted it to us just this week.
But we put eyes on every single complaint that comes through
NHTSA, that comes through our website, that comes through our
hotline, that people mail in. We put eyes on all of them, and
we follow up, and we try to piece together the information that
that provides.
I will look further into this to make sure that I can tell
you exactly what happened with this.
Senator Klobuchar. OK. And, obviously, this complaint was
filed after it happened, but just given how these recalls have
trickled out, it might have helped someone else. And that is
why we are concerned.
Then going back in time, NHTSA's call this week--now we are
into this week--for a recall that expanded beyond the regional
recall finally got at people in Minnesota who might be,
actually, snowbirds. Believe it or not, some of them abandon
our state during the winter, and so they actually spend their
winter months in southern states.
And their vehicles then--they drive down there, and then
they drive back. So their vehicles are exposed for an extended
amount of time to high humidity. And they were not included in
the previous regional recalls, and you didn't think there was a
need to include those types of vehicles.
What changed?
Mr. Friedman. Senator, if we could put up a couple of
charts so that I can help make that clearer.
This is a chart of the United States indicating the median
dew point temperature, which is basically an indication of the
total amount of water in the air. All of the initial incidents
that occurred occurred in these regions that you see in brown
or in Puerto Rico, which is also even more humid.
So all the initial incidents that caused us to open this
investigation--we started with three complaints. We acted
rapidly based on those three complaints. We connected the dots
that all three--there were three different car companies. All
three had airbags from Takata. We connected those dots. We
connected the dots, as well, that these were all in humid
regions.
We opened an investigation and got the auto industry to
begin recalling vehicles in days. So we acted aggressively in
this case, based on the information we had at the time.
Now, because we didn't want to see anyone else hurt from
these problems, part of what we did is we pushed the auto
industry. We said, ``We can't wait for another one of these
incidents. You need to get out there and work with Takata, test
airbags that are returned, so that we can figure out, is this a
broader problem? We can't sit here.''
Now, as we did that, as we tried to gather that test data,
we were also monitoring field incidents.
If you could put up the driver-side chart.
Initially what we were working with on the driver-side
airbags was three incidents--sorry, five incidents, pardon me--
that were all in Florida, again, initially reinforcing the
concept that this was a problem related to exposure to high
temperatures and high humidity, in other words high median dew
point temperature.
Senator Klobuchar. I am not sure, were they all in Florida,
or were they in the southern part of the United States?
Mr. Friedman. So, initially, it was only these that were--
--
Senator Klobuchar. And then it got to some southern--OK.
Mr. Friedman. Then there was an incident in California.
Senator Klobuchar. Right.
Mr. Friedman. When that incident happened, we made clear to
Honda, and Honda acted, to extend their regional recall to that
area. At that point, that could--could--have been an outlier.
Then, at the end of last month, we received a complaint
from an incident in North Carolina, here. We acted quickly. We
reached out to the consumer. We verified that it was, in fact,
an airbag rupture. Based on that data, the pattern is now
clearly broken for the driver-side airbags.
Senator Klobuchar. OK.
Mr. Friedman. So, while all the incidents initially were
around here, now we have an incident here and here----
Senator Klobuchar. Right.
Mr. Friedman.--areas of much lower temperature and
humidity.
Senator Klobuchar. OK.
Mr. Friedman. Based on that information, we called on
Takata and all the automakers involved with driver-side airbags
to recall those vehicles.
Senator Klobuchar. OK.
My last question is about not the humidity issue and
expanding to the rest of the United States but the types of
cars. And this is an issue for this family. This was a BMW car.
And it is my understanding in 2010 they sent a letter; BMW told
NHTSA that it was aware of the Takata airbags under Honda's
recalls but that Takata had told them that BMW vehicles were
not affected.
And so, did NHTSA receive that? And did this happen with
other manufacturers, as well, that they just based this on
Takata's information?
Mr. Friedman. I believe that is accurate.
One of the things, frankly, that needs to change and that
needs to be more effective is suppliers and automakers need to
do a better job of sharing incidents, especially when you have
a common supplier.
Senator Klobuchar. Right.
Mr. Friedman. Right now, all too often, automakers keep
their incident data to themselves.
Senator Klobuchar. Can they legally share that information?
Mr. Friedman. Well, this is one of the things, when I
called all 12 automakers to Washington, that I began discussing
with them, is we have to figure out a way, without violating
antitrust laws, that they can share critical safety
information. There should be no barriers----
Senator Klobuchar. I agree.
Mr. Friedman.--to sharing that critical safety information.
Senator Klobuchar. About suppliers. Yes.
Mr. Friedman. And we also talked about suppliers. I was
talking to them about Takata at the time because, both in the
GM case and in the Takata case, part of the concerns here are
communications between the auto industry and their suppliers.
That has to get better.
Senator Klobuchar. Got it. All right. Maybe that is
something we can work on.
Mr. Friedman. Absolutely.
Senator Klobuchar. Thank you, Mr. Friedman.
Senator Nelson. Senator Markey?
And, by the way, of course your written testimony will be a
permanent part of the record.
Mr. Friedman. Thank you, Mr. Chairman.
[The prepared statement of Mr. Friedman follows:]
Prepared Statement of David J. Friedman, Deputy Administrator, National
Highway Traffic Safety Administration, U.S. Department of
Transportation
Mr. Chairman and members of the Committee, thank you for the
opportunity to testify today about Takata air bag recalls. The Takata
air bag defects involve a series of recalls spanning back to 2008 with
multiple causes of the serious safety issue of fragmenting air bag
modules. Understandably, people are concerned. I share that concern,
which is why we acted quickly this year when we received evidence of a
new defect. I welcome the opportunity to clarify the facts surrounding
the different recalls of these air bags and to reassure you and the
motoring public that NHTSA is pursuing its recalls and investigation of
defective Takata air bags aggressively.
NHTSA's mission is safety, and we have helped reduce roadway
fatalities to record lows by fighting dangerous behaviors such as
impaired and distracted driving, pushing industry to make safer cars,
and forcing recalls of approximately 100 million defective vehicles and
items of motor vehicle equipment in the past 10 years. This year alone,
we forced the largest child seat recall ever and fined automakers more
than $55 million for mishandling recall requirements--bringing the
total to over $160 million in the past six years.
The Takata air bag recall story is more complicated than most
recalls because, to date, there have been multiple issues leading to
recalls involving 10 auto manufacturers and over 10 million vehicles
since 2008. These recalls can be broken down into two categories:
national recalls, along with their expansions, associated with
identified manufacturing defects and the recent regional recalls--
initiated by NHTSA as soon as the problem appeared--that preliminary
data indicate were associated with prolonged exposure of some Takata
air bags to regions of high absolute humidity (the combination of high
temperatures and high relative humidity), which may be related to a
manufacturing, design, or other defect not yet identified.
Between 2008 and 2013, Honda, along with Toyota, BMW, Nissan and
Mazda, took action to recall defective Takata air bags with
manufacturing problems relating to fragmenting driver's or passenger's
side inflators rather than face NHTSA enforcement.\1\ In 2014,
Chevrolet recalled vehicles to address a newly discovered manufacturing
problem. These recalls were national in scope because based on our
present knowledge, the defects occurred in the manufacturing process of
air bags that had been installed in an identifiable pool of vehicles
sold nationwide. The four deaths in the United States that have been
widely reported as attributable to rupturing Takata air bags all
involved air bags associated with the national recalls that occurred
prior to 2014.
---------------------------------------------------------------------------
\1\ In calendar years 2008 through 2011, Honda conducted a series
of recalls to address a manufacturing defect concerning driver's bag
inflator ruptures on various MY 2001 through 2004 vehicles. In calendar
year 2013, Honda, along with Toyota, BMW, Nissan and Mazda, initiated
recalls to address a manufacturing defect concerning passenger bag
ruptures in certain MY 2001 through 2004 models.
