[Senate Hearing 114-249]
[From the U.S. Government Publishing Office]
S. Hrg. 114-249
UPDATE ON THE RECALLS OF DEFECTIVE
TAKATA AIR BAGS AND NHTSA'S
VEHICLE SAFETY EFFORTS
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
JUNE 23, 2015
__________
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 FOURTEENTH CONGRESS
FIRST SESSION
JOHN THUNE, South Dakota, Chairman
ROGER F. WICKER, Mississippi BILL NELSON, Florida, Ranking
ROY BLUNT, Missouri MARIA CANTWELL, Washington
MARCO RUBIO, Florida CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire AMY KLOBUCHAR, Minnesota
TED CRUZ, Texas RICHARD BLUMENTHAL, Connecticut
DEB FISCHER, Nebraska BRIAN SCHATZ, Hawaii
JERRY MORAN, Kansas EDWARD MARKEY, Massachusetts
DAN SULLIVAN, Alaska CORY BOOKER, New Jersey
RON JOHNSON, Wisconsin TOM UDALL, New Mexico
DEAN HELLER, Nevada JOE MANCHIN III, West Virginia
CORY GARDNER, Colorado GARY PETERS, Michigan
STEVE DAINES, Montana
David Schwietert, Staff Director
Nick Rossi, Deputy Staff Director
Rebecca Seidel, General Counsel
Jason Van Beek, Deputy General Counsel
Kim Lipsky, Democratic Staff Director
Chris Day, Democratic Deputy Staff Director
Clint Odom, Democratic General Counsel and Policy Director
C O N T E N T S
----------
Page
Hearing held on June 23, 2015.................................... 1
Statement of Senator Thune....................................... 1
Statement of Senator Nelson...................................... 3
Report dated June 22, 2015 entitled ``Danger Behind the
Wheel: The Takata Airbag Crisis and How to Fix Our Broken
Auto Recall Process'' by Minority Staff Office of Oversight
and Investigations......................................... 4
Statement of Senator McCaskill................................... 64
Written statement of the American Car Rental Association and
Consumers for Auto Reliability and Safety.................. 65
Statement of Senator Klobuchar................................... 68
Statement of Senator Blumenthal.................................. 71
Statement of Senator Markey...................................... 73
Statement of Senator Peters...................................... 75
Statement of Senator Heller...................................... 77
Statement of Senator Daines...................................... 78
Witnesses
Hon. Mark R. Rosekind, Ph.D., Administrator, National Highway
Traffic Safety Administration, U.S. Department of
Transportation................................................. 43
Prepared statement........................................... 45
Hon. Calvin L. Scovel III, Inspector General, U.S. Department of
Transportation................................................. 48
Prepared statement........................................... 51
Kevin M. Kennedy, Executive Vice President of North America, TK
Holdings Inc. (``Takata'')..................................... 82
Prepared statement........................................... 83
Scott Kunselman, Senior Vice President and Head of Vehicle Safety
and Regulatory Compliance, FCA US LLC.......................... 88
Prepared statement........................................... 89
Rick Schostek, Executive Vice President, Honda North America..... 90
Prepared statement........................................... 92
Appendix
Response to written questions submitted to Hon. Mark R. Rosekind
by:
Hon. John Thune.............................................. 107
Hon. Bill Nelson............................................. 109
Response to written question submitted to Hon. Calvin L. Scovel
III by:
Hon. John Thune.............................................. 112
Response to written questions submitted to Kevin M. Kennedy by:
Hon. John Thune.............................................. 113
Hon. Bill Nelson............................................. 114
Hon. Richard Blumenthal...................................... 115
Response to written questions submitted to Scott Kunselman by:
Hon. John Thune.............................................. 116
Hon. Roy Blunt............................................... 117
Hon. Ron Johnson............................................. 118
Hon. Bill Nelson............................................. 118
Response to written questions submitted to Rick Schostek by:
Hon. John Thune.............................................. 119
Hon. Roy Blunt............................................... 121
Hon. Ron Johnson............................................. 121
Hon. Bill Nelson............................................. 121
UPDATE ON THE RECALLS OF DEFECTIVE.
TAKATA AIR BAGS AND NHTSA'S
VEHICLE SAFETY EFFORTS
----------
TUESDAY, JUNE 23, 2015
U.S. Senate,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Committee met, pursuant to notice, at 10:06 a.m., in
room SR-253, Russell Senate Office Building, Hon. John Thune,
Chairman of the Committee, presiding.
Present: Senators Thune [presiding], Blunt, Ayotte, Heller,
Fischer, Moran, Gardner, Daines, Nelson, McCaskill, Klobuchar,
Blumenthal, Markey, Booker, Manchin, and Peters.
OPENING STATEMENT OF HON. JOHN THUNE,
U.S. SENATOR FROM SOUTH DAKOTA
The Chairman. Good morning. Welcome, everyone. This hearing
will come to order.
We have called this hearing for a very somber reason. Some
defective airbags are hurting, rather than helping, people. We
still haven't figured out exactly why, and we need to figure
out how to prevent these issues from occurring in the future.
This is a pivotal time in vehicle safety. It is welcome
news that cars are generally safer than they have ever been.
Advances in vehicle technologies and safety innovations, as
well as robust safety initiatives, have reduced the number of
deaths on the road. Still, tragically, more than 30,000 people
die every year due to motor vehicle accidents.
Airbags are one of the most important vehicle safety
innovations, and that is why it is so alarming that tens of
millions of cars have potentially defective airbags. Today, we
will be asking witnesses for an update on recall and remedy
efforts for Takata airbag inflators, which have been allegedly
linked to 8 deaths and over 100 injuries.
The large number of vehicles recalled covers 11 auto
manufacturers. The complexity of the different types of
inflators, the lack of an identified root cause to date, and
the age of the vehicles affected have made remedying this
problem exceedingly difficult. But these challenges do not
excuse the responsibilities of auto manufacturers, suppliers,
and the National Highway Traffic Safety Administration, NHTSA,
from their shared obligation to ensure vehicles are safe.
The first priority should be fixing the recalled vehicles
as soon as possible. NHTSA has also taken an unprecedented
role, inserting itself in overseeing this process. Takata and
other alternative suppliers have ramped up production of
replacement parts to increase supply, and the autos are seeking
to contact affected vehicle owners and working with dealerships
on swift repairs.
Nevertheless, questions exist about whether the currently
available replacements are truly safe. Takata is phasing out
certain types of inflators, and testing is ongoing to determine
the root cause or causes of the inflator defects. This testing
will help to assess the scope of the recalls and safety of the
replacement parts.
These alarming recalls underscore the importance of clear
and accurate information for consumers. NHTSA's dedicated
Takata recall website is an important step, but recall fatigue
and confusion are growing. The large number of vehicles
involved has resulted in delays for some consumer notice, and
the number of times the same vehicle may be subject to recall
may further perplex consumers.
As we all know, completing a recall is not easy. With an
all-time record last year of nearly 64 million automobiles
subject to recall, I appreciate that NHTSA and the auto
industry are looking for ways to improve the process.
Identifying safety problems early is another key issue for
both the industry and NHTSA. I look forward to hearing more
about the Inspector General's audit report, which raises
serious questions about the agency's abilities in this area.
The audit identifies many instances in which the agency
repeatedly dropped the ball in handling issues related to
General Motors' ignition switch defect.
Weaknesses in NHTSA's ability to conduct accurate data
analysis and provide necessary training and supervision call
into question whether the agency can effectively identify and
investigate potential safety problems and carry out its safety
mission. These findings are especially disconcerting given the
scale and complexity of the Takata defects.
I am pleased to know that Administrator Rosekind has
concurred with all 17 of the Inspector General's
recommendations and has committed to implement them.
There have been far too many troubling recalls throughout
the agency's existence. That is why I have worked with Senator
Nelson to pass our Motor Vehicle Safety Whistleblower Act. This
legislation seeks to encourage employees to report safety
concerns before they become larger problems and to prevent loss
of life and serious injuries resulting from safety defects.
Despite a long vacancy with a Senate-confirmed leader,
under Administrator Rosekind's leadership, NHTSA has also been
looking for ways to improve. There have been assessments of
NHTSA and a plan for a path forward, but now is the time for
accountability. The agency, automakers, their suppliers and
dealers, and Congress must work together to reduce deaths and
injuries on our Nation's roadways.
This committee will continue to conduct oversight of the
Takata recalls and NHTSA's vehicle safety efforts. I appreciate
Takata's general cooperation with the Committee's requests to
date. In fact, we just received another large production of
documents from the company a few days ago. Some automakers are
also producing documents to the Committee. And I am sure we
will have more questions for NHTSA.
It is also important for consumers to check to see if their
vehicle is subject to this or any recall. NHTSA has a vehicle
identification number, or VIN, lookup tool online at
safercar.gov. If you determine your vehicle is subject to a
recall, please schedule an appointment to get it fixed with
your closest dealership as soon as possible.
Now I am pleased to welcome Administrator Rosekind to his
first appearance before the Committee since his confirmation as
the NHTSA Administrator last December.
I also want to welcome Inspector General Scovel back to the
Committee and our auto witnesses for this, our second full
committee hearing on this important issue.
So I want to thank all of our witnesses for being here
today. I look forward to your testimony.
And we will start with this first panel with Mr. Rosekind,
followed by Mr. Scovel.
Mr. Rosekind, please proceed.
Oh, I am sorry. Excuse me. I apologize. My mistake.
The Senator from Florida, our distinguished Ranking Member,
please make your opening statement before we proceed to the
panel.
STATEMENT OF HON. BILL NELSON,
U.S. SENATOR FROM FLORIDA
Senator Nelson. Thank you, Mr. Chairman.
And, if I may, we have had an investigation done, ``Danger
Behind the Wheel: The Takata Airbag Crisis and How to Fix Our
Broken Auto Recall Process,'' done by our minority committee
staff. If I may have that entered into----
The Chairman. Without objection.
Senator Nelson.--the record.
[The report follows:]
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Table of Contents
Executive Summary
I. Background
II. Timeline of the Takata Airbag Crisis
III. Media Reports and Takata's Internal Documents Raise Questions
Regarding the Company's Knowledge of Serious Safety and Quality Control
Issues as Early as 2001
IV. Media Reports and Takata's Internal Documents Illustrate Takata's
Efforts to Address the Impact of Moisture and Humidity on its Inflators
V. Proposed Policy Changes to Quickly Detect and Address Future Auto
Safety Defects
A. NHTSA Improvements
1. Increase Civil Penalty Authority
2. Provide Enhanced and Independent Testing Capability
3. Improve Recall Completion Rates
4. Enact Whistleblower Legislation
B. Safety Measures NHTSA, Takata, and Auto Manufacturers
Should Undertake to Improve Recall Effectiveness
1. Increase Ability to Effectively Respond to Safety
Defects/Recalls
2. Offer Loaner/Rental Cars When Recalls Involve
Serious Safety Issues
VI. Conclusion
Appendices and Exhibits
Appendix I: Chronology of Takata Airbag Events
Appendix II: List of Vehicles Affected by Takata Airbag Recalls
Exhibit A: March 22--April 5, 2011 E-mail Thread with Subject: ``GPS
audit''
Exhibit B: March 30, 2011 E-mail with Subject: ``Defects and defects
and defects!!!!''
Exhibit C: March 31, 2011 E-mail with Subject: ``Reworking station 100
parts to 120''
______
Executive Summary
Following reports of serious injury and death from airbags
manufactured by TK Holdings Inc. (Takata) in numerous makes and models
of vehicles--and claims of a delayed response from Takata, the
automakers, and regulators--the Senate Commerce Committee held a
hearing in November 2014 to determine the scope, potential cause, and
appropriate Congressional response to this serious safety issue. After
the hearing, then Commerce Committee Chairman Jay Rockefeller and
Senator Bill Nelson requested briefings and documents from Takata,
automakers, and the National Highway Traffic Safety Administration
(NHTSA). Among other things, the documents provided to the Committee by
Takata detailed the airbag inflator production process, the types of
propellant used in these inflators, inflator failure modes analyses,
and the alleged deaths and injuries caused by defective Takata airbags.
Earlier this year, Chairman John Thune and Ranking Member Nelson made
two additional requests for documents, mainly pertaining to airbag
inflator testing programs and internal Takata safety inspections. To
date, Committee minority staff has reviewed more than 13,000 documents
provided by Takata that total more than 90,000 pages.
As further detailed in this report, it appears that Takata was
aware, or should have been aware, of serious safety and quality control
lapses in its manufacturing plants as early as 2001. Documents reviewed
by Committee minority staff also indicate that Takata was informed of
three serious incidents involving faulty inflators in the first half of
2007. Nonetheless, the first recall was not issued until November
2008--more than a year later.
In addition, internal e-mails obtained by the Committee suggest
that Takata may have prioritized profit over safety by halting global
safety audits for financial reasons. The report also sheds light on
Takata's effort to address the impact of moisture and humidity on its
inflators, which has now been reported to play a role in causing
inflator ruptures. Further, it appears that NHTSA, by not opening an
investigation until June 11, 2014, failed to promptly investigate
Takata's defective airbags. NHTSA conducted an investigation related to
Takata airbag inflators in November 2009, but the investigation only
dealt with the scope and timeliness of two previous recalls, and it was
closed in May 2010.
After more than 100 injuries and eight deaths allegedly caused by
shrapnel from its rupturing airbags--over a period of more than 10
years--Takata cannot identify a root cause of these ruptures. Yet,
Takata is currently producing hundreds of thousands of replacement
inflators each month that may not completely eliminate the risk of
airbag rupture. Overall, the Committee minority staff's ongoing
investigation reveals a pattern of failures and missteps that did not
quickly or effectively respond to a serious safety defect.
The recall process must be strengthened to address future defects
that could cause serious injury or death. The Moving Ahead for Progress
in the 21st Century Act (MAP-21), which was enacted in July 2012, took
some important steps forward in this area by incentivizing employees to
voluntarily share important safety information and protecting them from
retaliation when they do so. Proposals that could strengthen NHTSA's
ability to prevent and respond to future safety recalls include
increasing the agency's civil penalty authority and expanding its
ability to conduct independent testing. Steps must also be taken to
improve recall completion rates and the automakers' ability to
appropriately respond when recalls are necessary.
I. Background
An airbag is a vehicle occupant restraint system that consists of a
fabric cushion or envelope that opens rapidly in the event of a
collision. When a crash is detected, a signal is sent to the inflator,
which is composed of a steel canister that houses a propellant,\1\ and
initiates a chemical reaction that causes the propellant to burn.\2\
The burning propellant emits a gas that rapidly inflates and deploys
the fabric cushion.\3\ In some cases, the propellant in airbags
manufactured by Takata burns too quickly.\4\ This can cause the
inflator to rupture, shooting metal fragments of the inflator canister
at the car's occupants.\5\
---------------------------------------------------------------------------
\1\ Takata Saw and Hid Risk in Airbags in 2004, Former Workers Say,
New York Times (Nov. 6, 2014).
\2\ National Highway Traffic Safety Administration, Air Bag
Deployment (online at www.safercar.gov/Vehicle%20Shoppers/Air%20Bags/
Air%20Bag%20Deployment).
\3\ Takata, All About Airbags (online at www.takata.com/en/around/
airbag01.html).
\4\ Car Industry Struggles to Solve Air Bag Explosions Despite Mass
Recalls, Reuters (June 22, 2014).
\5\ Id.
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Figure I: Airbag Inflator and Parts\6\
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\6\ Takata Saw and Hid Risk in Airbags in 2004, Former Workers Say,
supra n. 1.
In July 1984, NHTSA amended Federal Motor Vehicle Safety Standard
208 to phase in a requirement that cars offer automatic occupant
protection, such as airbags or automatic seatbelts.\7\ In 1991,
Congress passed the Intermodal Surface Transportation Efficiency Act,
which required cars built after September 1, 1997, to have airbags for
the driver and right front passenger.\8\
---------------------------------------------------------------------------
\7\ 49 Fed. Reg. 28962 (July 17, 1984).
\8\ Pub. L. No. 102-240 (1991).
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Since 1987, Takata has supplied automakers with airbags and has
become one of the three largest airbag manufacturers worldwide.\9\ In
1991, Takata began manufacturing airbag inflators in the U.S., and
media reports suggest that in 2001 the company started using ammonium
nitrate as the main ingredient in its propellant.\10\ Compared to its
predecessor, tetrazole, ammonium nitrate allowed Takata to create
smaller and cheaper airbag inflators that emit less toxic fumes, which,
in turn, could reduce the risk of chemical burns or breathing problems
when an airbag deploys.\11\ More than 14 years after the introduction
of ammonium nitrate, however, this compound remains at the center of a
safety crisis that has plagued Takata for more than a decade.
---------------------------------------------------------------------------
\9\ Takata, Airbags (online at www.takata.com/en/products/
airbag.html); Special Report: Deadly Airbags Backfire on Firm that
Crossed `Dangerous Bridge,' Reuters (Jan. 13, 2014). Autoliv and TRW
are the other top three airbag manufacturers. Airbag Inflator Shortage
Plagues Industry, Automotive News (Nov. 24, 2014).
\10\ Takata's Switch to Cheaper Airbag Propellant Is at Center of
Crisis, New York Times (Nov. 19, 2014).
\11\ Id.
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II. Timeline of the Takata Airbag Crisis
In 2003, the first known incident of a rupturing Takata airbag
inflator occurred in a BMW vehicle in Switzerland.\12\ Takata's
investigation of the incident determined that the inflator, which was
17 months old at the time of the incident, ruptured as a result of an
``overloading of propellant in the assembly of the inflator.'' \13\
Takata stated that this was an isolated event and unrelated to
subsequent incidents.\14\
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\12\ TK Holdings Inc., Defect Information Report, PSDI, PSDI-4, and
PSDI-4K Driver Air Bag Inflators (May 18, 2015), at 3.
\13\ Id.
\14\ Takata Investigated Defective Air Bag Inflator as Early as
2003, Reuters (Dec. 3, 2014).
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In 2004, the airbag in a 2002 Honda Accord ruptured in Alabama.\15\
Honda filed an early warning report with NHTSA, which was one of 245
reports filed that year about incidents that resulted in injury or
death.\16\ Takata tentatively concluded that a compromised seal on the
inflator or an overloading of propellant into the inflator might have
caused the rupture.\17\ Honda said it was assured by Takata in 2004
that this incident was an anomaly.\18\ According to two former Takata
employees interviewed by the New York Times, in the aftermath of this
incident, Takata secretly conducted tests on 50 airbag inflators that
were collected from vehicles sent to scrapyards.\19\ After two of these
inflators cracked during testing, engineers began designing possible
fixes in anticipation of a recall. The testing was suddenly shut down,
however, and Takata executives ordered technicians to delete the
testing data.\20\ In Takata's response to the Committee's request for
more information about this testing, Takata stated that it never tested
airbags recovered from scrapyards in 2004.\21\
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\15\ Takata Saw and Hid Risk in Airbags in 2004, Former Workers
Say, supra n. 1; TK Holdings Inc., Defect Information Report, PSDI,
PSDI-4, and PSDI-4K Driver Air Bag Inflators, supra n. 12, at 3.
\16\ Air Bag Flaw, Long Known to Honda and Takata, Led to Recalls,
New York Times (Sept. 11, 2014).
\17\ TK Holdings Inc., Defect Information Report, PSDI, PSDI-4, and
PSDI-4K Driver Air Bag Inflators, supra n. 12, at 3.
\18\ Takata Saw and Hid Risk in Airbags in 2004, Former Workers
Say, supra n. 1.
\19\ Id.
\20\ Id.
\21\ Takata Narrative Response to Senate Commerce Committee (Dec.
12, 2014) at 5.
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The next known incidents of rupturing inflators did not occur until
three years later.\22\ According to a 2010 letter from Takata to NHTSA,
in 2007, Honda reported three additional episodes to Takata that
occurred during the first half of 2007 \23\--all involved 2001 Honda
Civics.\24\ According to media reports, Honda settled with the victims
for undisclosed sums of money.\25\
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\22\ Air Bag Flaw, Long Known to Honda and Takata, Led to Recalls,
supra n. 16.
\23\ Letter from Kazuo Higuchi, Senior Vice President, Takata, to
George Person, Chief, Recall Management Division, Office of Defect
Investigation, National Highway Traffic Safety Administration, at 5
(Feb. 19, 2010) (online at www-odi.nhtsa.dot.gov/acms/cs/jaxrs/
download/doc/ACM13395661/INRL-RQ09004-39140P.pdf).