---------------------------------------------------------------------------
Tragically, in at least some of those cases, the air bag in the
vehicle was not repaired even though the recall had begun. This loss of
life is unacceptable and that is why we continue to expand our outreach
to vehicle consumers through information tools like the VIN look up,
recall alert smartphone applications and red letter envelope direct
mailings. In addition to NHTSA's work, industry must step up to more
aggressively reach out to consumers to help them get their vehicles
repaired to keep them safe. For example, NHTSA has been pushing both
the automobile and child seat manufacturers to take greater steps to
alert and even incentivize owners to bring in their defective products.
And, as the Administration proposes in the GROW AMERICA Act, rental car
companies and used cars dealers should not be allowed to rent or sell
vehicles without first fixing defects.
Given our present knowledge, the recalls cited above are different
from the air bag defect NHTSA identified, forced regional recalls on,
and has been investigating this year. In 2014, soon after opening our
investigation, NHTSA demanded, and obtained, the recall of more than
four million vehicles because of evidence that air bag inflators were
rupturing during crashes in geographic regions that have high levels of
absolute humidity. To our knowledge, there are zero deaths in the
United States associated with the 2014 recalls. But our concern for the
threat of serious injury or worse compelled us to act very quickly.
NHTSA began looking into this issue after connecting three separate
consumer complaints of air bag ruptures from three different
automakers. NHTSA staff identified that these three had a common
supplier and common climatic conditions, and reached out to the
supplier and automakers. This helped us identify three additional
incidents and two other affected automakers. All six crashes that led
to the initial regional recalls occurred in Florida or Puerto Rico
between August of 2013 and May 2014.
NHTSA's calls for recalls in 2014 by Honda, Toyota, Nissan, Mazda,
Mitsubishi, Subaru, Chrysler, Ford, BMW, and General Motors are based
on real data and a clear objective to protect those at demonstrated
risk. Because of that risk and because of their use of the same or
similar air bag inflators, we persuaded those 10 auto manufacturers--
including some that had no field incidents--to conduct recalls on
early, limited information to save lives and prevent injuries. Our
additional purpose in pushing for these actions was to obtain more data
by testing the replaced air bags to see whether they would rupture.
At our insistence, Takata is quadrupling testing of returned air
bags, including those outside of hot and humid regions, to assist our
effort to determine the full scope of the problem. We have also pressed
the auto manufacturers to conduct their own testing of returned air
bags. In addition, we are looking very carefully at any unusual air bag
deployment incident we find that occurs in or outside of the present
regions to determine whether it may involve the same, a similar, or a
different defect. Finally, we are working to bring in outside expertise
and secure appropriate testing facilities so we can expand the volume
of and validate testing being done by the supplier and manufacturers.
The initial data related to the current regional recalls indicate
that vehicles with certain Takata air bags in regions prone to long-
term, high humidity and temperatures pose a risk. At this time, we are
evaluating evidence to determine whether or not the same can be said
for other regions or in cases where people travel to these regions
during periods of lower humidity. We are also evaluating the
differences in the data between driver's and passenger's front air
bags. Our investigation is far from over and we continue to seek and
push for more information and we will take additional action as
warranted.
Based on the results of testing and on field data we continue to
gather, NHTSA has expanded, and will continue to expand, the geographic
scope and vehicles involved in these recalls as appropriate. In fact,
on Monday, November 17, 2014, my staff contacted Takata, and then
followed up with Honda, Ford, BMW, Chrysler, and Mazda, to call on them
to initiate a national recall for specific driver's side frontal air
bags made by Takata. This decision was based on our evaluation of a
recent driver's side air bag failure in a Ford vehicle outside the area
of high absolute humidity and its relationship to five previous air bag
ruptures of the same or similar design.
Some have called to expand the geographic area of all the vehicles
currently subject to the regional recalls. We share a deep concern for
those with vehicles outside the regions of high absolute humidity,
which is why we have expanded the recalls based on the data and
directed Takata to work with the manufacturers to get and test air bags
from other parts of the country. To date, there have been no ruptures
in those tests for passenger's side front air bags, but we are pushing
Takata and the manufacturers to accelerate efforts to get even more
tests done around the nation, and we are evaluating field incidents as
we are made aware of them. And, given the current limitations on the
supply of replacement parts, NHTSA called on Takata to speed up the
production of replacement parts. In response, Takata agreed to add two
production lines early next year. NHTSA has also been in communication
with other air bag inflator manufacturers to assess what, if any,
capability those companies have to fill the demand for replacement
parts.
The regional recalls of vehicles with defective Takata passenger
side air bags ensure that the limited supply of replacement parts goes
to vehicles in areas of demonstrated risk--Florida, the Gulf Coast and
other areas of high absolute humidity. At this point, a national recall
of all Takata air bags would divert replacement air bags from areas
where they are clearly needed, putting lives at risk. While a national
recall of all Takata air bags is not supported by the data as we now
understand it, we will continue to follow the field and testing data
wherever they may lead. Let me be clear to you, Mr. Chairman, and to
the Committee and the American people. As we find evidence supporting
the need to expand the regional recalls or to move to a national recall
of all Takata air bags, we will use all of our authority as necessary
to ensure that such a recall takes place.
Finally, in addition to requiring these recalls, NHTSA has taken
quick and aggressive action as needed to compel the information we need
from industry to protect motorists. We have issued Special Orders,
which are equivalent to subpoenas under our statute, to Takata and
Honda to produce documents and provide answers to our questions. As our
investigation advances, we will continue to use every tool available to
the agency to identify the cause and scope of the malfunctioning air
bags and protect the motoring public. And, if we find evidence of
wrongdoing, those responsible will be held accountable to the full
extent of the authority Congress has provided to us, including but not
limited to maximum civil penalties and agency orders.
Thank you again for this opportunity to testify, and I am happy to
answer your questions.
Senator Nelson. Senator Markey?
Senator Markey. Thank you very much.
Mr. Friedman, how can you justify calling for a mandatory
nationwide recall of Takata driver-side airbags while
continuing to allow a patchwork of voluntary and regional
recalls for Takata's passenger-side airbags?
Mr. Friedman. Senator, two things. First of all, these
regional recalls are not voluntary, period. I have in my hand
letters, the same letters that each of the car companies are
sending to all of the affected consumers that state,
``Important Safety Recall Notice.'' This is from Honda, who,
frankly, I was frustrated to hear them even at times calling
this a service campaign. This is a recall.
They also very clearly state, ``Honda has decided''----
Senator Markey. Can I--why are you not making the same
recall for passenger-side airbags?
Mr. Friedman. Senator, that is based on the data.
If we could switch to the chart based on--yes, that test
chart.
Because we didn't want to be in a position of waiting for
another rupture, we pushed the auto industry and Takata to test
airbags, not just in the affected regions but all over the
country.
Senator Markey. Can I just ask you to do this? Kim Kopf is
sitting over here. Her sister died in a passenger-side airbag
accident. So what do you tell Kim and her family about her
sister and everyone else's sister who is now sitting in that
same passenger seat now in vehicles all across the country,
given the fact that Kim has lost her sister?
Why are the passenger-side airbags not being recalled? Her
sister was driving a Subaru with a Takata airbag in a non-humid
state. Why not issue that same recall order as a result for
every passenger-side airbag as well?
Mr. Friedman. Senator--and what I say to you: This is the
first I have heard of your accident. Please, get us the details
of what happened. I want to know what happened to your sister.
It is an utter tragedy, clearly, what happened to your sister.
If we can get information from you on exactly what happened so
that we can determine if this was an airbag rupture outside of
those regions, you could help other Americans potentially
protect themselves if there is data out there.
We will always follow the data. We will always follow the
information. That is why we have pushed the automakers to test
this.
The challenge that we face, Senator, is, without
information--the Safety Act requires us, requires us, to act
based on information about unreasonable risk. If I have no
information about an unreasonable risk outside those areas,
then I am not able to force the automakers to recall outside
those areas.
In a situation, especially with a----
Senator Markey. Look, you know, honestly----
Mr. Friedman.--limited airbag supply----
Senator Markey. Can I just say this? Her----
Mr. Friedman.--what you are potentially doing, Senator, if
I did a national recall without the data----
Senator Markey. Her sister----
Mr. Friedman.--is putting someone's life at risk in
Florida.
Senator Markey. Her sister was in Arizona, okay? It goes up
to 110, 120 degrees in Arizona in the summer. That car can be
driven over to southern California or driven over to Texas. It
could be driven to Florida. You don't know what any of these
family members are going to be doing. It could be a used car
that is sold and just taken to another state.
I mean, it just seems to me that you, as the agency chief,
should err on the side of safety, knowing that these vehicles
move from state to state. As the chairman said, people are
going to Florida from pretty much every state in order to
escape the cold in the winter or to visit Disney World. And we
know that. And once they hit those conditions, an accident
could happen.
And so why don't we just recognize the mobile nature of our
society, the danger that each person runs?
And, by the way, I don't accept the fact that there is no
risk in really warm weather in Arizona or other states, because
we have other states here that are outside the humid area that
have had these incidents.
So I just don't know why you don't say to all these
families who have already lost people that the least that is
going to happen is that no other family members of any other
family in America is going to suffer the same fate.
Mr. Friedman. Senator, that is my solemn goal in doing all
of our efforts, is to put safety first. If we have evidence
that indicates this should be a national recall, we will do
that. Right now----
Senator Markey. OK, but----
Mr. Friedman.--the challenge, Senator, is, what you are
asking me to do, without information, is to put someone's life
at risk in Florida based on a lack of information elsewhere in
a situation where airbag supplies are limited. We are pushing
Takata incredibly hard to----
Senator Markey. I just, honestly----
Mr. Friedman.--get more airbags produced.
Senator Markey. You heard Takata today. Takata is not even
saying they support your recall right now.
Mr. Friedman. It is ridiculous. It is frustrating. It is
unacceptable.
Senator Markey. How can you trust a company, Mr. Friedman,
who, in answer to my question today about whether or not they
support your nationwide recall for driver's side, says they
cannot give an affirmative answer to that? That is a
frightening answer from a company who is responsible for
ensuring that all information about the danger of these airbags
is made public.
You should just err on the side of safety, Mr. Friedman.
Mr. Friedman. Senator, we----
Senator Markey. And, finally, if I can, Toyota believes
that its passenger-side airbags being driven in some humid
states are so dangerous that it told dealers to disable them
and warned passengers not to sit in the passenger seats.
Do you think Toyota was right to warn its dealers and
vehicle owners in that manner?
Mr. Friedman. Senator, first, to address one of the
previous issues of people in and out of states, first of all,
let me be clear. The data indicates that the median time to
failure for these airbags is 10 years. If you are coming in and
out of these states or you are in them for only a short period
of time, the data does not indicate that you are facing the
same risk as someone who lives there.
Further, if you look at the information----
Senator Markey. Answer the Toyota question before my time
runs out.
Mr. Friedman. Senator, you can drive a vehicle without
someone in the passenger seat, but even if you drive a vehicle
without someone in the passenger seat, if that airbag ruptures,
that driver is in danger. Therefore, disabling an airbag and
putting a label on that vehicle saying ``Do not put anyone in
this passenger seat'' is a way to protect the driver from a
dangerous airbag.
Senator Markey. So you approved Toyota's plan to do that?
Mr. Friedman. Senator, it is not a question of approval.
These are defective parts, and, therefore, they are broken
parts.
Senator Markey. OK. Well, if you did approve that plan,
then why didn't you tell other manufacturers with passenger-
side Takata airbags to issue the same warning?
Mr. Friedman. Senator, as I said, we did not approve this
one way or another. These are broken parts, and manufacturers
are allowed to disconnect broken parts.
Senator Markey. Here is the letter that came from NHTSA to
Toyota. This letter serves to acknowledge Toyota Motor
Engineering and Manufacturing--it is a notification from the
National Highway Traffic Safety Administration of a safety
recall which will be conducted pursuant to Federal law for the
products listed below. And the product that we are referring to
is the airbag that is in discussion.
And it says in your letter that, as an interim measure, the
dealer will disable the front passenger airbag and advise the
customer not to use the front passenger seat until a
replacement inflator is installed.
So that is your letter to Toyota.
Mr. Friedman. That is accurate, Senator. That is our letter
acknowledging----
Senator Markey. So, again, if that is the case, then why
not have a similar letter go from every other manufacturer to
warn people of a potential passenger-side airbag catastrophe?
Mr. Friedman. Senator, I believe there may be some
confusion in the process here. We do not approve remedies. What
that letter is is called a ``recall acknowledgment letter.''
That is us acknowledging to them what they told us. That is our
way of holding them to the decisions that they have made. It is
not our letter telling them what to do. It is simply us
acknowledging their steps.
Senator Markey. You know, it just kind of says to me that
you are seeing yourself as some detached processor of a
decision made by a manufacturer of vehicles, Toyota, that has
tremendous implications for every other vehicle that has the
same kind of Takata airbag, that a catastrophic consequence is
possible.
And I don't understand how you can process something like
this, agree with it essentially, hold the manufacturer to the
implementation of it, and not simultaneously be saying, this is
the warning bell going off, that if Toyota believes that this
is so dangerous, that the other manufacturers, as well, should
have the same responsibility to make sure that those airbags
are recalled.
So I just say to you, Mr. Friedman, that, from my
perspective, there is a higher responsibility that, as an
agency, we have to call you to.
And I thank you, Mr. Chairman.
Senator Nelson. And you will acknowledge, because you heard
the testimony today, that each of these automobile
manufacturers are handling the recalls in a different way,
which is all the more adding confusion. You heard Chrysler say
they are not going to start until the middle of December. And
you have to have concerns about whether these automakers are
responding appropriately.
Mr. Friedman. I have serious concerns. We have actually had
to push Chrysler before in previous cases to accelerate the
production of parts, to get notices out to consumers.
After hearing what they said, I don't accept that there is
any reason why they should wait to notify consumers about these
recalls until they have the parts. Consumers need to know there
is a risk in Chrysler vehicles because of these airbags.
Consumers need to be aware of that risk.
Senator Nelson. Do you have under law the ability to fine
them if they don't respond quickly to replace these defective
airbags?
Mr. Friedman. We have authority under law to require an
accelerated remedy. And if we determine that they have tools
that they could be putting into place to provide a remedy more
quickly than they currently are, yes, we can require them to
act.
We are currently in the process of trying to ask and
determine that exact question. We have already pushed Takata to
increase their production from about 300,000 units a month to
about 500,000 units a month.
Senator Nelson. Do you have the legal authority to fine
them on a daily basis if, in fact, they are not replacing the
airbags?
Mr. Friedman. If we find that they could be doing more and
they are failing to do so, absolutely. We can order them to
accelerate the remedy, and if they don't do it, we can fine
them.
Senator Nelson. OK. Well, if somebody is driving around in
a lethal deathtrap, isn't that enough evidence, without getting
their airbag replaced, that you ought to start sticking it to
the manufacturers with a severe financial penalty?
Mr. Friedman. Senator, my understanding of the Safety Act
is that it requires us to--before we can do that, that it
requires us to be able to demonstrate that they could be doing
more than they are.
So we started from the beginning, digging in, trying to
understand. We are contacting other suppliers and trying to get
them to be able to step up to supply more airbags to these car
companies.
Senator Nelson. I don't want to beat up on you, but if you
could meet Corey Burdick from central Florida, the father of
two little boys, a firefighter, who now has no ability because
he does not have an eye as a result of a piece of this shrapnel
coming in his eye, then it would seem to me that that would
give you the legal authority to whack it to these people to
replace those defective airbags.
Senator Blumenthal?
Mr. Friedman. Senator----
Senator Blumenthal. Thank you.
Mr. Friedman, thanks for being here today. I take your
comments about going after the automobile manufacturers and
pushing them. I want to ask you about your responsibility.
You have heard the head of Takata say today the maximum
they can commit to produce are 300,000 replacement parts a
month. Their hope, their hope, is to go to 450,000. They are
unwilling to commit to anything more than 300,000 replacement
parts a month, which means it will take 3 years. And even if
they meet the 450,000 goal, the hope, it will take more than 2
years.
Isn't that unacceptable?
Mr. Friedman. Absolutely unacceptable.
Senator Blumenthal. And so will you commit to use the power
that you have under the Motor Vehicle Safety Act--it is section
30120(c)(iii), as you know--to order that the car manufacturers
use replacement parts from other makers of airbags?