\24\ Takata Response to Senate Commerce Committee, Exhibit A (Dec.
12, 2014); Takata Response to Senate Commerce Committee, Exhibit B
(Mar. 27, 2015).
\25\ Air Bag Flaw, Long Known to Honda and Takata, Led to Recalls,
supra n. 16.
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Takata determined that all three rupture incidents involved
inflators that were assembled between October 31 and November 15, 2000,
and all contained propellant tablets manufactured in the same
months.\26\ Focusing on the short time-frame in which these inflators
and propellant were produced, Takata theorized that two manufacturing
processes, which overlapped during this period, led to elevated
moisture levels in the propellant.\27\ It appears Takata believed these
elevated propellant moisture levels during the manufacturing process,
when combined with the thermal cycling in vehicles, ``could cause the
propellant density to decline over time, and such a decline in density
could lead to overly energetic combustion during deployment of the air
bag.'' \28\ This analysis was shared with Honda in September 2007, but
a recall was not issued until more than a year later.\29\
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\26\ Letter from Higuchi to Person, supra n. 23, at 5-6.
\27\ Id. at 6.
\28\ Id. at 6.
\29\ Id. at 6.
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To test this hypothesis, Takata conducted additional testing on
inflators recovered from salvage yards and inflators provided by Honda,
but the analysis was inconclusive.\30\ After the conclusion of Takata's
testing, the company learned of a fourth rupture incident.\31\ In
October 2008, Takata recommended that Honda recall all vehicles
equipped with propellant from the four suspect lots of inflators.\32\
The following month, in November 2008, Honda issued its first recall of
vehicles with Takata airbags, which covered driver-side airbags in
3,940 cars in the U.S.\33\
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\30\ Id. at 6-7 (TKH-SCS&T00002077-2078).
\31\ Id. at 7 (TKH-SCS&T00002078).
\32\ Id. at 7.
\33\ This recall covered certain 2001 Honda Civics and Accords.
Letter from William R. Willen, Managing Counsel, Product Regulatory
Office, American Honda Motor Co., to Daniel C. Smith, Associate
Administrator for Enforcement, National Highway Traffic Safety
Administration (Nov. 11, 2008) (online at www-odi.nhtsa.dot.gov/acms/
cs/jaxrs/download/doc/ACM10641506/RCDNN-08V593-1511.pdf).
---------------------------------------------------------------------------
Based on its testing of additional inflators, Takata shifted its
focus from the assembly of the inflator to the production of the
propellant.\34\ In 2009, Takata realized that its methodology for
calculating propellant density in 2000 and 2001 could have led to
invalid results.\35\ The density of the propellant in inflators
recovered from Honda's November recall that were produced on Takata's
Stokes press, a specific compression press used to form the propellant
into tablets, was found to be low, which could leave the propellant
``more susceptible to overly aggressive combustion.'' \36\ Takata also
learned of additional malfunctions of inflators produced outside the
range of the November 2008 recall.\37\
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\34\ Letter from Higuchi to Person, supra n. 23, at 8.
\35\ Id. at 8-9 (TKH-SCS&T00002079-2080).
\36\ National Highway Traffic Safety Administration, ODI Resume,
Recall Query, Close Resume, RQ09-004 (Nov. 2, 2009-May 6, 2010) (online
at www-odi.nhtsa.dot.gov/acms/cs/jaxrs/download/doc/ACM13978206/INCLA-
RQ09004-5021.pdf).
\37\ Letter from Higuchi to Person, supra n. 23, at 11 (TKH-
SCS&T00002082).
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Takata presented this information to Honda in June 2009 and
recommended expanding the recall to include all vehicles containing
propellant manufactured on the Stokes press through February 2001.\38\
The following month, Honda announced its decision to recall
approximately 440,000 vehicles in the U.S. due to a potential defect in
driver-side airbags.\39\ Takata explained to NHTSA that it did not
provide any inflators that were the same or substantially similar to
those covered by the two recalls to any auto manufacturer other than
Honda.\40\ Among the nine alleged incidents of rupturing inflators that
occurred in 2009, all involving Honda vehicles, were two incidents in
which the shrapnel from the airbag inflator appears to have killed the
driver of the car.\41\
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\38\ Id. at 11-12.
\39\ This recall involved certain 2001 Honda Civics and Accords,
certain 2002 Honda Accords, and certain 2002 Acura 3.2TLs. Letter from
William R. Willen, Managing Counsel, Product Regulatory Office,
American Honda Motor Co., to Daniel C. Smith, Associate Administrator
for Enforcement, National Highway Traffic Safety Administration (July
29, 2009) (online at www.autosafety.org/sites/default/files/
09V259%20Part%20573.pdf).
\40\ Letter from Higuchi to Person, supra n. 23, at 2.
\41\ Takata Response to Senate Commerce Committee, Exhibit A (Dec.
12, 2014); Takata Response to Senate Commerce Committee, Exhibit B
(Mar. 27, 2015).
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In November 2009, NHTSA opened an investigation related to Takata's
rupturing airbags.\42\ The agency explained that it needed ``additional
information from Honda and Takata to more fully evaluate the scope and
timeliness'' of the previous recalls.\43\
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\42\ National Highway Traffic Safety Administration, ODI Resume,
Recall Query, Opening Resume, RQ09-004 (Nov. 2, 2009).
\43\ Id.
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The second Honda recall covered approximately 10,000 vehicles
outside the range that Takata had identified as containing the
potentially defective inflators--primarily inflators with propellant
produced after February 28, 2001--to allow Takata to assess whether the
second recall addressed all potentially dangerous inflators.\44\
Testing of these inflators determined that the density of some of the
propellant that was manufactured outside the period covered by the
existing recalls was also low.\45\ In February 2010, Honda issued
another recall, which expanded its second recall to include all
vehicles with driver-side inflators containing propellant manufactured
on the Stokes press.\46\ In May 2010, NHTSA closed its investigation
into rupturing Takata airbags after determining that Honda did not fail
to make timely defect decisions and that the scope of the previous
recalls was appropriate.\47\
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\44\ Letter from Higuchi to Person, supra n. 23, at 12.
\45\ Letter from Higuchi to Person, supra n. 23, at 12 (TKH-
SCS&T00002083).
\46\ Letter from Higuchi to Person, supra n. 23, at 13.
\47\ NHTSA, Close Resume, RQ09-004, supra n. 36.
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In April 2011, Honda expanded its three previous recalls because it
was unable to account for approximately 2,400 replacement inflators
that may have been installed in vehicles covered by previous
recalls.\48\ To capture the entire population of vehicles in which
these replacements could have been installed, Honda recalled 833,277
vehicles.\49\ In December 2011, this recall was expanded to include an
additional 272,779 vehicles.\50\ Between 2011 and 2012, 16 additional
alleged incidents occurred, although Takata may not have been aware of
some of the incidents until years later.\51\
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\48\ Letter from Jay Joseph, Senior Manager, Product Regulatory
Office, American Honda Motor Co., Inc., to Claude Harris, Acting
Administrator for Enforcement, National Highway Traffic Safety
Administration (Apr. 27, 2011) (online at www.autosafety.org/sites/
default/files/imce_staff_uploads/Honda%20Airbag%2011V-260.pdf).
\49\ Id.
\50\ Letter from Jay Joseph, Senior Manager, Product Regulatory
Office, American Honda Motor Co., Inc., to Nancy Lewis, Acting
Administrator for Enforcement, National Highway Traffic Safety
Administration (Dec. 1, 2011) (online at www-odi.nhtsa.dot.gov/acms/cs/
jaxrs/download/doc/ACM19786131/RCDNN-11V260-5849.pdf).
\51\ Takata Response to Senate Commerce Committee, Exhibit A (Dec.
12, 2014); Takata Response to Senate Commerce Committee, Exhibit B
(Mar. 27, 2015).
---------------------------------------------------------------------------
Between February and March 2013, Takata learned of two
manufacturing problems affecting the propellant tablets within certain
passenger-side airbag inflators.\52\ Takata explained that one
manufacturing issue occurred at its Moses Lake, Washington plant
between April 13, 2000, and September 11, 2002, where some propellant
tablets may not have been adequately compressed because the auto-reject
function on the machine that pressed the propellant into tablets had
been turned off by the machine operator.\53\ The other issue occurred
at Takata's Monclova, Mexico plant between October 4, 2001, and October
31, 2002, where some propellant tablets may have been exposed to
moisture.\54\ Due to these manufacturing problems, Takata found that
the propellant could potentially deteriorate, leading to over-
aggressive combustion, which could cause the inflator to rupture.\55\
At the time, Takata was aware of six ruptures--four in the U.S. and two
in Japan.\56\ Takata informed NHTSA in April 2013 that, based on these
two manufacturing problems, a defect may exist in certain passenger-
side airbag inflators in certain Honda, Toyota, Nissan, Mazda, GM, and
BMW vehicles.\57\ In light of Takata's defect report, most of these
automakers issued recalls, but NHTSA did not reopen its investigation
into rupturing Takata airbags.\58\ In 2013, 18 additional alleged
incidents occurred.\59\
---------------------------------------------------------------------------
\52\ Letter from Kazuo Higuchi, Senior Vice President, TK Holdings,
Inc., to Nancy Lewis, Associate Administrator of Enforcement, National
Highway Traffic Safety Administration (Apr. 11, 2013) (online at www-
odi.nhtsa.dot.gov/acms/cs/jaxrs/download/doc/UCM436445/RCDNN-13E017-
5589.pdf).
\53\ Id. An ``auto-reject'' function can ``detect and reject
propellant wafers with inadequate compression by monitoring the
compression load that had been applied.'' Id.
\54\ Id.
\55\ Id.
\56\ Id.
\57\ Id.
\58\ Honda, Toyota, Nissan, Mazda, and BMW issued recalls. See
Timeline--Takata Air Bag Recalls, Reuters (Nov. 25, 2014).
\59\ Takata Response to Senate Commerce Committee, Exhibit A (Dec.
12, 2014); Takata Response to Senate Commerce Committee, Exhibit B
(Mar. 27, 2015).
---------------------------------------------------------------------------
By May 2014, Takata was aware of six rupture incidents that
occurred in vehicles in Florida and Puerto Rico that were not covered
by previous recalls.\60\ In June 2014, Takata notified automakers that
some of its traceability records were incomplete, meaning Takata
``could not identify with absolute certainty the propellant lots from
which the propellant wafers in a specific inflator were taken.'' \61\
As a result, it was possible that propellant wafers had been stored at
the Monclova plant for up to three months before being used in
inflators.\62\ Based on these conclusions, Takata recommended expanding
the recall of vehicles with certain passenger-side airbag inflators,
which led five automakers to expand their 2013 recalls and one
automaker to issue a new recall.\63\
---------------------------------------------------------------------------
\60\ Letter from Mike Rains, Government Affairs Specialist, TK
Holdings, Inc., to Frank Borris, Director, Office of Defects
Investigation, National Highway Traffic Safety Administration (June 11,
2014) (online at www-odi.nhtsa.dot.gov/acms/cs/jaxrs/download/doc/
UCM457251/INLE-PE14016-59600.pdf).
\61\ TK Holdings Inc., Defect Information Report, SPI Passenger Air
Bag Inflators (May 18, 2015) at 4.
\62\ Id.
\63\ Id. The automakers who expanded existing recalls include
Toyota, Honda, Nissan, Mazda, and BMW; Subaru issued a new recall.
---------------------------------------------------------------------------
Also in June 2014, officials from NHTSA's Office of Defects
Investigation (ODI) requested that Takata support field actions--
essentially regional recalls--of suspect inflators in vehicles
registered in humid areas.\64\ Even though, according to Takata, there
was no evidence identifying a particular safety defect in inflators not
recalled at the time, Takata agreed to support the requested regional
recalls of driver-side and passenger-side airbag inflators in vehicles
in Florida, Puerto Rico, Hawaii, and the Virgin Islands.\65\ Takata
identified that certain Honda, Toyota, Nissan, Mazda, Ford, Chrysler,
and BMW vehicles contained the inflators.\66\ Later that month, Takata
determined that certain Subaru and Mitsubishi vehicles also contained
the suspect inflators, increasing the number of automakers impacted by
the potential defect to nine.\67\
---------------------------------------------------------------------------
\64\ Letter from Rains to Borris, supra n. 60.
\65\ Id. Takata agreed to support regional recalls replacing
driver-side airbags manufactured between January 1, 2004, and June 30,
2007, and passenger-side airbags manufactured between June 2000 and
July 31, 2004.
\66\ Id.
\67\ Letter from Mike Rains, Government Affairs Specialist, TK
Holdings, Inc., to Frank Borris, Director, Office of Defects
Investigation, National Highway Traffic Safety Administration (June 25,
2014) (online at www-odi.nhtsa.dot.gov/acms/cs/jaxrs/download/doc/
UCM457659/INLE-PE14016-59647.pdf).
---------------------------------------------------------------------------
On June 11, 2014, after receiving complaints of three Takata airbag
ruptures \68\--and then learning from Takata of three additional
ruptures \69\--NHTSA's ODI opened an investigation ``in order to
collect all known facts from the supplier and the vehicle manufacturers
that it believes may have manufactured vehicles equipped with inflators
produced during the same period as those that have demonstrated rupture
events.'' \70\ Because all six incidents occurred in the high absolute
humidity climates of Florida and Puerto Rico, Takata theorized that
humidity, in conjunction with potential manufacturing issues, might
influence the stability of the propellant as it ages and thus
contribute to the possibility of a rupture.\71\
---------------------------------------------------------------------------
\68\ The three ruptures include a driver-side airbag rupture in a
2005 Honda Civic (report received Aug. 2013), a passenger-side airbag
rupture in a 2003 Toyota Corolla (report received Mar. 2014), and a
driver-side airbag rupture in a 2005 Mazda 6 (report received Apr.
2014). National Highway Traffic Safety Administration, ODI Resume
Investigation: PE 14-016 (June 11, 2014) (online at www-
odi.nhtsa.dot.gov/acms/cs/jaxrs/download/doc/UCM456824/INOA-PE14016-
9724.PDF).
\69\ Id. The three rupture incidents occurred in the following: a
passenger-side airbag in a 2004 Nissan Sentra; a driver-side airbag in
a 2006 Dodge Charger; and a passenger-side airbag in a 2002 Toyota
Corolla.
\70\ Id.
\71\ Letter from Rains to Borris, supra n. 60.
---------------------------------------------------------------------------
On October 22, 2014, NHTSA released a consumer advisory urging
owners of certain vehicle models made by the now ten affected
automakers to respond to recall notices, some sent out 18 months prior,
and act immediately to replace defective Takata airbags.\72\ The
advisory noted that, from 2013 to 2014, approximately 7.8 million
vehicles were recalled as a result of faulty Takata airbags.\73\ David
Friedman, NHTSA Deputy Administrator, stated, ``Responding to these
recalls, whether old or new, is essential to personal safety and it
will help aid our ongoing investigation into Takata airbags and what
appears to be a problem related to extended exposure to consistently
high humidity and temperatures.'' \74\
---------------------------------------------------------------------------
\72\ NHTSA originally issued an alert on October 20, 2014, but this
alert included erroneous entries of vehicle models. NHTSA released an
updated consumer advisory on October 22, 2014. National Highway Traffic
Safety Administration, Consumer Advisory: Vehicle Owners with Defective
Airbags Urged to Take Immediate Action (Oct. 22, 2014) (online at
www.nhtsa.gov/About+NHTSA/Press+Releases/Vehicle-owners-with-defective-
airbags-urged-to-take-immediate-action). See also NHTSA Releases
Updated Takata Airbag Recalled Cars List, But It Still Has Errors,
AutoBlog (Oct. 22, 2014).
\73\ Consumer Advisory: Vehicle Owners with Defective Airbags Urged
to Take Immediate Action, supra n. 72. Auto manufactures covered under
the recalls include Toyota, Honda, Mazda, BMW, Nissan, Mitsubishi,
Subaru, Chrysler, Ford and General Motors.
\74\ Id.
---------------------------------------------------------------------------
On October 29, 2014, Deputy Administrator Friedman sent letters to
the ten affected automakers urging them to ``take aggressive and
proactive action to expedite [their] remedy of the recalled vehicles
and to supplement Takata's testing with [their] own.'' \75\ He also
asked for information on the steps the automakers were taking to
expedite production of replacements, including by obtaining additional
airbag 1suppliers, urging and incentivizing dealers to repair vehicles,
and encouraging consumers to bring in vehicles for repair.\76\
---------------------------------------------------------------------------
\75\ See e.g., Letter from David J. Friedman, Deputy Administrator,
National Highway Traffic Safety Administration to Jay Joseph, Assistant
Vice President, American Honda Motor Co. (Oct. 29, 2014) (online at
www-odi.nhtsa.dot.gov/acms/cs/jaxrs/download/doc/UCM465685/INIM-
PE14016-14351.pdf).
\76\ Id.
---------------------------------------------------------------------------
The next day, NHTSA issued a Special Order to Takata demanding
information on the defective airbags.\77\ The Special Order listed 36
requests, which covered documents that refer to manufacturing
conditions and process changes, communications between Takata and its
rivals as well as its customers, and a list of known deaths and
injuries. The Special Order also requested documents cited in an
October 17, 2014, Reuters article, including a March 2011 e-mail from
Takata supervisor Guillermo Apud with the subject ``Defectos y defectos
y defectos!!!!'' \78\
---------------------------------------------------------------------------
\77\ National Highway Traffic Safety Administration, Special Order
Directed to TK Holdings, Inc. (Oct. 30, 2014) (online at www-
odi.nhtsa.dot.gov/acms/cs/jaxrs/download/doc/UCM465855/INLM-PE14016-
60576.pdf). A Special Order is issued pursuant to 49 U.S.C.
Sec. 30166(g). It is equivalent to a subpoena and requires that the
response be signed under oath by a responsible officer of the company.
\78\ Id. See also U.S. Regulator to Takata: Give Us Faulty Air-Bag
Documents, Reuters (Oct. 30, 2014).
---------------------------------------------------------------------------
On November 18, 2014, NHTSA called for a national recall of certain
driver-side airbags after learning of a rupture incident in a vehicle
outside the existing regional recalls.\79\ NHTSA also issued a General
Order to Takata and the ten affected automakers demanding a detailed
report and production of documents related to the testing of Takata
inflators outside the regional recall areas.\80\ NHTSA also issued a
second Special Order to Takata, which compelled the company to provide
documents and information related to the propellant within its
inflators.\81\ NHTSA's press release acknowledged Takata's public
concession that it had changed the chemical mix of its propellant in
newly-designed inflators.\82\ Honda agreed to expand its recalls and
replace defective inflators nationwide.\83\
---------------------------------------------------------------------------
\79\ National Highway Traffic Safety Administration, USDOT Calls
for National Recall of Defective Takata Driver Side Air Bags (Nov. 18,
2014) (online at www.nhtsa.gov/About+NHTSA/Press+Releases/DOT-calls-
for-national-recall-of-takata-driver-air-bags).
\80\ National Highway Traffic Safety Administration, General Order
Directed to Manufacturers, PE14-016 Air Bag Inflator Rupture (Nov. 18,
2014).
\81\ National Highway Traffic Safety Administration, Second Special
Order Directed to TK Holdings, Inc., PE14-016 (Nov. 18, 2014).
\82\ USDOT Calls for National Recall of Defective Takata Driver
Side Air Bags, supra n. 79.
\83\ Honda to Replace Airbags Throughout U.S., New York Times (Nov.
18, 2014).
---------------------------------------------------------------------------
On November 21, 2014, the Senate Commerce Committee held a hearing
to examine the Takata airbag defects and the recall process.\84\
Hiroshi Shimizu, Senior Vice President of Global Quality Assurance,
testified on behalf of Takata and apologized for the injuries and
deaths caused by rupturing Takata airbags. At the hearing, Mr. Shimizu
was unable to provide answers to important questions, including
questions regarding the chemical compounds used in Takata's airbags and
the current production and safety testing of replacement airbags.\85\
Because Mr. Shimizu's testimony left so many questions unanswered, then
Chairman Rockefeller and Senator Nelson sent a letter to Takata
requesting documents and information regarding the company's defective
airbags.\86\
---------------------------------------------------------------------------
\84\ Senate Committee on Commerce, Science, and Transportation,
Examining Takata Airbag Defects and the Vehicle Recall Process, 113th
Cong. (2014).
\85\ Id. See also Frustrated Senators Blast Takata, Signal More
Safety Legislation, Automotive News (Nov. 23, 2014).
\86\ Letter from Chairman John D. Rockefeller, IV and Senator Bill
Nelson to Shigehisa Takada, Chairman and Chief Executive Officer,
Takata Corporation (Nov. 24, 2014).
---------------------------------------------------------------------------
On November 26, 2014, NHTSA sent Takata a Recall Request Letter
formally demanding that Takata acknowledge the existence of a defect
and issue a national recall for certain driver-side airbag
inflators.\87\ Based on reports of ruptures outside the geographic
areas covered under the regional recalls, NHTSA believed that an
``unreasonable risk posed by subject driver's side airbag inflators may
exist outside of the areas with high absolute humidity and therefore
would not be mitigated by the current regional recall.'' \88\ On
December 2, 2014, Takata responded to NHTSA's Recall Request Letter
stating that it firmly believed that the data and currently available
information did not support a nationwide recall.\89\
---------------------------------------------------------------------------
\87\ Letter from Frank S. Borris II, Director, Office of Defects
Investigation, National Highway Traffic Safety Administration, to Kazuo
Higuchi, Senior Vice President, TK Holdings, Inc. (Nov. 26, 2014)
(online at www-odi.nhtsa.dot.gov/acms/cs/jaxrs/download/doc/UCM467335/
INRM-PE14016-60978.pdf).
\88\ Id. at 3.
\89\ Letter from Mike Rains, Director of Product Safety, TK
Holdings Inc., to Frank Borris, Director, Office of Defects
Investigation, National Highway Traffic Safety Administration (Dec. 2,
2014) (online at www.autosafety.org/sites/default/files/
imce_staff_uploads/Takata's%20
Dec%20%202%20response%20to%20NHTSA's%20Nov%20%2026%20RRL.pdf).
---------------------------------------------------------------------------
By December 2014, more than 11 million vehicles in the U.S. had
been recalled, and five deaths were linked to the defective Takata
airbags.\90\ In addition to Honda, four auto manufacturers responded to
the pressure from NHTSA to expand their Takata airbag-related recalls
nationwide.\91\
---------------------------------------------------------------------------
\90\ Honda to Expand Airbag Recall Nationwide as Takata Resists,
New York Times (Dec. 3, 2014).
\91\ Honda, Mazda, BMW, Chrysler, and Ford expanded their recalls.
See Id.; Mazda Says U.S. Recalls Over Takata Air Bags to be Expanded
Nationwide, Reuters (Dec. 9, 2014); BMW Joins in Expansion of Takata
Airbag Recalls, New York Times (Dec. 22, 2014); Chrysler Recalls 2.9
Million U.S. Vehicles with Takata Airbags, Car and Driver (Dec. 19,
2014); Ford Recall of Takata Airbags to Extend Nationwide, New York
Times (Dec. 18, 2014).
---------------------------------------------------------------------------
Also in the same month, the automakers affected by the Takata
airbag recalls formed a consortium to conduct an independent
investigation into the root cause of the airbag ruptures. The
consortium's ten members include Honda, Toyota, Fiat-Chrysler, BMW,
Mazda, Ford, Subaru, Mitsubishi, General Motors, and Nissan.\92\ In
February 2015, the group of automakers appointed former NHTSA Acting
Administrator David Kelly as the project manager and coordinator and
selected aerospace and defense technology company Orbital ATK to lead
the review and testing of Takata inflators.\93\ The automakers hope
that this industry-wide testing initiative will supplement Takata's own
testing and provide answers to questions surrounding the defective
airbags.\94\
---------------------------------------------------------------------------
\92\ Automakers Choose Aerospace Firm to Run Takata Airbag Tests,
Automotive News (Feb. 26, 2015).
\93\ Automakers Select Orbital ATK to Lead Independent Review of
Takata Airbag Inflators, Reuters (Feb. 26, 2015).
\94\ Id.
---------------------------------------------------------------------------
In February 2015, NHTSA announced a $14,000 per day fine against
Takata for failing to fully respond to NHTSA's Special Orders regarding
Takata's defective airbags.\95\ According to NHTSA, Takata was not
``being forthcoming with the information that it is legally obligated
to supply'' as well as not being ``cooperative in aiding NHTSA's
ongoing investigation of a potentially serious safety defect.'' \96\
NHTSA also warned Takata that an incomplete response to the Special
Orders and civil penalties could be referred to the Department of
Justice, which could take action in Federal court to compel Takata to
fully respond.\97\ Takata responded by stating that the company had
provided the agency with almost 2.5 million pages of documents and that
it strongly disagreed with NHTSA's characterization of the company's
cooperation.\98\
---------------------------------------------------------------------------
\95\ Each Special Order is subject to a civil penalty of $7,000 per
day. Because, according to NHTSA, Takata was in violation of two
Orders, it was fined $14,000 per day. See 49 U.S.C. Sec. 30165(a)(3);
49 C.F.R. Sec. 578.6(a)(3). Letter from O. Kevin Vincent, Chief
Counsel, National Highway Traffic Safety Administration, to Steven G.
Bradbury, Counsel, Takata, Re: Failure to Fully Respond to Special
Orders in NHTSA's Investigation in PE14-016, Takata Airbag Inflator
Rupture (Feb. 20, 2015) (online at www.nhtsa.gov/staticfiles/
communications/pdf/Takata-civil-penalty-demand-02202015.pdf); see also
NHTSA to Fine Takata $14K a Day for Failing to `Fully Cooperate' in
Airbag Probe, Automotive News (Feb. 20, 2015).
\96\ Letter from Vincent to Bradbury, supra n. 95.
\97\ Id.
\98\ Takata Responds to U.S. DOT and NHTSA Statements, Business
Wire (Feb. 20, 2015).
---------------------------------------------------------------------------
On February 25, 2015, NHTSA issued a Preservation Order requiring
Takata to preserve inflators recovered from recalled vehicles.\99\
According to the Order, Takata is prohibited from destroying or
damaging recovered inflators except for testing purposes and is
required to implement a control plan for the ``inspection, testing, or
analysis of those inflators.'' \100\ Takata is also required to set
aside ten percent of the inflators for private plaintiffs and must
submit a protocol for third-party testing.\101\ NHTSA will have access
to all testing data from Takata, as well as all other independent
testing data, while also reserving the right to collect inflators for
its own testing.\102\ In conjunction with announcing the Order,
Secretary of Transportation Anthony Foxx revealed that NHTSA upgraded
its investigation to an Engineering Analysis, a formal step in the
defect investigation process which signals a belief in the existence of
a safety defect.\103\
---------------------------------------------------------------------------
\99\ National Highway Traffic Safety Administration, U.S.
Transportation Secretary Foxx Announces Order to Preserve Defective
Takata Air Bag Inflators for Ongoing Federal Investigation (Feb. 25,
2015) (online at www.nhtsa.gov/About+NHTSA/Press+Releases/2015/takata-
ordered-to-preserve-defective-air-bag-inflators).
\100\ National Highway Traffic Safety Administration, Preservation
Order and Testing Control Plan (Feb. 25, 2010) (online at www-
odi.nhtsa.dot.gov/acms/cs/jaxrs/download/doc/UCM477397/INOT-EA15001-
1908.pdf).
\101\ Id.
\102\ Id.
\103\ U.S. Orders Takata to Preserve Evidence in Air-Bag Probes,
Bloomberg (Feb. 25, 2015).
---------------------------------------------------------------------------
On April 23, 2015, NHTSA published the Protocol submitted by
Takata, as demanded by the Preservation Order, to ``establish a
framework under which the ten vehicle manufacturers[,] . . . private
parties to civil litigation, or a consortium of the [automakers] or
private parties may apply for and potentially receive Takata inflators
for testing provided they satisfy certain legal and safety
requirements.'' \104\ Under the Protocol, automakers or private
plaintiffs must submit an application that identifies the number of
requested inflators and, if the applicant desires a specific category
of inflators, also identifies the inflators by type, automaker, state
from which the inflators were obtained, and vehicle year and model.
Takata will then determine whether it has a sufficient supply of
inflators in the relevant classification to fulfill the request. If a
request will cause Takata's supply of inflators within a classification
to fall below a specified minimum,\105\ Takata will deny or modify the
request, unless the party making the request has written approval from
NHTSA to receive the inflators.\106\
---------------------------------------------------------------------------
\104\ Takata, Protocol Under NHTSA Preservation Order (Apr. 23,
2015) (online at www-odi.nhtsa.dot.gov/acms/cs/jaxrs/download/doc/
UCM477398/INOT-EA15001-1909.pdf).
\105\ Id. The Protocol explains that Takata will not provide
inflators for testing if fulfilling the request ``would reduce the
number of inflators that have been set aside in any classification
below 70 percent of the number of inflators then remaining in the
relevant set-aside at the time the request is fulfilled.''
\106\ Id.
---------------------------------------------------------------------------
On May 13, 2015, Toyota announced the recall of approximately
637,000 vehicles in the U.S., and Nissan announced the recall of
approximately 263,000 vehicles in the U.S.\107\ According to Toyota's
Defect Information Report (DIR) filed with NHTSA, Toyota tested
recovered recalled inflators and found that there was ``insufficient
air sealing at the initiator seal ring'' in some of the inflators.\108\
Because the inflators were not airtight, moisture could potentially
intrude over time.\109\
---------------------------------------------------------------------------
\107\ See Toyota, Part 573 Safety Recall Report 15V-286 (May 13,
2015) (online at www-odi.nhtsa.dot.gov/acms/cs/jaxrs/download/doc/
UCM478670/RCLRPT-15V286-6231.PDF); Toyota, Part 573 Safety Recall
Report 15V-285 (May 13, 2015) (online at www-odi.nhtsa.dot.gov/acms/cs/
jaxrs/download/doc/UCM478665/RCLRPT-15V285-2813.PDF); Toyota, Defect
Information Report 15V-284 (May 13, 2015) (online at www-
odi.nhtsa.dot.gov/acms/cs/jaxrs/download/doc/UCM478820/RCORRD-15V284-
0712.pdf); Nissan, Defect Information Report 15V-287 (May 14, 2015)
(online at www-odi.nhtsa.dot.gov/acms/cs/jaxrs/download/doc/UCM479142/
RCORRD-15V287-3274.pdf).
\108\ Toyota, Defect Information Report 15V-284, supra n. 107.
\109\ Toyota and Nissan Recall 6.5 Million More Vehicles Over
Takata Airbags, New York Times (May 14, 2015).
---------------------------------------------------------------------------
On May 18, 2015, Takata filed four DIRs with NHTSA and entered into
a Consent Order.\110\ The DIRs estimated that more than 17 million
driver-side inflators and more than 16 million passenger-side inflators
have been installed in vehicles in the U.S. as both original and remedy
parts.\111\ In the DIRs, Takata explained ``that a defect related to
motor vehicle safety may arise in some of the subject inflators.''
\112\ Takata's explanation of the defect in one type of passenger-side
airbag inflator states as follows:
---------------------------------------------------------------------------
\110\ National Highway Traffic Safety Administration, Consent
Order, EA15-001 Air Bag Inflator Rupture (May 18, 2015) (online at
www.safercar.gov/staticfiles/safercar/recalls/consent-order-takata-
05182015.pdf).
\111\ National Highway Traffic Safety Administration, Department of
Transportation Announces Steps to Address Takata Airbag Defects (May
19, 2015). The driver-side airbag inflator DIR notes that the defect
potentially affects 17.6 million inflators. TK Holdings Inc., Defect
Information Report PSDI, PSDI-4, and PSDI-4K, supra n. 12, at 2. The
DIRs for passenger-side airbag inflators note that 16.2 million
inflators may be affected by the defect. TK Holdings Inc., Defect
Information Report SPI, supra n. 61, at 2 (7.7 million); TK Holdings
Inc., Defect Information Report PSPI-L Passenger Air Bag Inflators (May
18, 2015) at 2 (5.2 million); TK Holdings Inc., Defect Information
Report PSPI Passenger Air Bag Inflators, at 1 (3.3 million).
\112\ TK Holdings Inc., Defect Information Report SPI, supra n. 61,
at 3. Takata's three other DIRs offer a similar explanation of the
defect. See also TK Holdings Inc., Defect Information Report PSDI,
PSDI-4, and PSDI-4K, supra n. 12, at 3; TK Holdings Inc., Defect
Information Report PSPI-L, supra n. 111, at 2; TK Holdings Inc., Defect
Information Report PSPI supra n. 111, at 2.
The propellant wafers in some of the subject inflators may
experience an alteration over time, which could potentially
lead to over-aggressive combustion in the event of an air bag
deployment. Depending on the circumstances, this potential
condition could create excessive internal pressure when the air
bag is deployed, which could result in the body of the inflator
rupturing upon deployment. Based upon Takata's investigation to
date, the potential for such ruptures may occur in some of the
subject inflators after several years of exposure to persistent
conditions of high absolute humidity. In addition, Takata's
test results and investigation indicate that this potential for
rupturing may also depend on other factors, including vehicle
design factors and manufacturing variability. . . . In the
event of an inflator rupture, metal fragments could pass
through the air bag cushion material, which may result in
injury or death to vehicle occupants.\113\
---------------------------------------------------------------------------
\113\ TK Holdings Inc., Defect Information Report SPI, supra n. 61,
at 3. See also TK Holdings Inc., Defect Information Report PSDI, PSDI-
4, and PSDI-4K, supra n. 12, at 3; TK Holdings Inc., Defect Information
Report PSPI-L, supra n. 111, at 2; TK Holdings Inc., Defect Information
Report PSPI, supra n. 111, at 2.
In addition, in certain passenger-side airbag inflators, Takata is
aware of an issue with the inflators' tape seals, which could allow
leaks that increase the potential for moisture to seep into the
inflators.\114\
---------------------------------------------------------------------------
\114\ TK Holdings Inc., Defect Information Report SPI, supra n. 61,
at 3.
---------------------------------------------------------------------------
The DIRs also reveal Takata's preliminary conclusions from testing
and investigation conducted by Takata and an independent research firm,
Fraunhofer ICT. Based on testing thus far, Takata has reached some
preliminary conclusions:
It appears that the inflator ruptures have a multi-factor root
cause that includes the slow-acting effects of a persistent and
long term exposure to climates with high temperatures and high
absolute humidity. Exposure over a period of several years to
persistent levels of high absolute humidity outside the
inflator, combined with the effects of thermal cycling, may
lead to moisture intrusion in some inflators by means of
diffusion or permeation. Fraunhofer ICT has identified the
possibility in these climates for moisture intrusion into the
inflator over time and a process by which the moisture may
slowly increase the porosity of the propellant within the
inflator. Fraunhofer ICT's analysis also indicates that the
design of the inflator and the grain (shape) of the propellant
can affect the likelihood that the porosity change will occur,
as can manufacturing variability. The results of the Fraunhofer
ICT research to date are consistent with the geographic
location and age of the inflators that have ruptured in the
field and in Takata's testing. Takata's testing also indicates
that the design of the vehicle and the design of the air bag
module are associated with differences in outcomes.\115\
---------------------------------------------------------------------------
\115\ TK Holdings Inc., Defect Information Report SPI, supra n. 61,
at 6. See also TK Holdings Inc., Defect Information Report PSDI, PSDI-
4, and PSDI-4K, supra n. 12, at 4-5; TK Holdings Inc., Defect
Information Report PSPI-L, supra n. 111, at 5; TK Holdings Inc., Defect
Information Report PSPI, supra n. 111, at 4-5.
Takata's DIRs describe prioritizing the replacement of defective
inflators in four phases, generally based upon the risk that exists as
a result of geographic location and age of the inflators.\116\ In
addition, pursuant to the Consent Order, Takata plans to continue its
testing of the defective inflators.\117\ Under the Consent Order,
NHTSA's investigation will remain open and may involve meeting with
Takata employees, conducting depositions of Takata employees,
requesting information, and reviewing all test results and data.\118\
The Order also explains that NHTSA will not be seeking civil penalties
beyond those that are applicable before May 18, 2015.\119\
---------------------------------------------------------------------------
\116\ See TK Holdings Inc., Defect Information Report PSDI, PSDI-4,
and PSDI-4K, supra n. 12, at 5; TK Holdings Inc., Defect Information
Report SPI, supra n. 61, at 7; TK Holdings Inc., Defect Information
Report PSPI-L, supra n. 111, at 5-6; TK Holdings Inc., Defect
Information Report PSPI, supra n. 111, at 5-6.
\117\ TK Holdings Inc., Defect Information Report PSPI-L, supra n.
111, at 5.
\118\ National Highway Traffic Safety Administration, Consent
Order, EA15-001 Air Bag Inflator Rupture (May 18, 2015) at 3-4.
\119\ Id. at 3.
---------------------------------------------------------------------------
On May 19, 2015, NHTSA announced the events of the previous day,
including the expansion of the number of vehicles to be recalled due to
defective Takata airbag inflators.\120\ According to NHTSA, the recalls
include nearly 34 million vehicles, potentially becoming the largest
recall of any consumer product in U.S. history.\121\ However, according
to news reports, the number of vehicles affected may be less than half
the approximately 34 million initially estimated by NHTSA.\122\
---------------------------------------------------------------------------
\120\ National Highway Traffic Safety Administration, Department of
Transportation Announces Steps to Address Takata Airbag Defects (May
19, 2015) (online at www.nhtsa.gov/About+NHTSA/Press+Releases/DOT-
action-on-takata-air-bag-defects).
\121\ Id. See also Flawed Takata Air Bags in 34 Million Vehicles
Lead to Biggest Recall in History, Washington Post (May 19, 2015).
\122\ Exclusive: Confusion Clouds Count of Cars Hit by Takata Air
Bag Recall, Reuters (June 10, 2015).
---------------------------------------------------------------------------
To prioritize and organize the various auto manufacturers' recalls,
on May 22, 2015, NHTSA filed a notice of intent to open a coordinated
remedy program for the replacement of defective Takata airbag
inflators.\123\ The goal of the notice is to consider whether--and, if
so, how--NHTSA will exercise its authority to organize and prioritize
the recall and remedy programs. Specifically, as part of this
proceeding, NHTSA requests comments on how to order sourcing of the
replacement inflators, whether NHTSA should order the manufacturers to
prioritize certain regions or vehicles, and whether NHTSA should order
re-replacements for replacement inflators if Takata cannot demonstrate
that its replacements are safe.\124\
---------------------------------------------------------------------------
\123\ National Highway Traffic Safety Administration, Notice of
Intent to Open a Coordinated Remedy Program Proceeding for the
Replacement of Certain Takata Air Bag Inflators, 80 Fed. Reg. 29791
(May 22, 2015) (Notice) (online at www.federalregister.gov/a/2015-
12449).
\124\ Id.
---------------------------------------------------------------------------
On June 1, 2015, Honda announced a recall of driver-side airbag
inflators in approximately 5.1 million vehicles, including 10 different
Honda and Acura models.\125\ The recall covered inflators that were
installed at the time of manufacture as well as replacement inflators
that had been installed as part of prior recalls of Takata
inflators.\126\
---------------------------------------------------------------------------
\125\ Honda, Part 573 Safety Recall Report 15V-320 (June 1, 2015)
(online at www-odi.nhtsa.dot.gov/acms/cs/jaxrs/download/doc/UCM479494/
RCLRPT-15V320-0154.PDF).
\126\ Id.
---------------------------------------------------------------------------
On June 5, 2015, NHTSA published a Notice of Coordinated Remedy
Program Proceeding for the Replacement of Certain Takata Air Bag
Inflators in the Federal Register.\127\ NHTSA explained that the agency
is ``considering issuing one or more administrative orders that would
coordinate remedy programs associated with defective Takata air bag
inflators.'' \128\ Coordination of the remedy programs could include
acceleration, prioritization, organization, and/or phasing of the
remedy programs.\129\
---------------------------------------------------------------------------
\127\ National Highway Traffic Safety Administration, Notice of
Coordinated Remedy Program Proceeding for the Replacement of Certain
Takata Air Bag Inflators, 80 Fed. Reg. 32197 (June 5, 2015) (online at
www.federalregister.gov/a/2015-13756).
\128\ Id.
\129\ Id.