Mr. Friedman. Senator, we will use all of our authority to
the full extent----
Senator Blumenthal. I don't want a vague answer.
Mr. Friedman. Senator----
Senator Blumenthal. I want, really, a ``yes'' or ``no''
answer, because this is a pretty clear question. I know that
you will use all of your authority to do the right thing in the
public interest.
I want to know that you will recommend to the Secretary of
Transportation that you will order the automobile manufacturers
to use replacement parts, even if it means Takata sharing
proprietary information with them, so that Americans are kept
safe on the roads for the next 2 to 3 years.
Mr. Friedman. Senator, if I can determine that that can be
done safely, absolutely, I will. Absolutely. I have to----
Senator Blumenthal. How long will it take you to make that
determination?
Mr. Friedman. We are in contact with two different airbag
suppliers. We are asking them what their capacity is, what
their compatibility is. There may need to be tests involved to
ensure, because each airbag is tuned for each car, that they
will be safe.
We are hiring an expert in propellants in airbags--we are
seeing a contract with an expert in propellants in airbags. We
need to get all of these people involved in making sure----
Senator Blumenthal. Well, I understand, you know, your
testimony says that you have been in communication with other
airbag inflator manufacturers to assess what, if any,
capability those companies have to fill the demand for
replacement parts.
You have the power to order them to break exclusivity
agreements, to share proprietary information. I want to know by
when you will finish that determination.
Mr. Friedman. Senator, I will finish that as soon as we can
determine if that is safe. I have to put the safety of those
getting these replacement airbags first. I will do so, and we
will do so as quickly as humanly possible with the resources
Congress has provided us.
Senator Blumenthal. Mr. Friedman, would you agree with me
that there is more than sufficient reason to believe that NHTSA
was not furnished with enough information by the auto
manufacturers about these defective products?
Mr. Friedman. Senator, I can't prejudge a case, but we
have, because of the exact same concerns that you have, we have
demanded, under oath, information that will reveal exactly that
thing. These are gut-wrenching incidents, and----
Senator Blumenthal. Well, I know you have asked for this
information under oath. But, you know, when I was a prosecutor,
we had something called ``probable cause,'' which is enough to
indict. I recognize you don't have criminal authority. You
would agree with me that there is pretty close to probable
cause here to believe you weren't given the information you
need to protect the public.
Mr. Friedman. Senator, I am not a lawyer, so I don't know
the exact meaning of ``probable cause.'' But what I will say is
that I don't trust that Takata has provided us with--we know
that Takata has not always provided the auto industry with
accurate information of all the lots involved. We know that we
haven't always gotten the information that we need.
We are looking into this. I have serious concerns, and we
will hold them accountable based on the findings of our
investigation.
Senator Blumenthal. So far as the information that is
concerned, the maximum penalty now is in the range of $30
million. As you know, Senator Markey and I and Senator Nelson,
our Chairman, have proposed the Automaker Accountability Act,
which would lift that $35 million cap on penalties--it would
eliminate the cap. Would you support that legislation?
Mr. Friedman. Senator, we will take all the authority you
give us and use it to the full----
Senator Blumenthal. Do you support the legislation?
Mr. Friedman. Senator, we want that raised.
Senator Blumenthal. That is a ``yes.''
Mr. Friedman. The Secretary has already asked for it to be
raised to $300 million. Me personally, David Friedman, if you
give me the authority to do more, I will gladly accept that.
Senator Blumenthal. Well, don't you agree, as the current
acting administrator, that $35 million, $300 million, may be
inadequate for some cases, as this one, where people have died
as a result of failing to report sufficient information?
Mr. Friedman. There is no doubt that the greater the fines
that we can levy on the automakers, the greater power we have
to keep them establishing the new normal that we need from
them: to always provide us with all the information we need and
to quickly act on that information and to never fight us when
we provide them with the data, like we are on driver-side
airbags, that these recalls need to happen nationwide.
Senator Blumenthal. My time has expired, but I just want to
finish by making the request that, by the beginning of next
week, you come back to this committee in writing, after
consulting with the Secretary, about how quickly you will have
a determination as to other companies that can provide these
replacement parts and whether you will recommend to the
Secretary--in other words, the timeline for finishing that
process. And I hope it will be measured in days, not weeks.
I know that the Secretary of Transportation--I have talked
to him on a number of occasions--shares our concerns on this
committee, very strongly shares concerns about the American
public. And I commend him for not only sharing those concerns
but also acting to appoint a NHTSA Administrator, which we
welcome.
And I would like you to give us a date by which you will
make a recommendation as to how replacement parts will be
accelerated under 30120(c)(iii) of the Motor Vehicle Safety Act
so that Americans can be provided with those replacement parts
as quickly as possible.
Because, otherwise, we will be waiting 2 to 3 years--under
the most optimistic estimate, 2-plus years; under the more
realistic estimate, 3 years--for Americans to be safe on
American roads with these airbags in their cars. Because they
simply can't be replaced if there aren't the parts to replace
them.
Thank you.
Senator Nelson. Mr. Friedman, I agree with you that you
don't have the resources that your little agency needs. And I
really feel kind of sorry for your successor, who has now been
named by the president, because as he goes through the
confirmation process, needless to say there are going to be a
lot of questions that are going to be asked of him with regard
to the conduct of your agency on a going-forward basis.
And just to put this into context, the amount of vehicles
with Takata airbags worldwide, Senator Blumenthal, is something
like 100 million. In the U.S., the amount of Takata airbags are
something like 30 million. So this could be a problem of
gargantuan proportions that is going to need the aggressiveness
of the Federal regulator to try to protect the public.
And we appreciate the hot seat that you are on. I am going
to be visiting with your boss, who is the Secretary of
Transportation. I am going to ask him, as I have said earlier,
to start socking it to the folks that are dragging their feet,
not answering questions, with the financial penalties that he
has under law. And then we will try to change the law so as to
eliminate that cap.
I want to thank everybody for participating.
The meeting is--and before I adjourn it, let me say that
the record will remain open for 10 days. And all witnesses are
expected to answer any and all questions for the record from
the members of this committee.
The Committee----
Mr. Friedman. Mr. Chairman?
Senator Nelson. Yes.
Mr. Friedman. I apologize. I am wondering if I could just
say one more thing to close.
Senator Nelson. Of course.
Mr. Friedman. NHTSA is an agency of people who wake up
every day with nearly 100 reminders of how we need more
resources and to work harder to protect the American public,
because nearly every day 100 people die on our roads because of
drunk driving, distracted driving, and vehicle defects. Each
hour, we come to work with over 2,000 reminders of people who
are injured, over 2,000 people every hour, of our need for more
resources and to continue to improve and act aggressively to
save people's lives.
That is what every NHTSA employee and what I do every
single day, is dedicate ourselves to protecting the American
public. We will work aggressively in this case. I welcome your
support. I welcome the added resources that you are looking to
provide us. We will act aggressively to protect the American
public.
Senator Nelson. Mr. Friedman, we appreciate that, and we
appreciate the dedication of the Federal employees who often
are not given that appreciation. And on behalf of the
Committee, I express that.
We now have a new problem that we are addressing, which is,
in effect, a live hand grenade in front of a driver and a
passenger in the vehicles that have been enumerated. And it
must be addressed, and it must be addressed immediately.
And, with that, thank you. And the meeting is adjourned.
[Whereupon, at 12:47 p.m., the hearing was adjourned.]
A P P E N D I X
Response to Written Questions Submitted by Hon. Richard Blumenthal to
Hiroshi Shimizu
Question 1. USCAR-24 on ``Inflator Technical Requirements and
Validation'' is a specification published by the United States Council
for Automotive Research. It outlines testing procedures for the
inflator module used in airbags and requires the inflator to undergo a
number of tests in a variety of extreme conditions, including high
humidity. USCAR represents a collaboration of Chrysler Group LLC, Ford
Motor Company, and General Motors.
Mr. Shimizu, does Takata require all of its inflators to pass
USCAR-24 specifications? Please describe Takata's understanding of its
obligations under USCAR-24.
Answer. Takata does not require all of its inflators to pass USCAR-
24 specifications. The USCAR-24 specifications were developed by a
private industry council and are not a Federal regulatory requirement.
USCAR-24 was published in 2004 and applies only to products delivered
to Ford, Chrysler, and General Motors. Other automakers have prescribed
their own testing specifications for inflators.
Question 2. Takata has conceded that ammonium nitrate is the main
ingredient for the inflator's propellant, but this inexpensive chemical
is known to have a tendency to absorb moisture. Therefore, it would be
important for any inflator design to make sure the propellant is
hermetically sealed.
Mr. Shimizu, you said during the hearing that Takata has taken ``a
couple steps'' to improve the problems the robustness of the product
against the humidity. Please provide a more detailed technical
description of what changes Takata has made to improve the safety of
your inflators. Please provide information on specific changes made to
the propellant formula as well as to the design and production of the
inflator. For example, what have you done to make sure the propellant's
container is better sealed off from moisture?
Answer. Takata has made many improvements in its inflator
manufacturing processes and product handling since 2000. These include,
among others, improvements in the press technology used to form
propellant wafers and tablets in Takata's propellant-manufacturing
facility in Moses Lake, Washington, and improvements in plant-wide
humidity control measures in Takata's inflator-assembly plant in
Monclova, Mexico. The two specific improvements highlighted by Mr.
Shimizu were the following:
First, beginning in September 2001, Takata utilized an ``auto-
reject'' function that can detect and reject propellant wafers
with inadequate compression by monitoring the compression load
that had been applied. However, for the next year, that
function could be turned on and off manually by the machine
operator in the plant. No later than September 12, 2002, the
machine was modified by the addition of an interlock feature
that precluded production of propellant wafers without the
auto-reject function in place.
Second, some propellant wafers used in inflators produced at
Takata's plant in Monclova, Mexico, between October 4, 2001 and
October 31, 2002 may have been exposed to uncontrolled moisture
(ambient humidity) conditions. Those wafers could have absorbed
moisture beyond the allowable limits. Production processes were
revised by November 1, 2002 to assure proper handling and
environmental protection of in-process propellant. Additional
improvements in humidity control were instituted at Monclova
more recently.
With regard to the integrity of the inflator seal, each inflator
and production lot undergo testing at the time of production. Every
inflator coming off the production line is subjected to a helium leak
test to check that the inflator vessel is properly sealed. Takata has
improved the method used for the helium leak test to make the test more
accurate. In addition, samples of every inflator production lot undergo
weld-seam analysis, hydroburst structural testing, and ballistic
performance testing. Moreover, Takata has increased the thickness of
the O-ring used in passenger-side inflators to improve the quality of
the seal.
Most of the inflators subject to recall use a propellant
formulation called ``2004,'' which first went into production in 2000,
and the replacement units for most of these inflators also contain the
2004 propellant formulation. Takata has introduced additional lines of
propellant, including the ``2004L'' formulation, which went into
production in 2008. Both the 2004 and 2004L propellant formulations use
ammonium nitrate as the oxidizer, but the 2004L propellant uses a
different fuel (BTA) from the fuel used in the 2004 formulation (BHT).
In addition, all inflators using the 2004L propellant, and some
inflators using the 2004 propellant, include desiccant in the design.
______
Response to Written Questions Submitted by Hon. Bill Nelson to
Rick Schostek
Loaner/Rental Car Availability
Question 1. You indicated in your testimony that you are providing
free access to loaner cars and rental cars to your customers who own
vehicles with recalled, defective Takata air bags. Specifically, in
your written testimony submitted to the Committee, you stated:
``Customers with affected vehicles who desire alternative
transportation until their car is fixed have access to loaner cars and
rental vehicles--at no cost to the customer--if we experience a
situation where a dealer's service capacity or the availability of
replacement air bag inflators is insufficient to meet the customer's
needs.''
Similarly, the Honda website states that: ``For customers concerned
about the issue of Takata airbags in certain Honda and Acura vehicles,
our customer service will make arrangements for, as appropriate, the
replacement of airbag inflators and the provision of or reimbursement
for temporary alternative transportation.''
How does Honda define the terms ``access to'' and ``as
appropriate'' in the context of offering loaner cars or rental car
reimbursement to owners who cannot have defective Takata air bag
inflators replaced in a timely manner?
Answer. American Honda uses the terms ``access to'' and ``as
appropriate'' because dealer vehicle programs can vary and not all
customers request the same type of alternate transportation. For
instance, not all dealers participate in our loaner car program and
therefore, some customers are only offered rental cars. Similarly, some
customers may only need a ride to work while their vehicle is repaired.
Most dealers offer a shuttle service to address those needs. Honda's
policy is to use our best efforts to accommodate a customer who
requests a vehicle.
Question 1a. Has Honda issued a specific written policy to dealers
to implement these statements?
Answer. Honda's Dealer Operation Manual includes our written policy
for use of rental or loaner cars. The program's primary purpose is to
make available to service customers alternate transportation while
their vehicle is being serviced or repaired. On November 26, this
policy was changed for airbag inflator affected customers. The dealer
has been empowered to authorize up to a 3 day rental without contacting
the District Parts & Service Manager. After the 3 day period, we ask
that the District Parts & Service Manager be notified.
Question 1b. What steps is Honda taking to ensure that the loaner
or rental cars offered to consumers are not subject to either the
Takata recall, or any other safety related recall?
Answer. The latest model affected by the Takata airbag inflator is
the 2011 Element. Since rental car fleets and Honda loaners consist of
new model vehicles, they are not affected by the inflator campaigns.
For all recalls, American Honda mails recall notices to the registered
owner. This includes vehicles that are owned by rental car companies.
Recall Repairs
Question 2. Do you include a provision in the franchise agreements
with your dealerships that requires them to perform safety recall
repairs prior to offering used cars of your brand/make for sale to
consumers?
Answer. Yes. In section 12.12 of the Honda and Acura Dealer Sales
and Service Agreements, authorized Honda and Acura dealers specifically
agree to ``perform any and all warranty, campaign, recall, product-
improvement or product-update service in compliance with instructions
and directives issued by American Honda. . . .'' With regard to safety
recalls, the primary instructions and directives are contained in the
Honda Service Operations Manual, and the Acura Dealer Operations
Manual, which contain specific policies and procedures relating to
parts and service support for Honda and Acura owners. Section 7.2.1 of
those Manuals both read, in pertinent part, as follows: ``It is illegal
for a dealership to sell or lease a new vehicle that is subject to a
safety or emissions recall without first completing the recall
procedure outlined in the applicable service bulletin. If a dealership
sells or leases a vehicle subject to a safety or emissions recall to a
customer without first completing the recall procedure, the dealership
may be entirely responsible for all consequences, including any claims
or lawsuits that may arise from the failure to complete a recall
procedure prior to sale/lease, and the defense and indemnity of
American Honda in such a claim or lawsuit.''
Question 3. Do you include a provision in the franchise agreements
with your dealerships that requires them to perform safety recall
repairs prior to offering used cars of other brands/makes for sale to
consumers?
Answer. No, we do not, as we cannot compel Honda or Acura dealers
to complete, nor can we compensate Honda or Acura dealers for
completing, safety recalls on other brands/makes. In the automotive
industry, compensation to dealers for completion of safety recalls can
only be paid by the manufacturer of that brand/make; manufacturers
cannot pay warranty or recall compensation to dealers of other brands/
makes. Moreover, the genuine OEM parts needed to complete a safety
recall can only be sourced from the manufacturer of that brand/make.
For these reasons, only a dealer of a particular brand/make can be
required to complete, and be compensated for, recall repairs on
vehicles of that brand/make.
Question 4. Do you compensate your franchised dealers the same for
safety recall repairs as for retail repairs, based on the same hourly
rate and the same time allowed for performing the repairs?
Answer. Yes, American Honda compensates dealers for recall repairs
in a manner identical to the compensation paid to dealers for warranty
repairs. This question asks about two aspects of recall compensation,
hourly rate and time allowance.
With regard to the hourly rate each Honda and Acura dealer's hourly
labor rate for recall and warranty repairs is typically the same as for
retail repairs. The primary, and unusual, exception is when the
dealer's requested hourly labor rate for recall and warranty repairs is
materially higher than the labor rates of other repair facilities in
the local market.