---------------------------------------------------------------------------
According to Takata's responses to the Committee, as of the end of
January 2015, Takata's defective airbags had allegedly caused over 100
injuries and six deaths, with many of these alleged incidents occurring
in Florida, followed by Puerto Rico, Texas, and California.\130\ In
addition, on June 12, 2015, Honda confirmed a seventh death resulting
from a Takata airbag that ruptured in a 2005 Honda Civic on April 5,
2015, in Lafayette, Louisiana.\131\ Most recently, on June 19, 2015,
Honda confirmed an eighth death, which occurred in September 2014 as a
result of a rupturing airbag in a rented 2001 Honda Civic in Los
Angeles.\132\ In Takata's recent filings with NHTSA, the company
reported 84 known rupture incidents.\133\
---------------------------------------------------------------------------
\130\ Takata Response to Senate Commerce Committee, Exhibit A (Dec.
12, 2014); Takata Response to Senate Commerce Committee, Exhibit B
(Mar. 27, 2015).
\131\ Honda Confirms 7th Death from Takata Airbags, Automotive News
(June 12, 2015); Statement from American Honda Motor Co., Inc.,
Confirmed Fatality Related to the Rupture of a Takata Airbag Inflator
in Lafayette, Louisiana (June 12, 2015).
\132\ Honda Reports Eighth Death From Exploding Takata Air Bags,
Associated Press (June 19, 2015); Statement from American Honda Motor
Co., Inc., Re: Confirmed Fatality Related to the Rupture of a Takata
Airbag Inflator in Los Angeles, CA on September 7, 2014 (June 19,
2015).
\133\ TK Holdings Inc., Defect Information Report SPI, supra n. 61;
TK Holdings Inc., Defect Information Report PSDI, PSDI-4, and PSDI-4K,
supra n. 12; TK Holdings Inc., Defect Information Report PSPI-L, supra
n. 111; and TK Holdings Inc., Defect Information Report PSPI, supra n.
111.
---------------------------------------------------------------------------
Figure II: Piece of Metal Shrapnel From A Takata Airbag \134\
---------------------------------------------------------------------------
\134\ Law Office of Jason Turchin (online at
www.floridapersonalinjuryattorneysblog.com/2015/04/2003-honda-civic-
airbag-rupture-victim-retains-airbag-attorney-jason-turchin.html).
Piece of metal shrapnel recovered from the neck of a Florida
resident after the airbag ruptured in his 2003 Honda Civic on March 20,
2015.
Figure III: Airbag Cushion With Holes Caused By Shrapnel \135\
---------------------------------------------------------------------------
\135\ Images provided to the Committee minority staff by Jason
Turchin, Esq.
III. Media Reports and Takata's Internal Documents Raise Questions
Regarding the Company's Knowledge of Serious Safety and Quality
Control Issues as Early as 2001
Media reports and internal Takata documents reviewed by Committee
minority staff, including audit and engineering reports, internal
presentations, and e-mails, raise questions regarding Takata's
commitment to ensuring the highest standards of quality controls. A
Reuters investigation suggests that quality issues date back to 2001,
when engineers in Takata's Monclova, Mexico facility identified a range
of problems that included rust and faulty inflator welding, which they
said could have caused inflators to fail.\136\ In 2002, the plant
tracked 60 to 80 defects per one million inflators shipped by Takata,
which is six to eight times above the company's quality control limit,
according to an internal presentation.\137\
---------------------------------------------------------------------------
\136\ Takata Engineers Struggled to Maintain Air Bag Quality,
Documents Reveal, Reuters (Oct. 17, 2014).
\137\ Id.
---------------------------------------------------------------------------
A New York Times review of internal Takata documents, e-mails,
photos, videos, and regulatory filings uncovered instances of employees
raising concerns that transportation mishaps were resulting in the
delivery of wet or damaged airbag units to car manufacturers.\138\ One
manager wrote an e-mail to colleagues in which he complained that
quality checks that existed to ensure the inflators stayed dry, such as
hosing down trucks to check for leaks, were being ignored.\139\ ``The
whole situation makes me sick,'' he wrote.\140\ In addition, footage
from closed-circuit television showed forklifts dropping stacks of
airbag inflators, which at times were not properly examined to ensure
they were not damaged, according to former quality-control
managers.\141\ In 2005, a U.S. consulting firm found a pattern of bad
welding, and, according to engineering presentations, on at least three
occasions between 2005 and 2006, Takata engineers identified leaks in
inflators made in Monclova.\142\
---------------------------------------------------------------------------
\138\ Takata Saw and Hid Risk in Airbags in 2004, Former Workers
Say, supra n. 1.
\139\ Id.
\140\ Id.
\141\ Id.
\142\ Takata Engineers Struggled to Maintain Air Bag Quality,
Documents Reveal, supra n. 136.
---------------------------------------------------------------------------
According to a Reuters report based on interviews with 21 current
and former Takata employees and consultants, managers within Takata
raised concerns that workers were breaking quality rules to increase
the output of inflators.\143\ Employees also expressed concerns over
the pressures placed on them by managers.\144\ For example, Alejandro
Perez, a former Takata facility manager, told Reuters the pressure to
restart and make up for lost production after a March 2006 explosion at
the Monclova plant was unrelenting, particularly from managers based in
the U.S. who had been flown to Mexico.\145\
---------------------------------------------------------------------------
\143\ Special Report: Plant with Troubled Past at Center of Takata
Air Bag Probe, Reuters (Nov. 20, 2014).
\144\ Id.
\145\ Id.
---------------------------------------------------------------------------
Takata workers also explained that employees were encouraged to
meet certain quotas of inflators.\146\ ``If you didn't make it, you
would be behind and they wouldn't pay you a productivity bonus,''
according to Jose Sanchez, a former Takata employee who made inflators
from 2004 to 2010.\147\
---------------------------------------------------------------------------
\146\ Id.
\147\ Id.
---------------------------------------------------------------------------
Workers at Takata's Moses Lake plant, which also manufactured
inflators, told a similar story of managers who emphasized output
quotas, especially as demand for cars and SUVs grew.\148\ Two former
quality control managers at Takata's main distribution center in Texas
told the New York Times that a series of quality problems were
encountered as Takata tried to fulfill the increasing demand for its
airbags.\149\
---------------------------------------------------------------------------
\148\ Id.
\149\ Takata Saw and Hid Risk in Airbags in 2004, Former Workers
Say, supra n. 1.
---------------------------------------------------------------------------
Production facilities would resist taking back potentially damaged
or wet inflators as Takata struggled to meet this increased
demand.\150\ As automakers cut costs by implementing ``just-in-time''
production, meaning parts were only to arrive at assembly plants on an
as-needed basis, pressure was placed on Takata to meet tight delivery
schedules.\151\ Workers were told that if an automaker was forced to
delay production due to a late shipment, the parts supplier would be
fined tens of thousands of dollars for every minute of lost
production.\152\ ``That put a lot of pressure and incentive on us to
never miss a shipment,'' one of the former managers told the New York
Times.\153\ ``I'd argue, `what if my daughter bought the car with the
bad airbag?' But the plant would tell us, `Just ship it.' ''\154\
---------------------------------------------------------------------------
\150\ Id.
\151\ Id.
\152\ Id.
\153\ Id.
\154\ Id.
---------------------------------------------------------------------------
In April 2009, engineers reportedly scrambled to fix a flaw in a
machine in Monclova that pressed the propellant into tablets.\155\
According to a June 2009 internal presentation reviewed by the New York
Times, ``inflaters tested from multiple propellant lots showed
aggressive ballistics.'' \156\ In March 2011--after three Takata airbag
recalls had already been issued by one automaker \157\--Guillermo Apud,
a supervisor at the Monclova plant, sent an e-mail with the subject
``Defectos y defectos y defectos!!!!'' \158\
---------------------------------------------------------------------------
\155\ Id.
\156\ Id.
\157\ National Highway Traffic Safety Administration, Recall 08V-
593 (Nov. 14, 2008); National Highway Traffic Safety Administration,
Recall 09V-259 (July 8, 2009); National Highway Traffic Safety
Administration, Recall 10V-041 (Feb. 11, 2010).
\158\ Takata Engineers Struggled to Maintain Air Bag Quality,
Documents Reveal, supra n. 136.
---------------------------------------------------------------------------
In the full e-mail, which was reviewed by Committee minority staff,
Mr. Apud explained that an automaker had reported receiving an
improperly welded inflator and that 38 complete inflators had to be
thrown out that day due to incorrect assembly.\159\ He wrote, ``We
cannot be faced with findings/defects of this sort and NOT do
ANYTHING'' \160\ and ``A part that is not welded = one life less, which
shows we are not fulfilling the mission.'' \161\ A follow-up e-mail
from a Takata quality engineer \162\ reiterated Apud's concerns: ``We
are in a very critical situation because of the most recent problems
that we have detected on the line. Situations like this can give rise
to a Recall.'' \163\ According to Reuters, after this incident,
inspections at the plant were tightened.\164\
---------------------------------------------------------------------------
\159\ Takata Response to Senate Commerce Committee (Mar.13, 2015)
(TKH-SCS&T00045772_T0001).
\160\ Takata Response to Senate Commerce Committee (Mar. 13, 2015)
(TKH-SCS&T00045772_T0002).
\161\ Takata Engineers Struggled to Maintain Air Bag Quality,
Documents Reveal, supra n. 136.
\162\ Takata Response to Senate Commerce Committee (Feb. 3, 2015)
(TKH-SCS&T00011507).
\163\ Takata Response to Senate Commerce Committee (Mar. 23, 2015)
(TKH-SCS&T00060737_T0002).
\164\ Takata Engineers Struggled to Maintain Air Bag Quality,
Documents Reveal, supra n. 136.
---------------------------------------------------------------------------
Nonetheless, according to media reports, serious lapses in quality
control continued. In April 2011, Apud told fellow Takata supervisors
that chewing gum had been found in an inflator, which he described as
one of several ``grave problems'' in the Monclova plant's inflator
production.\165\ The following month, Apud reprimanded employees for
attempting to fix defective parts on the inflator assembly line--a
practice Takata had prohibited in order to reduce the likelihood of
faulty parts being shipped to automakers.\166\ He wrote, ``Rework on
the line is PROHIBITED!!!!'' \167\ ``We can't have leaders/materials
people/operators REWORKING material left and right without ANY control,
this is why we have defect upon defect,'' he continued.\168\ ``We need
to change NOW!'' \169\
---------------------------------------------------------------------------
\165\ Takata Engineers Struggled to Maintain Air Bag Quality,
Documents Reveal, supra n. 136.
\166\ Plant with Troubled Past at Center of Takata Air Bag Probe,
supra n. 143.
\167\ Id.
\168\ Id.
\169\ Id.
---------------------------------------------------------------------------
According to Reuters, in 2012, Takata workers in Monclova used the
wrong parts when assembling inflators, according to documents Takata
and automakers filed with NHTSA.\170\ More than 1350,000 vehicles from
three automakers were later recalled due to that defect.\171\ According
to the explanation Takata provided to regulators in Japan, the mistake
was possible because parts bins were kept too close together.\172\
---------------------------------------------------------------------------
\170\ Id.
\171\ Id.
\172\ Id.
---------------------------------------------------------------------------
E-mails reviewed by Committee minority staff also indicate that--
due to financial reasons--Takata's global safety audits were halted
from 2009 until 2011.\173\ In a March 2011 e-mail, a Takata senior vice
president in charge of inflators \174\ asked the global director of
inflator and propellant safety \175\ when he planned to audit inflator
operations at the Monclova and Moses Lake plants.\176\ When the safety
director replied that the plan was to audit North America in the fall,
the vice president said, ``Don't wait till Fall'' and advised him to
complete the audits soon, adding, ``Please help.'' \177\ The safety
director replied, ``I would like to perform a mini audit at Moses Lake
(Propellant and Assembly), Monclova (Assembly and Propellant Handling/
Storage not CAP), and Monterrey (Steering wheels)'' and proposed dates
in April and May 2011 to avoid conflicts with other scheduled
audits.\178\
---------------------------------------------------------------------------
\173\ Takata Response to Senate Commerce Committee (Mar. 23, 2015)
(TKH-SCS&T00060922).
\174\ Takata Response to Senate Commerce Committee (Mar. 13, 2015)
(TKH-SCS&T00050595).
\175\ Takata Response to Senate Commerce Committee (Mar. 13, 2015)
(TKH-SCS&T00050617).
\176\ Takata Response to Senate Commerce Committee (Mar. 23, 2015)
(TKH-SCS&T00060924).
\177\ Takata Response to Senate Commerce Committee (Mar. 23, 2015)
(TKH-SCS&T00060923).
\178\ Takata Response to Senate Commerce Committee (Mar. 23, 2015)
(TKH-SCS&T00060922-TKH-SCS&T00060923).
---------------------------------------------------------------------------
The Takata global safety director was then dispatched from the U.S.
to Monclova in May 2011.\179\ A couple weeks before his visit, an e-
mail was sent by the advanced product quality planning coordinator
\180\ instructing employees to close a series of items raised in prior
audits: ``All items in red must be closed this week without fail, as
the time period for the same has already expired.'' \181\ The day
before the safety director from the U.S. arrived, the facility
conducted its own audit, which detected several quality concerns,
including scales with disconnected cables, energetic material on the
floor, and dispensers for energetic material on unidentified
lines.\182\ These items were highlighted in an e-mail to Monclova
employees prior to the Takata global safety director's audit.\183\
---------------------------------------------------------------------------
\179\ Takata Response to Senate Commerce Committee (Mar. 23, 2015)
(TKH-SCS&T00060913); Plant with Troubled Past at Center of Takata Air
Bag Probe, supra n. 143.
\180\ Takata Response to Senate Commerce Committee (Feb. 3, 2015)
(TKH-SCS&T00021010).
\181\ Takata Response to Senate Commerce Committee (Mar. 23, 2015)
(TKH-SCS&T00060731_T0005).
\182\ Takata Response to Senate Commerce Committee (Mar. 23, 2015)
(TKH-SCS&T00060731_T0003).
\183\ Id.
---------------------------------------------------------------------------
Despite this preparation, an audit report dated May 16-18, 2011,
from the Takata safety director faulted the plant for not properly
closing bags of ammonium nitrate and for storing scrapped or
contaminated propellant near good material, allowing for the
possibility of a mix-up.\184\ The audit report also explained that
materials dating back to 2007 were found in the staging area, even
though this area was intended for 24-hour storage of materials and not
for long-term storage.\185\ In addition, the audit found several
instances of propellant on the assembly line floor.\186\
Notwithstanding these findings, the safety director noted that the
audit report would not be shared with Takata's headquarters in
Tokyo.\187\
---------------------------------------------------------------------------
\184\ Takata Response to Senate Commerce Committee (Mar. 13, 2015)
(TKH-SCS&T00045775); Plant with Troubled Past at Center of Takata Air
Bag Probe, supra n. 143.
\185\ Takata Response to Senate Commerce Committee (Mar. 13, 2015)
(TKH-SCS&T00045775).
\186\ Takata Response to Senate Commerce Committee (Mar. 13, 2015)
(TKH-SCS&T00045776).
\187\ Takata Response to Senate Commerce Committee (Mar. 23, 2015)
(TKH-SCS&T00060725); Plant with Troubled Past at Center of Takata Air
Bag Probe, supra n. 143.
---------------------------------------------------------------------------
The same U.S. safety director conducted a follow-up audit of the
Monclova plant in November 2011.\188\ E-mails exchanged among employees
of the plant in the lead-up to his visit discussed plant audit
questions that needed to be addressed before the auditor arrived,
including the question of whether a central safety committee
exists.\189\ A week before the director arrived, a superintendent of
environmental health and safety \190\ wrote that ``NO safety committee,
as such, has been formed.'' \191\ He continued, ``It can be made up by
the Inflators managers, and we can mention the weekly staff meeting as
evidence of meetings.'' \192\ The inflator assembly quality
manager\193\ replied, ``This is how we are going to answer and what we
are going to have as support for a safety audit? GPS [Global
Pyrotechnic Safety]? We need compelling responses and evidence so that
there is no doubt and they don't start asking for this and that . . .''
\194\ The follow-up audit report, dated November 10-11, 2011,
identified 14 tasks intended to improve concerns identified in the
audit. For example, the audit report noted that, in the assembly area,
various metal parts were found in an area open to the elements and that
improvement was needed to separate and protect the parts from
weather.\195\
---------------------------------------------------------------------------
\188\ Takata Response to Senate Commerce Committee (Mar. 23, 2015)
(TKH-SCS&T00060839).
\189\ Takata Response to Senate Commerce Committee (Mar. 23, 2015)
(TKH-SCS&T00064854_T0002).
\190\ Takata Response to Senate Commerce Committee (Mar. 23, 2015)
(TKH-SCS&T00065182_T0001).
\191\ Takata Response to Senate Commerce Committee (Mar. 23, 2015)
(TKH-SCS&T00064854_T0001).
\192\ Id.
\193\ Takata Response to Senate Commerce Committee (Mar. 13, 2015)
(TKH-SCS&T00052964).
\194\ Takata Response to Senate Commerce Committee (Mar. 23, 2015)
(TKH-SCS&T00064854_T0001).
\195\ Takata Response to Senate Commerce Committee (Mar. 23, 2015)
(TKH-SCS&T00060839).
---------------------------------------------------------------------------
Furthermore, a document from 2013 shows that Takata's Monclova
plant was not properly following the procedures that govern how changes
are made to some aspects of the manufacturing process.\196\ Changes in
the inflator assembly lines were implemented without receiving the
prior approval of directors of quality, engineering, and safety,
despite policies that required their approval.\197\ The document
outlined updates to internal safety policies that were intended to end
the practice.\198\ Had Takata implemented more robust safety programs,
including outside auditing and verification, it is possible that these
serious production issues might have been addressed much earlier.
---------------------------------------------------------------------------
\196\ Takata Response to Senate Commerce Committee (Feb. 3, 2015)
(TKH-SCS&T00044269).
\197\ Takata Response to Senate Commerce Committee (Feb. 3, 2015)
(TKH-SCS&T00044271-44273).
\198\ Takata Response to Senate Commerce Committee (Feb. 3, 2015)
(TKH-SCS&T00044269-44270).
---------------------------------------------------------------------------
IV. Media Reports and Takata's Internal Documents Illustrate Takata's
Efforts to Address the Impact of Moisture and Humidity on its
Inflators
Takata has attempted to understand the precise roles of moisture
and humidity in the stability of its ammonium nitrate-based propellant
for more than a decade--and questions still remain today. As reported
by the New York Times, Takata's patent applications demonstrate
Takata's general knowledge of moisture's effect on the stability of
ammonium nitrate. For example, in an October 2006 patent application,
Takata explained that moisture could seep into the propellant during
the manufacturing process as well as once the inflator was installed in
a car.\199\ Similar concerns were raised in another patent application
in December 2013, with Takata engineers cautioning that temperature
changes inside the airbag inflator might cause the propellant to ``lose
density especially in the presence of moisture or humidity.'' \200\
---------------------------------------------------------------------------
\199\ Airbag Compound has Vexed Takata for Years, New York Times
(Dec. 9, 2014).
\200\ Id.
---------------------------------------------------------------------------
Documents provided to the Committee by Takata show that the company
frequently made adjustments in order to control moisture in the
propellant during the manufacturing process. For example, Takata
changed the moisture specification, which is the amount of allowable
moisture present in the propellant,\201\ for one version of its
propellant tablets in 2010 and 2014. Based on an internal presentation
outlining process changes for this propellant from 2000 through 2014,
it appears that Takata did not change moisture specification from 2000
through 2009.\202\ In 2010, however, Takata changed the moisture
specification from a maximum of 0.20 percent to a maximum of 0.12
percent.\203\ In 2014, at Honda's request, Takata again changed the
moisture specification--this time from 0.12 percent to 0.07
percent.\204\
---------------------------------------------------------------------------
\201\ See Takata Response to Senate Commerce Committee (Feb. 3,
2015) (TKH-SCS&T00045446).
\202\ Takata Response to Senate Commerce Committee (Feb. 3, 2015)
(TKH-SCS&T00045419-45443).
\203\ Takata Response to Senate Commerce Committee (Feb. 3, 2015)
(TKH-SCS&T00045446).
\204\ Takata Response to Senate Commerce Committee (Feb. 3, 2015)
(TKH-SCS&T00045456).