The time allowance is a different matter, as in the auto industry,
neither Honda/Acura nor, to our knowledge, any other auto distributor,
imposes time allowances on retail repairs. While all auto distributors
set time allowances for each type of recall and warranty repair, there
are no analogous time allowances for retail repairs. Dealers spend as
much time as they spend on a given retail repair, and auto distributors
have no control or even visibility into how long a dealer might spend
on that repair.
______
Response to Written Questions Submitted by Hon. Maria Cantwell to
Rick Schostek
Increasing the Rate of Repairs
Question 1. When a recall happens, it is rare that 100 percent of
affected vehicles end up being repaired. There is a lot we could do to
improve that rate--so I'd like to take a minute and talk to the
automakers about how you notify vehicle owners.
In addition to posting it on your website, it is my understanding
that you use postal mail as the way you inform consumers about recalls.
Well, it's 2014--and so I think it is high time to add e-mail to
the list of ways people are notified about a recall from their
automaker.
I'm not talking about replacing postal mail notifications, because
there are still people who don't use e-mail regularly, but do you think
adding an additional electronic recall notification--like an e-mail--
would improve repair rates for recalled cars?
Answer. As I indicated in my testimony, Honda has experimented with
numerous techniques to increase recall rates, including the use of
phone calls, overnight mail, and bilingual letters (English and
Spanish), just to name a few. Our experience is that e-mail provides
some lift in response rates. With regard to the current safety
improvement campaign, Honda has made 93,000 phone calls, mailed 132,000
post cards and sent 152,000 e-mails in addition to the first-class
letters we have sent. As discussed below, while e-mail notification can
be helpful, we do not always have access to e-mail addresses. In
contrast, an owner's address is typically on file with the various
departments of motor vehicle registration in the states.
Question 1a. When vehicles are purchased in your showrooms, do your
dealers collect the e-mail of the buyer?
Answer. Dealers routinely ask customers for an e-mail address as
part of the data collection process at time of purchase. It is not
however, mandatory and some customers do not wish to provide it.
Moreover, e-mail addresses change, and unlike physical addresses which
are on file with state departments of motor vehicles, there is no
established mechanism by which they are required to be updated.
Question 1b. Mr. Schostek--you mentioned that in Europe, vehicles
are required to have all safety recalls addressed each year when they
are registered. This is much like emissions testing requirements that
already occur today. What are the impediments to implementing such a
requirement in the United States? Mr. Kunselman, can you answer as
well?
Answer. There are numerous issues that would need to be considered
in pursuing such a proposal. Vehicle registration is an issue that is
within the province of state law. While the burden would be on the
states to adopt and implement such a proposal, there may be incentives
at the Federal level that could encourage a state to adopt a
requirement. A requirement that defects be remedied as a condition to
registration would probably be easier to implement in a state with an
emissions inspection requirement. It appears that about half of the
states have regional emissions testing programs in some or all parts of
the state. For those that do not, an alternative approach would need to
be developed, perhaps tied to a database with the registering
authority. Moreover, so that the requirement would not be overly
burdensome, the system should be flexible, in order to account for
factors such as the availability of parts and how recent the recall
campaign was undertaken.
The following is extracted from a report of the Inspector General
of the Department of Transportation:
High compliance rate for vehicle recalls. We found that three
of the four nations we visited or contacted had a high
compliance rate for vehicle recalls. For example, Japan has a
recall compliance rate of about 80 percent, Germany 100
percent, and the United Kingdom 92 percent. In contrast, ODI
considers a 65 percent recall compliance rate satisfactory.
Canada reviews manufacturer recalls on a case-by-case basis and
does not calculate an overall compliance rate. Further, Germany
and the United Kingdom have laws in place that require the
registration of a recalled vehicle with other governments,
while the United States does not have a similar law. Through
the registration system, the foreign counterparts can identify
vehicles that do not meet safety regulation requirements and
Germany can declare the vehicles legally inoperable until
inspected and repaired according to recall requirements. This
vehicle registration requirement may explain the higher
compliance rates of ODI's counterparts.\1\
---------------------------------------------------------------------------
\1\ Office of Inspector General, Audit Report, ``Process
Improvements Are Needed For Identifying and Addressing Vehicle Safety
Defects, Rpt. No. MH-2012-001, Oct. 6, 2011, pp. 20-21.
---------------------------------------------------------------------------
Ensuring Dealers Make Repairs
Question 2. Lieutenant Erdman testified that she had taken her car
in to the dealer three times between when they were notified about the
recall and when the accident occurred. But she was not told about the
recall and nothing was repaired.
As the automaker--and I'd like to get both Honda and Chrysler's
perspective on this--what proactive steps are you taking to ensure that
doesn't happen again--and your dealers check every single car coming in
the door for open recalls?
Answer. As noted in our response Senator Nelson's Question 2 above,
our Honda and Acura Dealer Sales and Service Agreement specifically
rquires a dealer to ``perform any and all warranty campaign, recall,
product-improvement or product-update service in compliance with
instructions and directives issued by American Honda.'' The Honda and
Acura Service Operations manuals provide additional detail as to how
the obligation is to be met. Our field staff met with every dealer
earlier this year to review our policy that requires every VIN be
checked for open recalls. We have also sent numerous communications to
dealers reminding them of our policy, including the most recent during
which every Honda and Acura dealer was contacted during the week of
November 30 by a member of our field staff.
Question 2a. Do you believe that we need to make it a requirement
under law that dealers perform those checks for all open recalls when
cars come in their door?
Answer. All dealerships and independent repair facilities could be
required to check for, and notify the customer of, any open recalls
before returning a vehicle to the customer. This is something we
already ask all of our dealers to do. Additionally, as I testified,
that all outstanding repairs for recalled vehicles be completed before
a vehicle can be registered in a state. This procedure is not unlike
the requirement that a vehicle pass emissions testing before it can be
registered.
Question 2b. What are the impediments to implementing such a
requirement in the United States?
Answer. It is already a Federal requirement that all new recalled
vehicles must be repaired prior to sale. Expanding this requirement to
include vehicles in use would add a number of complications. For
example, as a matter of practicality, it could only apply to dealers
who are servicing vehicles that are of the same brand or brands that
the dealer sells. Other dealers and independent shops do not perform
repairs of recalled vehicles. In addition, there is a need to address a
customer's right to refuse the repair.
______
Response to Written Question Submitted by Hon. Claire McCaskill to
Rick Schostek
Question. You have endorsed a proposal by the Auto Alliance that
rental car companies should be prohibited from renting unsafe recalled
vehicles only when the manufacturer has issued a ``do not drive''
warning on the vehicles. Have you issued a ``do not drive'' warning in
connection with recalled Takata airbags? If not, why not?
Answer. Honda generally does not sell its vehicles to fleets and as
such, has not taken a position on the legislation prohibiting rental
car companies from renting unsafe recalled vehicles. As independent
businesses, Honda and Acura dealers may, of course, sell vehicles to
fleet owners. Honda is not a member of the Auto Alliance. Honda sends
its recall notices to the owner of a vehicle, be it an individual or a
fleet, and the notices each receives is identical. Unless all owners
are advised not to drive a recalled vehicle, which would be highly
unusual, it is up to the owner of the vehicle--not Honda or Acura--to
determine whether or not to drive the vehicle until the repair has been
performed. There have been no such instructions on the recall notices
associated with the Takata-related recall notices. However, we urge
owners to have repairs made on recalled vehicles as soon as possible.
______
Response to Written Questions Submitted by Hon. Richard Blumenthal to
Rick Schostek
Question 1. USCAR-24 on ``Inflator Technical Requirements and
Validation'' is a specification published by the United States Council
for Automotive Research. It outlines testing procedures for the
inflator module used in airbags and requires the inflator to undergo a
number of tests in a variety of extreme conditions, including high
humidity. USCAR represents a collaboration of Chrysler Group LLC, Ford
Motor Company, and General Motors.
Mr. Schostek and Mr. Kunselman, do you believe Takata provided
prompt and adequate documentation regarding testing completed in
accordance with USCAR-24 specifications, throughout the history of your
respective company's relationship with Takata? Please describe and
provide documentation showing the nature of your communications with
Takata and vice versa, on this topic.
Answer. As of the time of this response, Honda is aware that it has
specifications for Takata airbag inflators that contain within them
testing procedures that Honda understands to be substantially similar
to those required by USCAR-24. In addition, Honda understands that
airbag inflators used by Honda are also commonly used by U.S.
automobile manufacturers who apply USCAR-24. Therefore, airbag
inflators used by Honda should have the same performance and satisfy
the USCAR-24 standard.
Question 2. National news outlets have reported that numerous cases
involving the defect were settled out of court, and that the details of
these settlements were sealed.
Mr. Kunselman and Mr. Schostek, did you report these cases to NHTSA
under your Transportation Recall Enhancement, Accountability and
Documentation (or TREAD) Act obligations?
Answer. Not all of the eligible claims alleging that a death or
injury occurred as a result of a defect in a Takata airbag inflator
were reported by Honda to the NHTSA as required by the TREAD Act. The
audit of Honda's TREAD reporting disclosed that there were 8 such
claims that were required to be reported under the requirements of the
TREAD Act that were not reported. However, separate from and in excess
of the reporting required under the TREAD Act, Honda began providing
the NHTSA in September of 2009 with detailed information in its
possession regarding each confirmed rupture event. This communication
continues today.
Question 2a. Mr. Kunselman and Mr. Schostek, before settling these
cases, did you conduct any internal investigations and determine that
there was documentation that you did not want to be revealed in
discovery?
Answer. Honda did not conduct any investigation prior to settlement
of Takata airbag inflator claims that determined that there were
documents that Honda did not want to produce in discovery.
Question 2b. Mr. Kunselman and Mr. Schostek, did the terms of the
settlements include any prohibition on conveying information to NHTSA
or other appropriate authorities? Do you agree that such a prohibition
would be contrary to Federal law?
Answer. None of the settlement agreements regarding the Takata
airbag inflator prohibited disclosure of the settlement terms if a
party to the agreement is compelled to do so by an applicable
government process or court order. Honda agrees that private settlement
agreements cannot forbid the disclosure to the NHTSA or other
appropriate authorities of information that must be provided to the
NHTSA or governmental authorities.
______
Response to Written Question Submitted by Hon. Deb Fischer to
Rick Schostek
Question. Mr. Schostek, I received a disturbing message from one of
my constituents who is concerned about the lack of information
concerning vehicles impacted by these recalls. She has a Honda Pilot
that is her family's only four wheel drive vehicle, but she is nervous
every time she uses it. She has tried to contact Honda for months to
get definitive information about whether or not her car may contain
defective airbags, but she has not been able to get an answer. How can
I get someone from your company to constructively communicate to my
constituent on this matter?
Answer. Thank you for your question following the Senate Commerce
full committee hearing on ``Examining the Takata Air Bag Recalls and
NHTSA's Recall Process,'' which took place on November 20. As I
emphasized during the hearing, the safety and satisfaction of our
customers is Honda's highest priority.
Ms. Haddad contacted Honda's Customer Relations with concerns about
her 2004 Honda Pilot, which is registered in Nebraska. When Ms. Haddad
contacted Honda in early November, her vehicle was not subject to the
regional safety improvement campaign being conducted for driver airbag
inflators in II states and territories. Since that time, and as Honda
announced during the House Energy and Commerce committee hearing on
Takata airbag recalls on December 3, Honda has transitioned the
regional safety improvement campaign for driver airbag inflators to a
national campaign. As such, Ms. Haddad's Pilot is now within the scope
of affected vehicles. Honda's Customer Relations department has been in
touch with Ms. Haddad to inform her of her vehicle's status. When she
visits a Honda dealership for repairs, her driver airbag inflator will
be replaced at no cost to her. If there is any delay in repairs or if
Ms. Haddad desires alternative transportation while her vehicle is
being fixed, Honda dealers have been instructed to provide rental or
loaner cars to customers free of charge.
We take our customers' concerns very seriously and endeavor to
address them to the best of our ability. If you or your staff has
further questions regarding Honda's recall process and policies, please
do not hesitate to contact me or Ed Cohen.
______
Response to Written Questions Submitted by Hon. Bill Nelson to
Scott G. Kunselman
Loaner/Rental Car Availability
Question 1. In your oral testimony, you stated that Chrysler would
likely make loaner or rental cars available to consumers who own
vehicles with defective Takata air bags whose cars cannot be repaired
in a timely manner.
What is Chrysler's specific policy regarding the provision of
loaner cars or rental car reimbursement to owners who cannot have
defective Takata air bag inflators replaced in a timely manner?
Answer. Chrysler's goal is to have the replacements parts available
and quickly service the vehicle. Our policy is to make rental or loaner
cars available to customers who need them as we deploy our field
action. Customers can contact their dealer or us through our hotline,
which is available on each vehicle brand's website, and we will address
their needs on a case-by-case basis.
Question 1a. Has Chrysler issued a specific written policy to
dealers to implement these statements?
Answer. Yes. On December 12, 2014, Chrysler issued a revised
Warranty Bulletin to its dealers, clarifying that dealers have the
discretion to provide loaner vehicles to customers affected by a safety
recall, including the Takata airbag campaigns.
Question 1b. What steps is Chrysler taking to ensure that the
loaner or rental cars offered to consumers are not subject to either
the Takata recall, or any other safety related recall?
Answer. It is our understanding that, due to their age, no Chrysler
vehicles in the current rental fleet are subject to any Takata inflator
recalls. Rental cars are typically returned after 18 months of service
and the Chrysler vehicles included in the Takata inflator recalls are
2007 MY or older. Additionally, Chrysler understands that the major
rental car companies reached an agreement in 2012 to voluntarily stop
renting or selling vehicles subject to a manufacturer recall.
Recall Repairs
Question 2. Do you include a provision in the franchise agreements
with your dealerships that requires them to perform safety recall
repairs prior to offering used cars of your brand/make for sale to
consumers?
Answer. Yes, this requirement is included in Chrysler's Dealer
Policy Manual, which is incorporated into Chrysler's franchise
agreements by reference.
Question 3. Do you include a provision in the franchise agreements
with your dealerships that requires them to perform safety recall
repairs prior to offering used cars of other brands/makes for sale to
consumers?
Answer. Yes, this requirement is included in Chrysler's Dealer
Policy Manual, which is incorporated into Chrysler's franchise
agreements by reference.
Question 4. Do you compensate your franchised dealers the same for
safety recall repairs as for retail repairs, based on the same hourly
rate and the same time allowed for performing the repairs?
Answer. Yes. Prior to the launch of each recall, a time-study is
completed to define the required labor to perform the repair. The
dealer is compensated for the time defined in the study.
______
Response to Written Questions Submitted by Hon. Maria Cantwell to
Scott G. Kunselman
Increasing the Rate of Repairs
Question 1. When a recall happens, it is rare that 100 percent of
affected vehicles end up being repaired. There is a lot we could do to
improve that rate--so I'd like to take a minute and talk to the
automakers about how you notify vehicle owners.
In addition to posting it on your website, it is my understanding
that you use postal mail as the way you inform consumers about recalls.
Well, it's 2014--and so I think it is high time to add e-mail to
the list of ways people are notified about a recall from their
automaker.
I'm not talking about replacing postal mail notifications, because
there are still people who don't use e-mail regularly, but do you think
adding an additional electronic recall notification--like an e-mail--
would improve repair rates for recalled cars?
Answer. As a normal business practice, Chrysler notifies affected
consumers using methods beyond the regulatory requirement. After
sending the initial required mailing and follow-ups for undeliverable
addresses, Chrysler continues to notify customers every 6 months via
first class mail until our completion rate thresholds are met. In cases
where completion rates are not progressing at the expected rate,
Chrysler may deploy other outreach methods to enhance performance, such
as e-mail.
Question 1a. When vehicles are purchased in your showrooms, do your
dealers collect the e-mail of the buyer?
Answer. At the time of a purchase, our dealers request a buyer's e-
mail.