---------------------------------------------------------------------------
Takata also made changes to control the humidity in the
manufacturing environment. For example, according to an internal Takata
presentation, the company changed the humidity specification at the
propellant loading station for the driver-side inflator on at least
three occasions between 2001 through 2010.\205\ Takata described that
the reason for one of the changes was ``to minimize the effects of
moisture absorption on propellant.'' \206\ In addition, in 2011, Takata
began controlling the humidity in the entire plant by installing high
capacity dehumidifiers, instead of controlling the humidity at each
propellant loading station.\207\ These process changes illustrate
Takata's efforts to regulate moisture and humidity during the
manufacturing process of its airbag inflators.
---------------------------------------------------------------------------
\205\ Takata Response to Senate Commerce Committee (Feb. 3, 2015)
(TKH-SCS&T00008072-TKH-SCS&T00008095). In 2001, Takata changed the
humidity specification from 30 percent to 42 percent. Takata Response
to Senate Commerce Committee (Feb. 3, 2015) (TKH-SCS&T00008072). In
2004, Takata changed the humidity specification from 42 percent to 35
percent. Takata Response to Senate Commerce Committee (Feb. 3, 2015)
(TKH-SCS&T00008082). In 2010, Takata changed the humidity specification
from 35 percent to 30 percent. Takata Response to Senate Commerce
Committee (Feb. 3, 2015) (TKH-SCS&T00008095).
\206\ Takata Response to Senate Commerce Committee (Feb. 3, 2015)
(TKH-SCS&T00008082).
\207\ Takata Response to Senate Commerce Committee (Feb. 3, 2015)
(TKH-SCS&T00008098).
---------------------------------------------------------------------------
Currently, Takata continues to attempt to understand the impact of
exposure to moisture over the life of the inflator. Analysis by
Fraunhofer ICT, a research institute with expertise in airbag and
pyrotechnic technology that was hired by Takata to test various aspects
of its inflators and propellants, suggests that long-term exposure to a
climate of persistent high heat and humidity is a significant factor in
explaining the airbag ruptures.\208\ Ongoing testing has identified an
O-ring seal as the possible point at which water is entering the
inflator.\209\
---------------------------------------------------------------------------
\208\ TK Holdings Inc., Defect Information Report PSDI, PSDI-4, and
PSDI-4K, supra n. 12.
\209\ Takata Air-Bag Problems Linked to Several Factors, Wall
Street Journal (June 2, 2015).
---------------------------------------------------------------------------
Significant questions still remain, however. For example, it is not
known why the same inflator can perform differently depending on the
make and model of the vehicle in which it was installed.\210\ In
addition, even when an inflator is subjected to all variables that,
according to the testing, appear to play a role in causing a rupture
event, some of these inflators nonetheless perform properly.\211\ These
unanswered questions are particularly troubling in light of the fact
that Takata continues to produce hundreds of thousands of replacement
inflators each month, with plans to increase production to one million
inflators per month by September 2015.\212\ Nonetheless, Takata and
NHTSA agree that, due to the critical role of time in degrading the
propellant, it is best to continue replacing the old, defective
inflators as quickly as possible--even though there is a distinct
possibility that some of these replacements will eventually also be
recalled.\213\
---------------------------------------------------------------------------
\210\ Takata Response to Senate Commerce Committee (Mar. 23, 2015)
(TKH-SCS&T00064623).
\211\ Takata Response to Senate Commerce Committee (Mar. 23, 2015)
(TKH-SCS&T00064697).
\212\ House Committee on Energy and Commerce, Testimony of Kevin
Kennedy, Executive Vice President of North America, TK Holdings Inc.,
Hearing on An Update on the Takata Airbag Ruptures and Recalls (June 2,
2015).
\213\ Briefing by NHTSA to Bipartisan Commerce Committee Staff
(June 17, 2015); Briefing by Takata to Bipartisan Commerce Committee
Staff (June 18, 2015).
---------------------------------------------------------------------------
V. Proposed Policy Changes to Quickly Detect and Address Future Auto
Safety Defects
Over the past 20 years, Congress has periodically scrutinized
NHTSA's vehicle safety authority in the wake of high-profile vehicle
defects that led to the needless deaths of American drivers. Twice
Congress has responded with legislative reform efforts with the Senate
Commerce Committee playing a leading role. In 2000, Congress passed the
Transportation Recall Enhancement, Accountability, and Documentation
(TREAD) Act in response to the Firestone tire recall that caused at
least 174 deaths and over 700 injuries.\214\ Subsequently, in 2012,
Congress again legislatively addressed NHTSA's regulatory authority
with provisions in the comprehensive surface transportation
reauthorization legislation--the Moving Ahead for Progress in the 21st
Century Act (MAP-21)--with many of those provisions stemming from the
lessons learned from sudden unintended acceleration defects in Toyota
vehicles.\215\
---------------------------------------------------------------------------
\214\ Pub. L. No. 106-414 (2000); Inside the Ford/Firestone Fight,
Time (May 29, 2001).
\215\ Pub. L. No. 112-141 (2012); National Highway Traffic Safety
Administration, RQ10003 Summary (Feb. 16, 2010-Mar. 1, 2011) (online at
www-odi.nhtsa.dot.gov/cars/problems/defect/
results.cfm?action_number=RQ10003&SearchType=QuickSearch&summary=true).
---------------------------------------------------------------------------
While these laws were significant and helpful, they stopped short
of reforms that would have provided NHTSA with sufficient resources and
authority to better detect and address dangerous vehicle safety
defects. The holes in the current NHTSA regulatory and enforcement
process, combined with the failure of certain manufacturers to maintain
robust internal safety and quality control programs, have manifested in
several large recalls--including those involving defective GM ignition
switches and Takata airbags.
To that end, this report recommends numerous policy proposals to
better enable NHTSA to protect the public from vehicle defects. Many of
these proposals have been part of previously introduced bills--some in
bills favorably reported by the Committee and some even in Senate-
passed legislation. In addition, some of these proposals have been
proffered by the Administration in its Fiscal Year (FY) 2015 budget,
which provides a comprehensive transportation proposal known as the
Generating Renewal, Opportunity, and Work with Accelerated Mobility,
Efficiency, and Rebuilding of Infrastructure and Communities throughout
America (GROW AMERICA) Act. Furthermore, NHTSA should adopt reforms on
its own in order to address deficiencies within ODI.
A. NHTSA Improvements
1. Increase Civil Penalty Authority
The Takata airbag recalls confirm the urgent need for stronger
enforcement mechanisms for NHTSA, including civil penalty authority
that can sufficiently deter safety violations. In 2014, NHTSA issued
over $126 million in civil penalties, which surpassed the total amount
collected by the agency in its 43-year history.\216\ Despite the record
year, NHTSA's civil penalty authority is currently capped at $35
million,\217\ severely limiting its ability to seek fines that are
commensurate with, for instance, the seriousness of failing to report
defects in a timely manner. The low cap has repeatedly demonstrated an
inability to deter automakers from committing grave safety violations.
This lack of deterrence is particularly apparent when companies fail to
report important defect information to NHTSA as required under Section
30118 of the National Traffic and Motor Vehicle Safety Act
(NTMVSA).\218\ For example, NHTSA's ``record'' $35 million fine of GM
represented a miniscule fraction of the company's annual revenue of
$156 billion.\219\ In contrast, it is worth noting--and it is telling--
that when Toyota agreed to pay a record fine of $1.2 billion for
concealing information on sudden unintended acceleration, the auto
giant did so in a settlement with the Department of Justice for
violations of the Wire Act--not for violations of Section 30118 of
NTMVSA.\220\
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\216\ See, e.g., NHTSA's fines of Honda ($70 million for failing to
both submit early warning reports and warranty claims); Hyundai Motor
America ($17.35 million for failing to issue a recall in a timely
manner); and General Motors Company ($35 million for failing to issue a
recall in a timely manner). National Highway Traffic Safety
Administration, NHTSA Issues More Fines in 2014 Than in Agency's Entire
History (Jan. 8, 2015) (online at www.nhtsa.gov/About+NHTSA/
Press+Releases/2015/DOT-fines-Honda-$70-million).
\217\ 49 U.S.C. Sec. 30165. The $35 million maximum limit was
increased from $15 million by MAP-21. See Pub. L. No. 112-141,
Sec. 31203 (2012).
\218\ 49 U.S.C. Sec. 30118 (2000).
\219\ See General Motors Company, 2014 Annual Report, at 22 (2014)
(online at www.gm.com/content/dam/gmcom/COMPANY/Investors/
Stockholder_Information/PDFs/2014_GM_Annual_Report.pdf).
\220\ See Department of Justice, Justice Department Announces
Criminal Charge Against Toyota Motor Corporation and Deferred
Prosecution Agreement with $1.2 Billion Financial Penalty (Mar. 19,
2014) (online at www.justice.gov/opa/pr/justice-department-announces-
criminal-charge
-against-toyota-motor-corporation-and-deferred).
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Over the past several years, lawmakers have proposed increasing or
eliminating this cap. A Senate bill introduced in the 111th Congress
would have increased the cap to $300 million,\221\ and legislation
reported out of the Commerce Committee in the 112th Congress would have
increased the cap to $250 million.\222\ The Senate-passed version of
MAP-21 adopted the Committee-reported increase of $250 million before
it was reduced to the current $35 million in Conference with the
House.\223\ In the 113th Congress, a bill introduced in the Senate
would have eliminated the cap,\224\ and a bill introduced in the House
would have increased the cap to $200 million.\225\ The GROW AMERICA Act
also would increase the limit on NHTSA's civil penalties to $300
million.\226\ Substantially increasing or eliminating NHTSA's civil
penalty cap is critical to making NHTSA a stronger and more effective
regulator.
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\221\ S. 3302, 111th Cong. (2010).
\222\ S. 1449, 112th Cong. (2011).
\223\ S. 1813, 112th Cong. (2012).
\224\ S. 2559, 113th Cong. (2014).
\225\ H.R. 4364, 113th Cong. (2014).
\226\ Department of Transportation, Generating Renewal,
Opportunity, and Work with Accelerated Mobility, Efficiency, and
Rebuilding of Infrastructure and Communities throughout America Act
Sec. 4110 (2014).
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2. Provide Enhanced and Independent Testing Capability
Improving NHTSA's ability to conduct enhanced and independent
testing would also greatly further motor vehicle safety. While Takata
and the automakers have the responsibility to identify the root cause
of the airbag ruptures, their regulator should have the ability to
conduct its own independent tests to verify their findings.
Furthermore, according to a new report issued by the Department of
Transportation Inspector General's office (DOTIG), NHTSA's ability to
aggressively and prophylactically identify and address defects before
they cause greater harm is hampered by deficiencies in how ODI
operates.\227\ Specifically, the DOTIG report found that ODI lacks (1)
protocols and procedures to collect data that is accurate and useful,
(2) the ability to statistically analyze data in order to discern
trends that indicate the existence of safety defects, and (3) protocols
that govern the conditions for conducting investigations. The report
made 17 recommendations that ODI should adopt to address these
deficiencies.\228\ Furthermore, NHTSA is plagued by a chronic lack of
resources. Currently, the agency is underfunded and outmanned--only 51
employees are responsible for analyzing an overwhelming amount of data
and conducting appropriate investigations therefrom.\229\ The
President's FY 2016 budget request proposes an overall NHTSA budget of
$908 million, a nine percent increase from the agency's current budget
of $830 million.\230\ This includes increasing ODI's budget to $31.3
million, up from $11 million in FY 2015, which would allow for the
hiring of an additional 57 personnel.\231\ Coupled with meaningful
internal reforms, the increased budget for ODI would enhance NHTSA's
``ability to monitor data, find defects sooner, and strengthen [its]
ability to conduct investigations of vehicles with suspected defects.''
\232\
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\227\ Department of Transportation, Office of Inspector General,
Inadequate Data and Analysis Undermine NHTSA's Efforts to Identify and
Investigate Vehicle Safety Concerns (June 18, 2015).
\228\ Id.
\229\ Auto Regulator Has 51 People Tracing 250 Million Cars,
Bloomberg (Mar. 26, 2015).
\230\ See Department of Transportation, Budget Estimates Fiscal
Year 2015, National Highway Traffic Safety Administration (2015)
(online at www.business.cch.com/plsd/FY2016-NHTSA-CBJ-Final.pdf).
\231\ Id. See also Department of Transportation, U.S.
Transportation Secretary Anthony Foxx Unveils President's Bold $94.7
Billion Investment in America's Infrastructure Future (Feb. 2, 2015)
(online at www.dot.gov/briefing-room/us-transportation-secretary-
anthony-foxx-unveils-president%E2%80%99s-bold-947-billion).
\232\ Id.; National Highway Traffic Safety Administration, U.S.
Transportation Secretary Foxx Calls on Congress to Authorize New
Enforcement Tools for NHTSA and Levis Fine on Takata (Feb. 20, 2015)
(online at www.nhtsa.gov/About+NHTSA/Press+Releases/2015/DOT-wants-new-
enforcement-tools-for-nhtsa-and-fines-takata).
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3. Improve Recall Completion Rates
Recall notifications are only effective when consumers act on the
notices by actually bringing their vehicles to an authorized dealership
to have them repaired. However, achieving high recall completion rates
has proven to be a challenge. Secretary of Transportation Anthony Foxx
has stated, ``Recalls are only successful and can only save lives if
they end up getting the cars fixed, but we know that 20 percent of
vehicles that are recalled--and possibly more than that--go
unrepaired.'' \233\ A 2011 Government Accountability Office study found
significant variation in recall completion rates: in any given year,
some manufacturers have completion rates as low as 23 percent, while
others have completion rates as high as 96 percent.\234\ By the end of
2014, of the 17 million vehicles that had been recalled for defective
Takata airbags, reports suggested that only around 2 million vehicles--
a mere 11 percent of those recalled--had been repaired.\235\ In April
2015, NHTSA hosted a workshop with industry, safety advocates, policy
makers, and researchers on improving recall completion rates. At the
workshop, NHTSA Administrator Mark Rosekind said, ``Getting to 100
percent is going to be a real challenge, but it has to be our ambition.
And until the day we hit that mark, we have to think of new ways to get
there.'' \236\
---------------------------------------------------------------------------
\233\ National Highway Traffic Safety Administration, U.S. DOT
Hosts Workshop to Boost Recall Completion Rates (Apr. 28, 2015) (online
at www.nhtsa.gov/About+NHTSA/Press+Releases/2015/nhtsa-retooling-
recalls-workshop-04282015).
\234\ Government Accountability Office, Auto Safety: NHTSA Has
Option to Improve the Safety Defect Recall Process, at 25 (June 2011).
\235\ The Unsolved Mystery of the Exploding Air Bags, USA Today
(Apr. 27, 2015).
\236\ DOT Aims to Follow Record Recall Fines with Record Repair
Rate, Politico Pro (Apr. 28, 2015).
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Lawmakers in recent years have attempted to bolster recall
effectiveness by introducing legislation that would prohibit used car
dealers and rental car companies from selling, leasing, or renting out
vehicles subject to an open recall.\237\ Under current law, no such
prohibition exists, constituting a major loophole in ensuring the
safety of cars on the Nation's roads and highways.\238\ The GROW
AMERICA Act also proposes closing this loophole.\239\ Secretary Foxx
stated, ``Every vehicle under an open safety recall should be repaired
as soon as possible.. . .Requiring rental car agencies and used car
dealers to fix defective vehicles before renting is a common-sense
solution that would make our roads safer.'' \240\ In September 2014,
the Senate Commerce Committee favorably reported S. 921, the Raechel
and Jacqueline Houck Safe Rental Car Act, which would have closed this
loophole for rental cars.\241\
---------------------------------------------------------------------------
\237\ See, e.g., S. 3302, 111th Cong. (2010); S. 2559, 113th Cong.
(2014); and S. 921, 113th Cong. (2012).
\238\ U.S. Transportation Secretary Foxx Calls on Congress to
Authorize New Enforcement Tools for NHTSA and Levis Fine on Takata,
supra n. 233.
\239\ Department of Transportation, Generating Renewal,
Opportunity, and Work with Accelerated Mobility, Efficiency, and
Rebuilding of Infrastructure and Communities throughout America Act
Sec. 4109 (2014). Previous proposals have also required that used car
dealers notify purchasers of any outstanding safety recalls. See S.
3302, 111th Cong. (2010) and S. 2559, 113th Cong. (2014).
\240\ U.S. Transportation Secretary Foxx Calls on Congress to
Authorize New Enforcement Tools for NHTSA and Levis Fine on Takata,
supra n. 233.
\241\ S. 921, 113th Cong. (2014). On June 19, 2015, Honda confirmed
that the 2001 Honda Civic involved in the eighth death caused by a
rupturing Takata airbag inflator was a rental car. Statement from
American Honda Motor Co., Inc., Re: Confirmed Fatality Related to the
Rupture of a Takata Airbag Inflator in Los Angeles, CA on September 7,
2014, supra n. 132.
---------------------------------------------------------------------------
Numerous other ideas have been proposed to improve recall
completion rates, including requiring consumers to fix open recalls
before they are able to register their vehicles or renew their
registrations.\242\ Another idea is for auto manufacturers to provide
direct in-vehicle notification to owners or lessees of open recalls.
---------------------------------------------------------------------------
\242\ See S. 617 (2015).
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4. Enact Whistleblower Legislation
As noted earlier, the Takata airbag recalls--as well as other high-
profile safety recalls--highlight the need for stronger incentives for
companies to report safety defects to NHTSA as soon as they become
aware of them. In addition to increasing civil penalties for violations
of Section 30118 of NTMVSA, bolstering incentives and protections for
whistleblowers would also increase the likelihood that NHTSA receives
critical safety information in a timely manner. Revealing information
on the various issues surrounding the Takata airbag defects has often
come from former Takata employees who have spoken to media sources in
the aftermath of the crisis--often on the condition of anonymity.\243\
NHTSA has also urged potential whistleblowers to contact the
Administration.\244\
---------------------------------------------------------------------------
\243\ See, e.g., Takata Saw and Hid Risk in Airbags in 2004, Former
Workers Say, supra n. 1; Exclusive: U.S. Federal Safety Regulators Seek
Takata Whistleblowers, Reuters (Jan. 29, 2015).
\244\ Exclusive: U.S. Federal Safety Regulators Seek Takata
Whistleblowers, supra n. 244.
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Currently, MAP-21 provides whistleblower protections for employees
of manufacturers, part suppliers, and dealerships by protecting them
from discrimination or retaliation for engaging in certain protected
activities, including providing information relating to any motor
vehicle defect, noncompliance, or any violation to the Secretary of
Transportation or an employer.\245\
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\245\ Pub. L. No. 112-141 Sec. 30171; 49 U.S.C. Sec. 30171.
---------------------------------------------------------------------------
In January 2015, Commerce Committee Chairman John Thune and Ranking
Member Bill Nelson introduced the Motor Vehicle Safety Whistleblower
Act (S. 304), which would enhance the protections in MAP-21 by
incentivizing employees and contractors to voluntarily provide
information to NHTSA.\246\ Under the bill, the Secretary of
Transportation is authorized to share with the whistleblower up to 30
percent of any fines exceeding $1 million that NHTSA recovers as a
result of the information that is reported. To help improve automobile
safety, S. 304 incentivizes whistleblowers to report violations and
provides the necessary protections for such actions. On April 28, 2015,
the Senate passed S. 304.
---------------------------------------------------------------------------
\246\ S. 304. The Bill is cosponsored by Senators Heller,
McCaskill, Klobuchar, Ayotte, Moran, and Blumenthal. On February 26,
2015 the Commerce Committee considered the bill and ordered to be
reported favorably, modified by a substitute amendment.
---------------------------------------------------------------------------
B. Safety Measures NHTSA, Takata, and Auto Manufacturers Should
Undertake to Improve Recall Effectiveness
Short of additional legislation, NHTSA and private stakeholders can
also do a better job of effectuating recalls. Specifically, NHTSA
should consider using its existing authority to accelerate the
availability of replacement parts to the public and should further
modify its public database to make it more user friendly. Lastly, auto
manufacturers should make loaner cars more readily available to
consumers affected by lengthy recalls.
1. Increase Ability to Effectively Respond to Safety Defects/Recalls
The defective Takata airbag crisis highlights the need for
improvements in the auto industry's ability to effectively respond to
recalls. As of June 2015, Takata explained that production of
replacement inflators had increased from approximately 350,000 to
700,000 per month.\247\ At this rate of production, it would take
Takata more than three years to produce replacement inflators for all
recalled vehicles. By September 2015, Takata plans to be manufacturing
one million inflators per month,\248\ but the slow pace at which Takata
initially produced replacements, which has led to reports of customers
being told that parts are not available,\249\ underscores the need for
better planning for recalls, especially large recalls.