Question 1b. Mr. Schostek--you mentioned that in Europe, vehicles
are required to have all safety recalls addressed each year when they
are registered. This is much like emissions testing requirements that
already occur today. What are the impediments to implementing such a
requirement in the United States? Mr. Kunselman, can you answer as
well?
Answer. There are always opportunities to improve the process.
While there may be obstacles to implementing this potential
requirement, Chrysler would be open to exploring this and other
options.
For Industry, Ensuring Dealers Make Repairs
Question 2. Lieutenant Erdman testified that she had taken her car
in to the dealer three times between when they were notified about the
recall and when the accident occurred. But she was not told about the
recall and nothing was repaired.
Question 2a. As the automaker--and I'd like to get both Honda and
Chrysler's perspective on this--what proactive steps are you taking to
ensure that doesn't happen again--and your dealers check every single
car coming in the door for open recalls?
Answer. When customers bring their vehicles to the dealership for
service, it is Chrysler's policy to clearly communicate to customers
the open recalls that exist on that vehicle. All Chrysler dealers use
electronic systems that require the VIN to be entered before any
assessment of the vehicle can be completed. This system automatically
notifies the dealership staff of open recalls as well as the complete
vehicle history for work done in any authorized Chrysler dealership. It
is Chrysler's policy that dealers not only communicate information to
customers about open recalls, but also make every effort to ensure that
the customer's open recall is serviced on site at that time or that the
customer schedules an appointment to service the recall before leaving
the dealership.
Question 2b. Do you believe that we need to make it a requirement
under law that dealers perform those checks for all open recalls when
cars come in their door?
Answer. As outlined in Question 2a, Chrysler already requires our
dealers to perform checks for open recalls when cars come to a
dealership.
Question 2c. What are the impediments to implementing such a
requirement in the United States?
Answer. As noted, Chrysler has already instituted this practice.
______
Response to Written Questions Submitted by Hon. Claire McCaskill to
Scott G. Kunselman
Question 1. You have endorsed a proposal by the Auto Alliance that
rental car companies should be prohibited from renting unsafe recalled
vehicles only when the manufacturer has issued a ``do not drive''
warning on the vehicles. Have you issued a ``do not drive'' warning in
connection with recalled Takata airbags? If not, why not?
Answer. No, Chrysler has not issued a ``do not drive'' warning
because the data to which we have had access does not support such a
warning.
Question 2. Ten years ago, Raechel and Jacqueline Houck were killed
by a recalled Chrysler 2004 PT Cruiser, after the safety defect caused
it to catch on fire. Did your company issue a ``do not drive'' warning
to owners of those vehicles?
Answer. Chrysler did not issue a ``do not drive'' warning in
connection with Chrysler Recall D18 and does not agree that the recall
condition caused the Houck vehicle to catch fire.
Question 3. Knowing what happened to Raechel and Jacqueline, do you
think that the rental company should have been allowed to rent them
that car, without getting the safety recall performed first?
Answer. Chrysler supports requiring that rental car companies
ground all vehicles subject to a stop drive recall until they are
repaired. For all other recalls, we support requiring that rental car
companies ground vehicles until they are repaired, unless the rental
car company: (1) provides customers with written notification of any
un-remedied defect or noncompliance, including pre-remedy precautions;
and (2) receives a written acknowledgement by the customer of receipt
of notification.
______
Response to Written Questions Submitted by Hon. Richard Blumenthal to
Scott G, Kunselman
Question 1. USCAR-24 on ``Inflator Technical Requirements and
Validation'' is a specification published by the United States Council
for Automotive Research. It outlines testing procedures for the
inflator module used in airbags and requires the inflator to undergo a
number of tests in a variety of extreme conditions, including high
humidity. USCAR represents a collaboration of Chrysler Group LLC, Ford
Motor Company, and General Motors.
Mr. Kunselman, please describe Chrysler's involvement, as a member
of USCAR, in the development of these specifications.
Answer. Chrysler, Ford and General Motors all contributed to the
creation of the USCAR-24 specification (Inflator Technical Requirements
and Validation), which was released in June of 2002. The three
companies also contributed to subsequent revisions published in June of
2004 and April of 2012.
Question 1a. Mr. Schostek and Mr. Kunselman, do you believe Takata
provided prompt and adequate documentation regarding testing completed
in accordance with USCAR-24 specifications, throughout the history of
your respective company's relationship with Takata? Please describe and
provide documentation showing the nature of your communications with
Takata and vice versa, on this topic.
Answer. To the best of my knowledge, Takata has provided prompt and
adequate documentation regarding testing completed in accordance with
USCAR-24 specifications throughout its relationship with Chrysler. All
parts, including each Takata inflator used in a Chrysler vehicle, are
documented by the supplier to be production ready. Proof of production
ready status is submitted to Chrysler prior to the launch of a new
vehicle or prior to the introduction of a substantial modification to
an existing production part. Like other manufacturers, Chrysler refers
to this practice as the Production Part Approval Process (``PPAP''). It
is my understanding that all testing completed under USCAR-24 by Takata
was included in its PPAP submission to Chrysler.
Question 2. National news outlets have reported that numerous cases
involving the defect were settled out of court, and that the details of
these settlements were sealed.
Mr. Kunselman and Mr. Schostek, did you report these cases to NHTSA
under your Transportation Recall Enhancement, Accountability and
Documentation (or TREAD) Act obligations?
Answer. Yes. Chrysler is aware of only one incident causing injury
involving a Chrysler vehicle. Chrysler reported this incident to NHTSA,
as required, in the fourth quarter of 2013.
Question 2a. Mr. Kunselman and Mr. Schostek, before settling these
cases, did you conduct any internal investigations and determine that
there was documentation that you did not want to be revealed in
discovery?
Answer. No.
Question 2b. Mr. Kunselman and Mr. Schostek, did the terms of the
settlements include any prohibition on conveying information to NHTSA
or other appropriate authorities? Do you agree that such a prohibition
would be contrary to Federal law?
Answer. My understanding is that a confidential settlement in no
way protects a manufacturer from its obligation to report under the
Safety Act. I further understand that a prohibition, as posed in your
question, would be contrary to Federal law. If a manufacturer uncovers
a safety defect in the course of a product liability suit, the
manufacturer is obligated under the Safety Act to report that defect to
NHTSA and undertake a recall.
______
Response to Written Questions Submitted by Hon. Richard Blumenthal to
David J. Friedman
Question 1. USCAR-24 on ``Inflator Technical Requirements and
Validation'' is a specification published by the United States Council
for Automotive Research. It outlines testing procedures for the
inflator module used in airbags and requires the inflator to undergo a
number of tests in a variety of extreme conditions, including high
humidity. USCAR represents a collaboration of Chrysler Group LLC, Ford
Motor Company, and General Motors.
Mr. Friedman, to what extent is NHTSA involved in the development
and acceptance of the USCAR specifications for inflators?
Answer. USCAR-24 is an industry sponsored, industry only effort to
establish its own criteria for manufacturing quality and processes when
developing and validating parts from the suppliers which support the
OEM vehicle manufacturers. There was no government involvement
including from NHTSA in developing the USCAR 24-2 specification.
Question 1a. Mr. Friedman, USCAR-24 specifications were last
updated in April 2013. Did this update reflect knowledge that NHTSA has
had since at least 2008, regarding inflator vulnerabilities in certain
environmental conditions such as high humidity?
Answer. USCAR-24 effort remained an industry only group and there
was no government involvement, including from NHTSA. The Takata air bag
recalls in 2008 were related to manufacturing problems. NHTSA did not
have knowledge of the inflator vulnerabilities related to long term
exposure to high absolute humidity until early to mid-2014.
Question 1b. Mr. Friedman, now that we know that Takata's
propellant can explode violently if exposed to any kind of moisture,
what is NHTSA doing to make sure the next revision of USCAR-24 will
subject inflators to more stringent requirements and testing?
Answer. This is an industry only group and NHTSA has no expectation
of being part of it. However, if NHTSA determines that air bag
propellant presents a safety concern that warrants further agency
action, the agency will determine whether regulation, additional
enforcement, guidelines or a combination of activities would be the
proper course of action to pursue.
[all]
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