---------------------------------------------------------------------------
\247\ Testimony of Kevin Kennedy, Hearing on An Update on the
Takata Airbag Ruptures and Recalls (June 2, 2015), supra n. 213.
\248\ Id.
\249\ See, e.g., Takata Air Bag Recall Stalls in Wisconsin Over
Lack of Parts, Journal Sentinel (Mar. 30, 2015).
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Section 30120 of NTMVSA grants NHTSA the authority to improve the
efficacy of recalls by expanding the sources of replacement parts and/
or the number of authorized repair facilities.\250\ Granted under the
TREAD Act, NHTSA can use this authority if it determines that the
``manufacturer's remedy program is not likely to be capable of
completion within a reasonable time.'' \251\ Thus far, NHTSA has opted
not to use its 30120 authority to accelerate the availability of
replacements for defective Takata airbags, but it should not hesitate
to do so if such an initiative would further public safety.
---------------------------------------------------------------------------
\250\ 49 U.S.C. Sec. 30120.
\251\ 49 C.F.R. 573.14(b).
---------------------------------------------------------------------------
Furthermore, the lack of accurate information available to
consumers raises serious concerns when it comes to industry and the
government's readiness. To promote transparency and accountability,
MAP-21 mandated that recall information be available on the Internet.
Consumers are now able to search by vehicle make and model or enter
their Vehicle Identification Number (VIN) into NHTSA's vehicle safety
database at www.safercar.gov to see if their vehicle is subject to a
recall.\252\ The Takata airbag recalls have demonstrated that this
search tool needs to be strengthened. NHTSA's VIN search tool wrongly
informed some consumers that their vehicles had either already been
repaired or were not subject to a recall.\253\ Moreover, in October
2014, the overwhelming demand for NHTSA's website caused it to
crash.\254\ Bills introduced in Congress to improve NHTSA's vehicle
safety database include measures aimed at: improving website
organization and functionality; allowing for data to be searched,
aggregated, and downloaded; and improving searchability of specific
vehicles and issues through standardization of commonly used search
terms.\255\ However, NHTSA is capable of taking these steps on its own
accord. Even without a legislative directive, the agency should take
the initiative to make its database more user friendly and effective
for consumers.
---------------------------------------------------------------------------
\252\ Pub. L. No. 112-141 Sec. 31301.
\253\ NHTSA Updates Recall Website After Cars.com Probe, Cars.com
(Apr. 23, 2015).
\254\ National Highway Traffic Safety Administration, U.S.
Department of Transportation Unveils New, Free, Online Search Tools for
Recalls Using Vehicle Identification Number (Aug. 20, 2014) (online at
www.nhtsa.gov/About+NHTSA/Press+Releases/2014/New-free-online-search-
tool-for-recalls-using-VIN-released); see also Demand Crashes Air Bag
Recall Web Site Safercar.gov, Washington Post (Oct. 21, 2014). In
addition, Honda's VIN search tool, which allows consumers to determine
whether a car is subject to recall, was providing false information in
the months after millions of vehicles were recalled. Owners whose cars
were subject to multiple recalls were only informed of the most recent
recalls, and earlier recalls were shown as completed. See Senate
Committee on Commerce, Science, and Transportation, Examining Takata
Airbag Defects and the Vehicle Recall Process, 113th Cong. (Nov. 20,
2014).
\255\ See S. 2559, 113th Cong. (2014); H.R. 1181.
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2. Offer Loaner/Rental Cars When Recalls Involve Serious Safety Issues
At the November 2014 Commerce Committee hearing regarding the
defective Takata airbags, Senator Nelson called on automakers to
provide loaner vehicles or rental cars to consumers who could not get
their vehicles immediately fixed due to the unavailability of
replacement parts.\256\ In March 2015, Honda launched a multimillion-
dollar ad campaign to urge owners of vehicles affected by the Takata
airbag recalls to get their vehicles fixed.\257\ The advertisements,
printed in English and Spanish, promised consumers a rental car or
loaner vehicle free-of-charge. To keep drivers and passengers safe when
vehicles are subject to a recall, automakers should provide rental or
loaner vehicles, especially in cases in which the defect in question
poses a serious safety hazard or in which replacement parts are
unavailable.
---------------------------------------------------------------------------
\256\ Senator Bill Nelson Statement, Senate Committee on Commerce,
Science, and Transportation, Examining Takata Airbag Defects and the
Vehicle Recall Process, 113th Cong. (Nov. 20, 2014).
\257\ New Honda Ads: Fix Your Airbags, AutoBlog (Mar. 14, 2015).
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VI. Conclusion
Thus far, the Committee minority staff's ongoing investigation
reveals a series of failures by both Takata and NHTSA to timely address
a defect that has now mushroomed into a recall crisis. Had Takata
maintained a more robust culture of safety, it is likely that many of
these defects could have been discovered much sooner. Similarly, had
NHTSA promptly undertaken more aggressive steps to investigate the
Takata airbag ruptures, it is possible that this defect could have been
addressed years earlier.
To restore consumer confidence in the safety of vehicles, it is
imperative that Congress take action to enhance NHTSA's regulatory and
enforcement authorities. Similarly, automakers and part suppliers must
redouble their internal safety efforts. As this report shows, it is not
enough to merely conduct safety audits after problems are detected.
Rather, safety must be built-in as a core component of a manufacturer's
internal culture.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Nelson. And thank you for your cooperation on this.
And you will recall, Mr. Chairman, last year we actually
the started the hearings on these airbag defects. And the news
was not good. At that point, last November, we had five deaths
and dozens of injuries that were ties to the defective Takata
airbags.
And we had testimony from an Air Force lieutenant,
Lieutenant Stephanie Erdman. She suffered severe facial
injuries and almost lost one of her eyes when her airbag
exploded after a relatively minor accident in the Florida
panhandle near Eglin Air Force Base.
But since then, the recalls have ramped up, appropriately,
but unfortunately the tragedies have continued. January, this
year, Houston, a man killed by a Takata airbag that exploded in
his vehicle after a minor accident. And then April, a 22-year-
old was involved in an accident, Lafayette, Louisiana. The
wreck was serious, but, as you can see--look at this airbag.
And do we have the pictures of the lady?
That is the one from Florida, isn't it? OK. Hold that back.
Hold that one back.
You can see--now, this is a normal airbag deployed. This is
the front of what would be facing the driver in the steering
wheel. And, of course, it deploys. And if it deploys normally,
it is supposed to look like that. OK?
This is what happened in this case that I just referenced
in Louisiana. That is blood. But look at the tear in the
airbag. You can see that it obviously has been punctured. And
instead of it being like that, the shrapnel in the inflator--
which is this device which is in the steering wheel, underneath
the steering wheel, and this explodes, sending hot gas out and
inflating the airbag. Well, when it is defective, it explodes
with such force that it actually breaks open the metal, and the
metal goes out. And then, of course, instead of the airbag
saving lives, it is killing people.
Let me show you. That is a piece of metal that actually
came out on this lady, and this lady is in Miami last July.
Look how big that is. Now, that hit her, and thank goodness it
hit her there in a relatively superficial wound that is a
permanent scar. But what if it had hit her there? Or what if it
had hit her there? That is the piece that hit her.
This is deadly serious business. Just last Friday, we
learned of the eighth death, southern California, conclusively
tied to a defective Takata airbag. And some of these victims'
families got recall notices--got recall notices after their
loved ones were killed. And in addition to the eight deaths,
this committee has learned of allegations of well over 100
serious injuries.
Now, I got into this thing because there was a woman killed
in Orlando. This was a year ago. That is how I got into it.
When the police got to the car, they thought it was a homicide.
They thought somebody had slashed her throat. And only
afterwards did they find out that, in fact, this is what it
was.
And then I got into it because of a firefighter that lives
in the Orlando area. He won't be a firefighter again because he
lost his eye now.
And so I could go on and on about these incidents just in
Florida alone, but the bottom line is we need to get these cars
fixed. And we have been talking about this since last year.
Dr. Rosekind has been a breath of fresh air, and you have
taken numerous actions to speed up the Takata recall process,
but NHTSA still faces deep challenges.
For one thing, as no doubt you will point out, it is
underfunded. It lacks the necessary funding to make sure that
automakers--and the sticks, as well as the carrots, it lacks to
get the automakers to be forthcoming about the recalls.
And, by the way, this isn't the only thing. We are not just
picking on Takata. Look how many deaths occurred from the GM
defective steering ignition switches. GM hid a defect for over
a decade, and at least 114 people died. This is awful. And for
that, NHTSA could only fine GM a measly $35 million, and that
is less than one-hundredth of a percent of what GM makes in a
quarter.
And NHTSA also appears to have serious internal and
managerial issues. These challenges were detailed in this
Department of Transportation Office of Inspector General report
released yesterday that revealed serious problems in NHTSA's
Office of Defects Investigation, especially related to the
handling of the GM crisis last year.
And so I can tell you, this Senator is going to fight for
additional funding for NHTSA, but there also has to be
accountability. And the IG report found severe deficiencies in
NHTSA's ability to effectively collect and analyze safety data
as well as conduct investigations. The agency lacks proper
protocols and procedures. And staff, apparently, are
inadequately trained to do their job. We need accountability.
And I look forward, Doctor, to hearing how you intend to
respond to this report that has now been put in the record and
how you continue to modernize the agency.
And, finally, I look forward to hearing from the
representatives of Takata.
Yesterday, the staff issued a report detailing its initial
findings in a months-long investigation of Takata. And for
years, it is obvious that Takata did not put safety first. It
appears that Takata knew, or should have known, as early as
2001--that is 14 years ago--that there were serious safety and
quality lapses in its airbag production process.
And you would think that they would have stepped up their
safety efforts at these plants after discovering these issues.
No. And, by the way, there are eight people dead. Instead,
internal e-mails suggest they actually suspended global safety
audits from 2009 to 2011 for cost-cutting reasons.
And now the same company responsible for this disaster is
the one making nearly all of the replacement airbags for most
of the recalled vehicles. That doesn't sit well with a lot of
Americans. And I think Takata has some serious explaining to
do.
So for everyone involved--NHTSA, to automakers, to the
suppliers--we need to improve as fast as possible. And we need
to get the recall completed but also make sure that the safety
issues are spotted sooner so that dangerous vehicles are
identified and fixed faster in order to do what we are supposed
to do, which is help keep consumers safe.
Mr. Chairman, if I sound that I am invested in this issue--
when I saw the pictures of that woman in Orlando with her neck
lacerated, I am invested. When I talked to that firefighter,
with his little boy with him, that will never be a firefighter
again because he doesn't have an eye, I am invested.
So thank you for calling this hearing.
The Chairman. Thank you, Senator Nelson.
We will now proceed to our panel and start with
Administrator Rosekind.
Please proceed. Thanks.
STATEMENT OF HON. MARK R. ROSEKIND, Ph.D.,
ADMINISTRATOR, NATIONAL HIGHWAY TRAFFIC SAFETY
ADMINISTRATION, U.S. DEPARTMENT OF TRANSPORTATION
Mr. Rosekind. Chairman Thune, Ranking Member Nelson, and
members of the Committee, thank you for the opportunity to
provide an update on NHTSA's efforts to address vehicle safety
defects, including defective Takata airbags.
The recall of defective Takata airbags may represent the
largest national consumer safety recall in history, and it is
certainly one of the most complicated.
All of NHTSA's actions are targeted at achieving one goal,
the only acceptable goal: a safe airbag in every American
vehicle.
On May 19, Secretary Foxx and NHTSA took a significant step
toward this goal and announced that Takata, at the agency's
insistence, had filed four defect reports, launching national
recalls of an estimated 33.8 million defective airbag
inflators.
The 11 affected auto manufacturers have now made available
individual Vehicle Identification Numbers so that vehicle
owners can go to safercar.gov and use NHTSA's VIN lookup tool
to determine if their vehicle is under recall.
Affected consumers should contact their dealers to arrange
a replacement airbag as soon as possible. Consumers may also
request a free loaner or rental vehicle from the dealer while
they wait for a replacement airbag.
After reviewing automaker filings, our current estimate is
that there are about 34 million defective airbags in 32 million
affected vehicles.
NHTSA has issued a consent order to Takata that, among
other things, gives NHTSA the ability to ensure the adequacy of
the remedy. For the first time ever, NHTSA is using authority
provided by the TREAD Act and other authorities for a
coordinated remedy program to prioritize and organize recall
and remedy efforts.
Late last week, NHTSA sent information requests to all of
the affected automakers, Takata, and other potential suppliers
of replacement parts, seeking information as part of our
coordinated remedy program.
In addition, we have had initial discussions with the
affected companies on a protective order that would allow these
companies to share confidential business information with NHTSA
and one another so that confidentiality concerns do not
interfere with our safety efforts.
In a separate action, NHTSA is in the process of
determining whether Fiat Chrysler Automobiles is in violation
of the Safety Act's requirements to remedy safety defects
adequately and within a reasonable time. NHTSA has scheduled a
July 2nd hearing to examine 22 recalls that affect more than 11
million vehicles.
At NHTSA, we are determined to use every tool available to
protect the traveling public, and one critical tool is self-
evaluation. At the urging of Secretary Foxx, with the full
support of NHTSA's staff and leadership, and before I arrived,
NHTSA was involved in tough self-examination after one of the
most challenging years in the agency's history.
On June 5, NHTSA released two reports that are essential in
our efforts to improve our own effectiveness. The first report,
``NHTSA's Path Forward,'' provides the results of a year-long
due diligence review of our defect investigation process. Our
review found weaknesses in processes for identifying and
addressing defects. We are addressing those weaknesses with
improvements already underway and within existing resources.
The second report is a workforce assessment that details
how the President's Fiscal Year 2016 budget request
specifically requests NHTSA's mission needs. In addition, the
report examines NHTSA's workforce, given the 265 million
vehicles we monitor, compared to the safety investigation
workforces in other modes of transportation. It provides one
possible path toward matching NHTSA's workforce to those
challenges.
At Secretary Foxx's request, the Department of
Transportation's Inspector General performed an audit of
NHTSA's investigation of the GM ignition switch defect. NHTSA
thanks Inspector General Scovel and his staff for their
diligence. Their report is a helpful contribution to our
efforts, and we have concurred with all 17 of the report's
recommendations.
To give you a sense of NHTSA's commitment to improving
efforts to identify and address safety defects, to date we have
implemented or initiated 44 separate changes to improve our
effectiveness. That includes efforts to address 10 of the 17
recommendations from the IG's audit that were underway before
the audit's release.
Two factors outside the scope of the IG's audit are
essential to NHTSA achieving its mission. The first is GM's
concealment of critical safety information from NHTSA. If I
could sum up our process improvements in a single phrase, it
would be, ``Question assumptions.'' Question the information
NHTSA gets from industry, and question our own assumptions.
The second factor also outside the scope of the Inspector
General's audit is available resources. The same 51 people
managing the Takata recall include 8 that analyze 80,000
consumer complaints; 8 others oversee more than 1,200 recall
campaigns now underway; and 16 others continue to investigate
scores of potential defects.
The agency must accomplish this task with a defects
investigation budget that, when adjusted for inflation, is 23
percent lower than 10 years ago. The President's Fiscal Year
2016 budget request would provide the people and technology
needed to keep Americans safe.
Secretary Foxx has proposed the GROW AMERICA Act, which
would provide stable increased funding and important safety
authorities to help NHTSA in our mission. It is clear that gaps
in available personnel and authority represent known safety
risks. The members of this committee and your colleagues in
Congress can help NHTSA address those risks and keep the
traveling public safe.
Thank you for this opportunity to testify, and I look
forward to your questions.
[The prepared statement of Mr. Rosekind follows:]
Prepared Statement of Mark R. Rosekind, Ph.D., Administrator, National
Highway Traffic Safety Administration, U.S. Department of
Transportation
Chairman Thune, Ranking Member Nelson, and members of the
Committee, thank you for the opportunity to provide an update on
NHTSA's efforts to address vehicle safety defects, including defective
Takata air bags.
Let me first address Takata. The recall of defective Takata air
bags may represent the largest national consumer recall in history. It
is certainly one of the most complicated.
You and the American people should know: Air bags save lives.
Frontal air bags saved 2,388 lives in 2013 alone and 39, 886 lives
since 1987. We need to make sure that people trust their air bags. All
of our actions are targeted at achieving our goal, the only acceptable
goal: a safe air bag in every American vehicle.
On May 19, Secretary Foxx and NHTSA took a significant step toward
ensuring that air bags in all vehicles are safe. As part of NHTSA's
ongoing investigation, NHTSA announced that Takata, at the agency's
insistence, had filed four Defect Information Reports (DIR) covering an
estimated 33.8 million defective air bag inflators. This action
launched national recalls for all of the named air bag inflators and
significantly expanded the universe of vehicles with Takata air bag
inflators that were subject to recall.
The 11 affected auto manufacturers have scoured their records and
state registrations to determine exactly which vehicles are affected,
and have provided NHTSA with specific make and model information. As
they have provided that information, NHTSA has posted updates on a
special website within safercar.gov, informing consumers about make and
model information. We strongly encourage vehicle owners to check their
VIN numbers on Safercar.gov to see if their vehicle is included in the
expansion. In fact, this is a good practice for all vehicle owners to
engage in regularly, at least weekly.
Automakers are legally responsible for informing consumers, via a
mailed notice, that their vehicle is subject to a recall. In addition,
under the Consent Order announced on May 19 Takata must, within 60
days, provide NHTSA with plans for how it, alone and in concert with
automakers, will use traditional media, new media and individual
contacts to inform consumers and boost completion rates.
On May 19 and 20, after the Department of Transportation/NHTSA
announcement, more than 1.5 million people conducted VIN lookup
searches on Safercar.gov, including nearly 1 million on May 20 alone.
At one point, Safercar.gov was the most visited website in the Federal
Government.
Understandably, consumers will want to know what this expanded
recall means for them and what actions they should take. If a vehicle
has an open recall, consumers should call their dealer to arrange for a
replacement air bag as soon as one is available. Because of the size
and scope of the recall, a replacement may not be immediately
available. In order to mitigate and control the risk, and to organize
and prioritize the availability of replacement air bags, NHTSA is
taking steps to coordinate the remedy process among Takata, the auto
manufacturers, and other air bag suppliers--something NHTSA has never
done before in its history.
In the meantime, consumers whose air bags are under recall may
continue to drive their vehicles and should stay in contact with their
dealers in order to replace their air bag as soon as replacements are
available. Consumers may also check with the dealer for a free loaner
or rental vehicle, as offered by some auto manufacturers, while they
wait for a replacement air bag.
The four defective air bag inflator models and affected automakers
included in these recalls are as follows:
Expanded Recalls
The first DIR Takata filed declares a defect in all PSDI, PSDI-4,
and PSDI-4K model driver inflators. Five automakers are affected
(Honda, BMW, Chrysler, Ford, and Mazda). Takata estimates that this
recall covers 17.6 million inflators, 9.7 million of which are already
subject to prior recalls and safety campaigns.
The second DIR declares a defect in all SPI model passenger
inflators made between 2000 and 2008. Eight automakers are affected
(Chrysler, Ford, GM, Daimler Trucks, Mitsubishi, Nissan, Subaru, and
Toyota). Takata estimates the recall covers 7.7 million inflators, 2.8
million of which are already under recall.
The third DIR covers PSPI-L model passenger inflators in cars
manufactured by Honda and Toyota. Model years vary by automaker. GM is
also affected because it sold the Toyota-made Pontiac Vibe. Takata
estimates 5.2 million inflators are covered, 1.1 million of which are
already under recall.
The fourth DIR covers PSPI model passenger inflators in certain
Honda models. Takata estimates this covers 3.3 million inflators, 2.1
million of which are already subject to prior recall.
As you know, it is the responsibility of individual automakers to
remedy defective components. Takata's filing of Defect Information
Reports has led to subsequent DIR filings by each of the affected
automakers. After receiving those filings, reviewing them and asking
for clarifications from the automakers, our current estimate is that
there are about 32 million defective inflators on American roads that
must be replaced.
It is important to note that this number is an estimate, and will
be refined as automakers gather additional information. We know that
there are almost certainly vehicles that are counted twice, because
they are equipped with two inflators--driver and passenger-side--that
must be replaced. In addition, we know that some inflators will have to
be replaced more than once. We do not yet know how many vehicles are in
that category because Takata and automakers have not yet provided us in
all cases with information to establish that they have identified a
remedy that is safe for the lifetime of the vehicle--information NHTSA
is seeking as part of our coordinated remedy process. We have asked all
the affected automakers to provide us with a comprehensive list of
makes, models and model years affected by the Takata recalls, and have
provided that list to the public through the Takata microsite on
safercar.gov.
Coordinated Remedy
To deal with the extraordinary complexity of the Takata recall,
NHTSA is using all of the tools at its disposal to prioritize and
organize these national recalls, and to ensure the adequacy of the
remedy. In addition to the defect notifications, NHTSA has issued a
Consent Order to Takata. This Consent Order, among other things, gives
NHTSA oversight into the company's testing, requires the company's full
cooperation with NHTSA's investigation, and, importantly, gives NHTSA
the ability to ensure the adequacy of the remedy so that there will be
a safe air bag in every vehicle.
Additionally, NHTSA has begun its own testing for oversight and to
verify if the remedy is effective.
Fifteen years ago, Congress provided authority in the TREAD Act
that gives NHTSA the ability to address the challenges and
circumstances now faced in this recall. For the first time ever, NHTSA
is using this authority, in conjunction with other authority under the
Safety Act, to open a coordinated remedy proceeding to prioritize and
organize vehicle manufacturers' recall and remedy programs related to
the defective Takata air bag inflators.
On Friday, May 22, 2015, the Federal Register published NHTSA's
notice of intent to open this proceeding. A supplementary notice
published on June 5 opened a docket for public comment on a variety of
issues related to the replacement of the air bag inflators. NHTSA will
obtain relevant information from any and all sources regarding the
availability and implementation of remedy parts and programs in a
process that will be public and transparent. NHTSA also plans to hold a
series of meetings to collect additional information from Takata, auto
manufacturers, and air bag suppliers.
It is NHTSA's expectation that this process will provide the
necessary data on which to develop a plan to prioritize and organize
replacement inflators.
Root Cause
By now, everyone had hoped to have a more clear understanding of
the root cause of these air bag inflator failures. There are several
factors that, based on incidents in the field and from lab test data,
are known to lead to an increased risk of an inflator rupture.
Prolonged exposure to persistent levels of high absolute humidity
outside the inflator, combined with the effects of thermal cycling, may
lead to moisture intrusion in some inflators over time. As a result of
moisture intrusion, the propellant wafers in some of the subject
inflators may experience an alteration over time, which could lead to
over-aggressive combustion in the event of an air bag deployment.
Takata is also aware of a potential issue with internal tape seal
leaks in some inflators that could also be a source of moisture
intrusion. Takata's test results and investigation indicate that the
potential for rupturing may also depend on other factors, including
vehicle design factors and manufacturing variability.
So while NHTSA's analysis of the data shows that prolonged exposure
to hot, humid climates is associated with greater risk, the full story
is not yet known and a definitive root cause has not been identified.
In my recent experience as a Member of the National Transportation
Safety Board, I know there may not be a single root cause, and we may
in fact never know the root cause. But Boeing did not wait to find a
remedy for the lithium battery in its 787 Dreamliner despite not
knowing the root cause of the fire and smoke incidents that grounded
the fleet. NHTSA must act to protect the driving public and ensure
their air bags are safe. That is why NHTSA is taking aggressive action
to keep people safe on the road now, rather than waiting, perhaps
indefinitely, to determine the root cause.
Fiat Chrysler recall issues
In addition to our efforts regarding Takata, NHTSA is in the
process of determining whether Fiat Chrysler Automobiles is in
violation of the Safety Act's requirements to remedy safety defects
adequately and within a reasonable time. NHTSA has scheduled a July 2
hearing as part of that process. That hearing will examine 22 recalls
that affect more than 10 million vehicles, and will evaluate the
timeliness and effectiveness of remedies and the adequacy of the
company's consumer notifications.
In each of those 22 recalls, NHTSA has significant concerns about
Fiat Chrysler's performance. On June 18, NHTSA published a notice in
the Federal Register that outlines those concerns. They include slow
repairs on vehicles responsible for loss of control and fatal fires;
remedy repairs that failed to prevent dangerous roof liner fires; and
failure in at least eight cases to notify owners of recalls in a timely
fashion, including recalls of Takata air bags for which Fiat Chrysler
to date still has not provided notification to owners. The company also
has on several occasions provided NHTSA with inaccurate or incomplete
information on defects and communications with owners and dealers.
Based on information gathered from the public and from Fiat
Chrysler, NHTSA will make a final determination as to whether Fiat
Chrysler has failed to meet its obligations under the Safety Act, and
take any actions that are appropriate based on that determination.
Internal reviews and the Inspector General's audit
At NHTSA, as I have said repeatedly, we are determined to use every
tool available to protect the traveling public. And one critical tool
is self-evaluation. While we are focused on holding the entities we
regulate accountable, we have also looked for every way we can find to
improve our own performance.
That is not something new. Before I arrived, at the urging of
Secretary Foxx and with the full support of NHTSA's staff and
leadership, NHTSA was involved in tough self-examination after one of
the most challenging years in the agency's history. NHTSA's approach to
Takata, Fiat Chrysler and the scores of other defect-related issues we
deal with every day has been informed by the lessons learned in that
process.
On June 5, NHTSA released two reports that are essential elements
in our efforts to improve our performance. In addition, we announced
two initiatives--one involving some of the top safety experts in the
country, the other tapping NHTSA's internal strengths--to help us turn
the lessons of our self-scrutiny into concrete safety gains.
The first internal report, ``NHTSA's Path Forward,'' provides the
results of a year-long due diligence review of our defect investigation
process in the wake of the GM ignition switch investigation. Our review
found weaknesses in our process for identifying and addressing defects,
and we are making changes to address those weaknesses. The report
addresses six major process improvements to do a better job of holding
the industry and ourselves accountable. With small exceptions, all of
these improvements are under way and we intend to make them within
existing resources. Whatever resources are provided to our agency, we
are committed to doing better with what we have.
The second report is a workforce assessment that stems from a 2011
recommendation by the Department of Transportation's Inspector General
in the wake of the Toyota unintended acceleration case. At the heart of
that recommendation was the question of whether NHTSA had enough staff
with sufficient expertise to assess defects in an increasingly complex
U.S. vehicle fleet. As we have said since its release, the President's
2016 budget request for NHTSA reflects the lessons of the GM
investigation, and this workforce assessment provides significant
detail on how the FY16 budget request would help us complete our
mission. But in addition, the report examines NHTSA's defects
investigation workforce in light of the size of the fleet we monitor,
the scope of the safety risk to the American public, and in light of
safety investigation workforces in other modes of transportation, and
provides one possible path, in what would be a several-year process,
toward matching NHTSA's workforce to those challenges.
When we released our internal reports, we made two additional
announcements on initiatives that will help us improve our performance.
The first is the creation of an outside Systems Safety Team to help
us implement our enhanced systems safety approach. In Drs. Joe Kolly,
Vic Lebacqz and Jim Bagian, we have three of the most respected safety
professionals in the world to help us implement our improvements.
Complementing this external team is an internal effort designed to
tackle our toughest safety challenges. That effort will use multi-
disciplinary teams from across NHTSA to address safety risks or
problems that cut across our various lines of work.
In addition to our own efforts, the Department of Transportation's
Inspector General has, at Secretary Foxx's request, performed an audit
of NHTSA's investigation of the GM ignition switch defect. Let me take
this opportunity to thank Inspector General Scovel and his staff for
their diligence. We believe the report is a helpful contribution to our
efforts to better identify and address safety defects, and we have
concurred with all 17 of the report's recommendations. In fact, many of
the Inspector General's findings reinforce the findings of our internal
examinations. We will aggressively implement the Inspector General's
recommendations, and anticipate implementation of all 17
recommendations within one year, with the understanding that at least
two recommendations may require rulemaking, which could extend that
timeline.
Two factors outside the scope of the Inspector General's audit are
essential to achieving NHTSA's mission. The first is a hard lesson from
the GM experience, in which, as GM has acknowledged, the company
concealed critical safety information from NHTSA that would have
radically changed the agency's understanding of its ignition switch
affected air bag deployment. While GM's deception was not within the
scope of the Inspector General's audit, NHTSA cannot ignore the fact
that manufacturers may seek to intentionally deceive us. If I could sum
up our process improvements in a single phrase, it would be: question
assumptions. Question the information we get from industry, and
question our own assumptions.
The second factor, also outside the scope of the Inspector
General's audit, is available resources. Fixing problems such as the
Takata recalls and Fiat Chrysler's recall performance is a monumental
task. Yet the agency must manage this enormous and necessary task with
its existing people, technology, and authorities. NHTSA must accomplish
this task with a defects investigation budget of $10.6 million, a
figure that, when adjusted for inflation, is actually 23 percent lower
than its budget 10 years ago.
We need your support to help us protect the safety of the American
traveling public. The President has submitted a budget request that
would fund significant improvements in NHTSA's defect investigation
efforts, providing the people and technology needed to keep Americans
safe. Secretary Foxx has proposed the GROW AMERICA Act, which would
provide stable, increased funding for our agency and important safety
authorities to help us in our mission, such as raising the maximum
civil penalty to $300 million.
At NHTSA, we address safety risks every day. In my judgment as a
safety professional, gaps in our available personnel, technology and
authority are a known risk. I urge the members of the Committee and
your colleagues in Congress to help us address that risk and keep the
traveling public safe on America's roadways. Thank you for this
opportunity to testify and I look forward to your questions.
The Chairman. Thank you, Administrator Rosekind.
Mr. Scovel?
STATEMENT OF HON. CALVIN L. SCOVEL III, INSPECTOR GENERAL, U.S.
DEPARTMENT OF TRANSPORTATION
Mr. Scovel. Chairman Thune, Ranking Member Nelson, members
of the Committee, thank you for inviting me to discuss NHTSA's
vehicle safety oversight.
As you know, strong oversight is critical for taking timely
action against vehicle defects, such as GM's faulty ignition
switch. As of this month, this defect has been linked to more
than 110 fatalities and 220 injuries.
Airbag nondeployments prompted NHTSA's Office of Defects
Investigation to look at certain GM vehicles as early as 2007,
but ODI ultimately determined an investigation was not
warranted. We now know that the faulty ignition switch can
unexpectedly disable the vehicle's power steering, power
brakes, and airbags.
Today, I will discuss the weaknesses we identified relating
to ODI's procedures for collecting and analyzing vehicle safety
data and for determining which issues warrant further
investigation. I will also show how the weaknesses we
identified affected ODI's handling of the GM ignition switch
defect.
We identified three areas of weakness in NHTSA's vehicle
safety procedures that undermine its efforts to identify and
investigate vehicle safety concerns.
First, ODI lacks the procedures needed to collect complete
and accurate vehicle safety data. The use of ODI's early
warning aggregate data is limited due to the inconsistencies in
how manufacturers categorize safety incidents. ODI guidance
specifies 24 categories for reporting potential defects related
to an average of over 15,000 vehicle components, leaving
manufacturers to use broad discretion when reporting these
data.
Consumer complaints, ODI's primary source for identifying
safety concerns, similarly lack information to correctly
identify the vehicle systems involved, due in large part to the
lack of guidance to consumers. Further, ODI does not adequately
verify manufacturers' data or take timely action to enforce
manufacturers' compliance with reporting requirements.
Second, ODI does not follow standard statistical practices
in analyzing early warning reporting data. Consequently, it
cannot identify statistically significant trends or outliers
that may indicate a safety issue should be pursued.
In addition, despite the volume of consumer complaints,
which averaged roughly 330 a day in 2014, ODI relies on one
initial screener in the first phase of its two-tiered screening
process. This process leaves the office vulnerable to a single
point of failure, and it runs the risk that complaints with
potential safety significance may not be selected for further
review. Inadequate training and supervision of screeners
further increase this risk.
Third, ODI emphasizes investigating issues that are most
likely to result in recalls, which has blurred the line between
pre-investigative and investigative duties. Investigative
duties, such as research and engineering analysis work, are
being performed during the pre-investigative phase, often by
screeners who are not trained to carry out these
responsibilities.
In addition, stakeholders within ODI have not reached
consensus on the amount and type of information needed to open
investigations. And ODI does not always document the
justifications for its decisions not to investigate potential
safety issues. This lack of transparency and accountability in
ODI's investigation decisions further undermines NHTSA's
efforts to identify needed recalls and other corrective
actions.
These three procedural weaknesses impeded ODI's handling of
the GM ignition switch defect. From 2003 through 2013, GM
submitted over 15,000 non-dealer field reports and about 2,000
death and injury reports on vehicles that would ultimately be
subject to the ignition switch recall.
However, inconsistently miscategorized reports may have
masked potential safety defect trends. For example, GM did not
assign a component code to a death and injury report--not
airbags, not electrical, not ignition--even though a state
trooper's report indicated that the ignition switch was
involved in the accident and a possible cause of airbag
nondeployment.
In addition, at least 12 GM non-dealer field reports
categorized by GM under ``airbags'' and that may have been
related to the ignition switch defect were not reviewed before
the recall because NHTSA's analytical tools could not read the
report format used by GM, a fact ODI staff did not note until
after the recall.
ODI staff also missed opportunities to connect the GM
ignition switch defect to airbag nondeployments. For example,
ODI employees overlooked documentation on a fatal accident
involving a 2005 Cobalt that linked the ignition switch defect
to the vehicle's airbag nondeployment, including a state
trooper's accident investigation report and a NHTSA special
crash investigation report.
Calls for investigation were similarly overlooked. For
example, in 2007, NHTSA's Associate Administrator for
Enforcement noted that an investigation proposal, quote,
``looks like one we want to jump on and learn as much as we can
quickly.'' While a screener was assigned to monitor the issue,
the Defects Assessment Division Chief did not reassign
responsibility after the screener left NHTSA in 2008.
In 2010, an ODI screener suggested revisiting the 2007
investigation proposal on airbag nondeployments because of new
consumer complaints. However, the airbag investigator
identified a downward rate of consumer complaints for the
vehicles, so the screener decided that the issue did not
present enough of a safety trend to warrant proposing another
investigation.
According to ODI staff, there were no discussions of the
ignition switch defect that, in fact, caused airbag
nondeployment prior to GM's February 2014 recall. In hindsight,
ODI officials told us that they did not understand the safety
consequences of the ignition switch defect and had a flawed
understanding of airbag technology.
NHTSA has committed to taking aggressive action to
implement the 17 recommendations we made to strengthen vehicle
safety oversight. According to the Administrator, extensive
changes to the agency's processes have been implemented, and
more are underway.
OIG's audits and investigations support NHTSA's vehicle
safety oversight mandate. Our agents played a critical role in
the multiagency criminal probe of Toyota and continue to
actively pursue allegations of criminal conduct related to
vehicle safety. Our auditors are currently assessing NHTSA's
actions to implement recommendations we made in 2011 and plan
to report our findings later this year.
Mr. Chairman, with your permission, I would like briefly to
address those who have been injured and the families of those
who have been lost in crashes involving GM's defective ignition
switches.
When testifying before this committee last year, I promised
you that my staff and I would work relentlessly to determine
what NHTSA knew of the defect, when it knew it, and what
actions NHTSA took to address it. Our audit report issued last
week and my testimony today fulfill that promise. I offer you
again my deepest sympathy.
This concludes my prepared statement. I would be happy to
answer any questions that you, Mr. Chairman, and other
committee members may have.
[The prepared statement of Mr. Scovel follows:]
Prepared Statement of Hon. Calvin L. Scovel III, Inspector General,
National Highway Traffic Safety Administration, U.S. Department of
Transportation
NHTSA's Efforts to Identify Safety-Related Vehicle Defects
Chairman Thune, Ranking Member Nelson, and Members of the
Committee:
Thank you for inviting me to this important hearing on your ongoing
efforts to examine the National Highway Traffic Safety Administration's
(NHTSA) vehicle safety oversight program. In April 2014, I testified at
this Committee's hearing \1\ on the General Motors Corporation's (GM)
delay in recalling 8.7 million vehicles \2\ for a faulty ignition
switch--a defect, which as of this month, has been linked to more than
110 fatalities and 220 injuries--and committed to determining what
NHTSA knew of this safety defect, when the Agency knew it, and what
actions were taken to address it. In addition, the Secretary of
Transportation requested that we examine NHTSA's current safety defect
investigation processes and make recommendations for improvement.
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\1\ Identifying and Investigating Vehicle Safety Defects (OIG
Testimony CC-2014-015), Apr. 2, 2014. OIG testimonies and reports are
available on our Website: www.oig.dot.gov.
\2\ Recalled vehicles include Chevrolet Cobalts and HHRs, Saturn
Ions and Skys, and Pontiac G5s and Solstices that were manufactured
between 2003 and 2011.
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My testimony today highlights our findings, which we recently
reported \3\--specifically, our assessment of the procedures NHTSA's
Office of Defects Investigation (ODI) uses to (1) collect vehicle
safety data, (2) analyze the data and identify potential safety issues,
and (3) determine which issues warrant further investigation.
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\3\ Inadequate Data and Analysis Undermine NHTSA's Efforts To
Identify and Investigate Vehicle Safety Concerns (OIG Report No. ST-
2015-063), June 18, 2015.
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Summary
ODI lacks the procedures needed to collect complete and accurate
vehicle safety data. Notably, ODI guidance specifies 24 categories for
reporting potential vehicle defects related to an average of over
15,000 vehicle components, leaving manufacturers to use broad
discretion in reporting early warning data. Further, ODI does not
adequately verify the data manufacturers submit. Consumer complaints--
ODI's primary source for identifying safety concerns--similarly lack
information to correctly identify the vehicle systems involved.
When analyzing early warning reporting data, ODI does not follow
standard statistical practices. Consequently, it cannot differentiate
outliers and trends that represent random variation from those that are
statistically significant. In addition, ODI does not thoroughly screen
consumer complaints or adequately train or supervise its staff in
screening complaints. Collectively, these weaknesses have resulted in
significant safety concerns being overlooked.
ODI's process for determining when to investigate potential safety
defects further undermines efforts to identify needed recalls and other
corrective actions. ODI emphasizes investigating issues that are most
likely to result in recalls, which has led to considerable
investigative duties being performed during the pre-investigative
phase, often by screeners who are not trained to carry out these
responsibilities. In addition, ODI does not always document the
justifications for its decisions not to investigate potential safety
issues and does not always make timely decisions on opening
investigations.
Background
ODI is responsible for reviewing vehicle safety data, identifying
and investigating potential vehicle safety issues, and requiring and
overseeing manufacturers' vehicle and equipment recalls (see table 1).
NHTSA reports that it has influenced, on average, the recall of nearly
9 million vehicles every year since 2000.
Table 1.--ODI's Vehicle Safety Oversight Process
------------------------------------------------------------------------
Number
Phase of Description
Staff
------------------------------------------------------------------------
Pre-Investigation 13 ODI collects and analyzes vehicle
safety data to identify and
select potential safety issues
for further investigation.
------------------------------------------------------------------------
Investigation 20 ODI investigates the potential
safety issue to determine
whether a recall is warranted.
------------------------------------------------------------------------
Recall management 8 ODI ensures that manufacturer
recalls comply with statutory
requirements.
------------------------------------------------------------------------
Source: OIG analysis
ODI's pre-investigative phase includes four key elements:
Collect and analyze early warning reporting data. The
Transportation Recall Enhancement, Accountability, and
Documentation (TREAD) Act \4\ of 2000 authorized NHTSA to
require manufacturers to report on a variety of early warning
data. This data includes property damage claims, consumer
complaints, warranty claims, and field reports from incidents
involving certain vehicle components and conditions defined in
NHTSA regulations.\5\ In addition, manufacturers are required
to report all death and injury claims and notices. ODI's Early
Warning Division staff \6\ are responsible for verifying that
manufacturers submit these data, prioritizing the data using
statistical tests, and identifying and referring potential
safety trends to the Defects Assessment Division for further
analysis.
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\4\ Pub. L. 106-414.
\5\ Title 49, Code of Federal Regulations (CFR), Part 579.
\6\ The Early Warning Division currently has four staff including
two safety defects analysts, one statistician, and one safety defects
engineer.
Collect and analyze consumer complaints. ODI receives
consumer complaints through a variety of sources including
letters, vehicle safety hotline calls, and submissions through
NHTSA's safercar.gov Website. ODI's Defects Assessment Division
screens all complaints and forwards ones with potential safety
significance for additional review.\7\
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\7\ The Defect Assessment Division currently has nine staff
including eight screeners and a Division Chief.
Identify potential safety issues. If a potential safety
issue is identified, the Defects Assessment Division researches
and analyzes available safety data and prepares an
investigation proposal for ODI's investigative division chiefs
to review.\8\
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\8\ ODI has three investigative divisions: the Vehicle Control
Division, Vehicle Integrity Division, and the Medium and Heavy Duty
Vehicle Division.
Select potential safety issues to investigate. ODI's
investigative division chiefs review investigation proposals
and recommend to the Director of ODI whether to open an
investigation, decline an investigation, or refer the proposal
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to the Defects Assessment Panel for further review.
In October 2011, we reported on NHTSA's vehicle safety oversight
and made 10 recommendations for improving ODI's processes for
identifying and addressing safety defects.\9\ As of May 29, 2013, ODI
had taken action to address nine recommendations; at the end of April
2015, NHTSA completed a workforce assessment, our remaining
recommendation. We are conducting a separate audit to assess these
actions and plan to report our findings later this year.
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\9\ Process Improvements Are Needed for Identifying and Addressing
Vehicle Safety Defects, (OIG Report Number MH-2012-001), Oct. 6, 2011.
OIG reports are available on our Website at www.oig.dot.gov.
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ODI Lacks Effective Procedures for Collecting Complete and Accurate
Vehicle Safety Data
ODI lacks effective guidance and verification procedures to obtain
complete and accurate early warning reporting data and take timely
action to correct identified inaccuracies and omissions. ODI received
some early warning reporting data and consumer complaints related to
the GM ignition switch defect more than a decade before GM notified ODI
of the recall.
ODI Lacks Detailed Guidance and Verification Processes to Obtain
Complete and
Accurate Early Warning Reporting Data
The TREAD Act and related regulations require vehicle and equipment
manufacturers to report quarterly to NHTSA on a variety of early
warning reporting data that could indicate a potential safety defect.
Such data include warranty and property damage claims, consumer
advisories, and foreign recalls of vehicles substantially similar to
ones sold in the United States.
Regulations specify 24 broad vehicle codes that manufacturers
assign to reported early warning safety data. However, ODI notes that
an average vehicle may have over 15,000 components, and categorizing
them can be open to interpretation. For example, ODI staff told us that
a manufacturer could assign one of three vehicle codes to a malfunction
of an air bag component located in a seat: air bags, seats, or
electrical system. Additionally, the regulations allow manufacturers to
decide if an incident not included in the 24 defined codes should be
reported, with the exception of incidents related to death and injury
claims, which must be reported.
Despite this complexity, ODI does not provide detailed guidance to
help ensure manufacturers appropriately interpret and apply the
codes.\10\ ODI investigative chiefs and vehicle safety advocates told
us that ODI's early warning aggregate data are ultimately of little use
due to the inconsistencies in manufacturers' categorizations of safety
incidents.
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\10\ According to ODI staff, such guidance would require additional
rulemaking.
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According to ODI staff and a January 2008 report issued by the
Volpe National Transportation Systems Center,\11\ non-dealer field
reports \12\ are the most important source of early warning reporting
data because they can provide a specific, technical basis for launching
investigations. However, lacking guidance on what information should be
reported, manufacturers submit reports of varying usefulness. For
example, one manufacturer's non-dealer field reports include detailed
information--such as the technician's analysis of the condition, root
cause analysis, corrective actions taken, and whether the action
resolved the condition--while another manufacturer's reports contain
brief descriptions of consumers complaints.
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\11\ In 2006, ODI initiated an evaluation of its early warning
reporting system, with support from Volpe.
\12\ Non-dealer field reports are communications between consumers,
authorized service facilities, and manufacturers regarding the failure,
malfunction, lack of durability, or other performance problem related
to a vehicle or vehicle part.
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ODI staff check that manufacturers submit early warning reporting
data on time and may request underlying documentation for aggregate
data--particularly if they identify an anomaly in the data--and for
death and injury data. However, ODI staff noted that their requests for
such documentation have declined, from an average of 23 annually
between 2006 and 2009 to an average of 4 annually between 2010 and
2014, as a result of their increased workload.
Moreover, ODI does not verify that manufacturers' early warning
reporting data are complete and accurate. Although ODI has the
authority to inspect manufacturers' records for compliance with early
warning reporting requirements,\13\ NHTSA officials told us the Agency
has never used this authority. In addition, the ODI has no processes in
place for systematically assessing the quality of early warning
reporting data or internal guidance on using oversight tools to enforce
data reporting requirements. The Agency also has not established best
practices for providing early warning reporting data and does not
periodically review manufacturers' early warning reporting procedures.
Instead, the Director of ODI told us ODI relies on the ``honor
system.'' However, according to ODI staff, manufacturers routinely
miscategorize safety incidents. For example, staff told us that some
manufacturers avoid using the word ``fire'' in non-dealer field reports
and instead use phrases such as ``strange odor'' to avoid categorizing
an incident as fire-related. Miscategorizations such as these
compromise ODI's efforts to quickly identify potential safety defect
trends.
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\13\ Title 49 United States Code (U.S.C.) Section 30166 establishes
NHTSA's subpoena power and its authority to inspect manufacturers'
records and require recordkeeping to assess compliance with early
warning reporting requirements.
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Yet even in cases where ODI suspects noncompliance, it has not
taken prompt enforcement action. For example:
ODI officials told us they were aware that a vehicle
manufacturer was ``conservative'' in reporting early warning
reporting data. According to a November 2014 audit prepared for
the manufacturer, two ODI employees called the manufacturer's
officials in late 2011 or early 2012 to ask about
inconsistencies between previously reported early warning
reporting data and reported death and injury incidents
pertaining to an air bag recall.\14\ However, ODI took no
enforcement action to address this issue until the manufacturer
self-reported the omission of about 1,700 death and injury
claims in October 2014. NHTSA subsequently required the
manufacturer to describe its procedures for complying with
early warning reporting requirements and provide the Agency
with supporting documentation for all third-party audits of its
reporting.
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\14\ The manufacturer officials did not follow up with ODI to
provide a full explanation of the inconsistencies.
In November 2004, ODI discovered that a major recreational
vehicle manufacturer did not report required death and injury
data and other early warning reporting data. However, ODI did
not take action until nearly a decade later, when the office
opened an investigation into the manufacturer's reporting
following a suspected recall noncompliance issue. During the
investigation, the manufacturer stated that it failed to report
the early warning reporting data because of internal
miscommunications and a software failure.
ODI Does Not Provide Sufficient Guidance to Consumers on the Type of
Information To Include When Submitting Complaints
ODI relies primarily on consumer complaints--most of which are
submitted through NHTSA's safercar.gov Website--to identify potential
safety defects. The online complaint form requires consumers to select
up to 3 affected parts from a drop-down list of 18 options, such as air
bags and electronic stability control. Additionally, the Website
provides a text field for consumers to describe the incidents
underlying their complaints.
ODI's initial screener estimates that 50 to 75 percent of
complaints incorrectly identify the affected parts, and roughly 25
percent do not provide adequate information to determine the existence
of safety concerns. These data quality issues occur in part because ODI
does not provide consumers with detailed guidance on submitting
complaints. For example, safercar.gov does not define the 18 affected
parts categories--some of which may be unfamiliar to consumers, such as
``adaptive equipment.'' Furthermore, safercar.gov does not allow
consumers to submit, or encourage them to retain, supporting
documentation (such as photographs or police reports), which ODI's
screeners and management have indicated are valuable in identifying
potential safety concerns. In contrast, the U.S. Consumer Product
Safety Commission's complaint Website (saferproducts.gov) allows
consumers to upload as many as 25 documents or photos related to their
complaints.
ODI Received Early Warning and Consumer Complaint Data Related to GM's
Ignition Switch Defect
From 2003 through 2013, GM submitted about 15,600 non-dealer field
reports and about 2,000 death and injury reports on vehicles subject to
the ignition switch recall. A 2011 ODI analysis of early warning
reports for 22 vehicles with potential air bag issues ranked the 2005
to 2010 Chevrolet Cobalt models fourth for fatal incidents and second
for injury incidents involving air bags.\15\
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\15\ In addition to the Cobalt, ODI analyzed consumer complaints
and death and injury data categorized as air bag-related for 21 other
passenger vehicles from GM and other manufacturers.
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However, GM's categorization of early warning reporting data
related to the faulty ignition switch may have masked potential trends.
Specifically, GM assigned different codes to non-dealer field reports
describing ignition switch problems. For example, GM assigned the
``Engine and Engine Cooling'' code to a non-dealer field report on a
2005 Chevrolet Cobalt that concluded a minor impact to the ignition key
could easily cause the engine to shut off. In another case, GM assigned
the ``Electrical'' code to a non-dealer field report on a 2006 Pontiac
Solstice that described the vehicle ignition system turning off several
times while driving when his knee hit the key ring.
Moreover, underlying documentation did not support GM's
categorization of the early warning reporting data. NHTSA regulations
require manufacturers to identify each vehicle system or component that
allegedly contributed to incidents related to death and injury claims
and notices.\16\ Documentation underlying a death and injury report
related to a fatal accident involving a 2005 Chevrolet Cobalt included
a Wisconsin State trooper's report indicating that the ignition switch
and air bags were both involved in the accident. However, GM
categorized the death and injury report as not involving any of the
systems, components, or conditions defined in regulations.
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\16\ 49 CFR Sec. Sec. 579.21(b)(1)-(2).
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Some consumer complaints were also miscategorized or lacked
sufficient detail to link them to the ignition switch defect.\17\ For
example:
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\17\ From January 1, 2003, through February 7, 2014, ODI received
9,266 complaints involving the vehicles subject to the GM ignition
switch recall--including 72 complaints indicating at least 1 injury and
3 complaints indicating at least 1 fatality. The majority of these
complaints involved the 2005 to 2010 Chevrolet Cobalt and the 2003 to
2007 Saturn Ion.
ODI contractors used the codes ``Unknown or Other'' and
``Exterior Lighting: Headlights: Switch'' when entering a
September 2003 complaint into Artemis--ODI's primary database
for storing data used to identify and address potential safety
defects. However, the complaint described engine shutoffs in a
2003 Saturn Ion when the driver's knee accidently hit the car
keys, so the incident that should have been coded as
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``Electrical Systems: Ignition: Switch''
A June 2005 complaint related to an accident involving a
2005 Chevrolet Cobalt did not specify whether the accident
occurred on or off the road, or whether the impact was to the
front, side, or back of the vehicle--essential details to ODI's
analysis of air bag non-deployment in these vehicles. Instead,
the complaint only stated that an accident had destroyed the
vehicle and injured one person and that the air bags did not
deploy.
Weak Data Analyses and Reviews Undermine ODI'S Efforts to Identify
Vehicle Defects
ODI does not follow standard statistical practices when analyzing
early warning reporting data, conduct thorough reviews of consumer
complaints, or provide adequate supervision or training for staff
responsible for reviewing these data and complaints. As a result, it
cannot reliably identify the most statistically significant safety
issues to pursue. In the case of GM, ODI missed multiple opportunities
to link the ignition switch defect to air bag non-deployments because
ODI staff lacked technical expertise and did not consider all available
information.
ODI Does Not Follow Standard Statistical Practice When Analyzing Early
Warning Reporting Data
ODI uses four statistical tests to analyze aggregate early warning
reporting data (such as consumer complaints, warranty claims, and
property damage claims)--as well as a fifth test to analyze non-dealer
field reports (see table 2).
Table 2.--ODI's Statistical Tests for Analyzing Early Warning Reporting
Data
------------------------------------------------------------------------
Statistical test Description
------------------------------------------------------------------------
Crow-AMSAA Trend analysis used to analyze aggregate data
------------------------------------------------------------------------
Mahalanobis distance Test used to analyze aggregate data
------------------------------------------------------------------------
Probability measure Test used to analyze aggregate data
------------------------------------------------------------------------
Logistic regression Regression test used to analyze death and
injury aggregate data
------------------------------------------------------------------------
CRM-114 Filter used to analyze non-dealer field
reports
------------------------------------------------------------------------
Source: OIG analysis
While the statistical experts we consulted \18\ note that
conducting multiple tests provides a sound basis for analysis, ODI does
not follow standard statistical practices when implementing tests of
aggregate data. Specifically, ODI does not consistently identify a
model (a set of assumptions) for the aggregate data to establish a base
case--that is, what the test results would be in the absence of safety
defects. Without a base case, ODI cannot differentiate outliers that
represent random variation from trends that are statistically
significant and indicate a safety issue should be pursued.
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\18\ The statistical experts we consulted with are from academia
and research institutes.
---------------------------------------------------------------------------
ODI has missed opportunities to update and improve its statistical
methods for analyzing early warning reporting data. For example:
ODI does not regularly assess the performance of its
aggregate data tests. According to the statistical experts,
out-of-sample testing--a standard statistical assessment
practice--would allow ODI to determine whether potential safety
issues identified in one portion of its aggregate data turn up
in the remaining portion. However, ODI performed out-of-sample
testing on only one aggregate data test and only when the test
was first implemented. ODI also conducted out-of-sample tests
on non-dealer field reports, but it has not done so since 2009.
Despite recent developments in data analytics, ODI has not
updated its statistical tests from initial implementation in
2006 through 2009, so it has not taken advantage of recent
methodological advances. Although ODI has periodically
recalibrated some of its tests using current data, it has not
updated the analytical methodologies it uses.
Volpe conducted the only external review of ODI's aggregate
data tests since their implementation. According to its January
2008 report, Volpe reported that the review's scope was limited
because of concerns about the informational burden on ODI and
manufacturers. As a result, Volpe was unable to reach any
conclusions about the tests' effectiveness. ODI has not
requested any other external reviews of its statistical tests.
ODI similarly lacks procedures to promote timely screening of early
warning reporting data. For example, ODI's Early Warning Division staff
review non-dealer field reports based on the results they receive from
a statistical test; however, there is no process for ensuring that all
non-dealer field reports are included in the universe from which the
sample is drawn. ODI has overlooked non-dealer field reports for months
or even years if, for example, manufacturers submit the reports in
formats that ODI's statistical test cannot process.
In addition, advanced screeners, who are responsible for proposing
safety defect investigations, told us that they are less likely to rely
on early warning reporting data because of the data's lack of
timeliness. The information in early warning reporting data can be
delayed by months because manufacturers submit the reports quarterly.
ODI Does Not Thoroughly Screen Consumer Complaints
In 2014, ODI received nearly 78,000 consumer complaints--or roughly
330 complaints each day. Despite the volume of complaints, ODI's two-
tiered screening process leaves the office vulnerable to a single point
of failure and the risk that complaints with potential safety
significance may not be selected for further review.
Currently, one employee reviews all submitted consumer complaints,
determines which complaints have potential safety implications, and
forwards those complaints to eight advanced screeners who perform more
in-depth reviews. Determinations of whether complaints warrant further
review are made within a matter of seconds--in part because the initial
screener spends roughly half of the day carrying out other work
responsibilities. According to the initial screener and our independent
verification, about 10 percent of complaints are forwarded to advanced
screeners for in-depth reviews,\19\ leaving no assurance that the
remaining 90 percent of complaints receive additional review. ODI
recently completed a workforce assessment to determine the number of
staff required to meet ODI's objectives and determine the most
effective mix of skill sets, a recommendation we made in 2011.
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\19\ We independently verified that, in 1 week of review, the
initial screener forwarded about 10 percent of complaints to advanced
screeners.
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ODI also lacks formal guidance for screening complaints. The
initial screener relies on professional experience and judgment, as
well as informal guidance and precedent to determine which complaints
to forward to the advanced screeners. He noted that some complaint
categories automatically warrant further analysis--including most air
bag non-deployments and seatbelt issues--and that he prioritizes
incidents that occur suddenly, with little warning for the consumer. He
also noted that he assigns lower priority to engine, transmission, and
vehicle body issues and generally does not forward certain incidents
that most likely do not lead to investigations, such as sharp door
edges. The initial screener does not forward complaints he believes are
covered by existing recalls.
Like the initial screener, ODI's eight advanced screeners have
access to a variety of data sources--such as technical service
bulletins and special crash investigation reports--and have the
authority to reach out to consumers and perform field inspections to
augment their research. However, three advanced screeners said they
rely mainly on consumer complaints to identify safety concerns, and
four advanced screeners said they only occasionally use other sources
of data. While screeners are encouraged to query all complaints for
issues in their areas of concentration, four screeners told us they do
not consistently do this--in some cases because it takes too much time.
Advanced screeners also have access to early warning reporting data;
however, four advanced screeners told us that they are less likely to
rely on these data because they are untimely. Two screeners were also
concerned about the early warning reporting data's lack of usefulness
because they felt the data provided no significant additional detail.
In 2013, ODI began requiring advanced screeners to annotate the
complaints they review by documenting the condition that led to the
incident and their reasons for deciding not to pursue potential issues.
According to the Defects Assessment Division Chief, the annotations are
intended to identify and correct inconsistencies and inaccuracies in
complaints--and thereby enable ODI to properly link them to relevant
safety concerns--and provide a record of review. However, an ODI
internal audit found that roughly half the complaints were incorrectly
annotated or lacked critical information. Additionally, we analyzed
annotations for complaints received in the fourth quarter of 2013 and
found that about 57 percent of the complaints that screeners determined
did not warrant further review lacked justifications. Advanced
screeners told us that annotating complaints is time consuming.
ODI's Pre-Investigation Staff Lack the Training and Supervision to
Effectively
Analyze Vehicle Safety Data
NHTSA has not adequately prepared ODI staff who review early
warning reporting data and consumer complaints to carry out their
responsibilities. For example:
ODI staff charged with interpreting statistical test results
for early warning reporting data told us they have no training
or background in statistics.
Three screeners assigned to analyze air bag incidents lacked
training in air bags. One screener who was originally hired to
review child seat restraint issues was assigned in 2008 to
review air bag issues--without any air bag training and without
an engineering or automotive background.
Screeners told us that training to maintain professional
certifications--such as the Automotive Service Excellence
certification for automotive mechanics--must be completed on
their own time and generally at their own expense.
Screeners also noted that ODI lacked the funding to allow
them to attend training to stay abreast of the latest
developments in vehicle technology.
In addition, ODI has not established an adequate supervisory review
process to evaluate the quality of screeners' work in identifying
potential safety issues. For example, the Defects Assessment Division
Chief characterized his oversight of the initial complaint screener's
work as ``minimal'' and acknowledged that he does not provide much
guidance to the initial screener. Advanced screeners agreed that
supervisory review is often informal and that the Defects Assessment
Division Chief does not regularly review their complaint annotations.
In addition, ODI staff told us that their data analysis and screening
efforts were generally not reviewed and that they received little
feedback on the quality of their work.
Inadequate training and supervisory review have led to deficient
analyses of early warning reporting and complaint data. For example,
the developer of one statistical test that ODI uses to analyze early
warning reporting data stated that the test should produce the same
results every time for the same data input in the same order. However,
ODI staff told us that different test runs produce different results,
and management has not considered this to be a problem.
ODI Staff Overlooked Documentation Pointing to the GM Ignition Switch
Defect
In their reviews of non-dealer field reports and death and injury
and special crash investigation reports, ODI staff missed opportunities
to connect the GM ignition switch defect to air bag non-deployments.
For example, ODI employees overlooked documentation on a fatal accident
involving a 2005 Chevrolet Cobalt that linked the ignition switch
defect to the vehicle's air bag non-deployment:
A Wisconsin State Trooper's report that identified the
ignition switch defect as a possible cause of air bag non-
deployment during the accident.
Event data recorder data \20\ that showed the vehicle's
power mode status had been in the ``accessory'' position during
the accident--a key indicator of the ignition switch defect.
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\20\ An event data recorder is a device installed in a vehicle to
record technical vehicle and occupant information for a brief period of
time (seconds, not minutes) before, during, and after a crash.
A NHTSA special crash investigation report that concluded
the vehicle's air bags failed to deploy possibly due to ``power
loss due to movement of the ignition switch just prior to the
---------------------------------------------------------------------------
impact.''
Between the second quarter of 2012 and the fourth quarter of 2013,
ODI received 13 non-dealer field reports on the 2005 to 2010 Chevrolet
Cobalts that GM categorized as air bag-related and that we determined
may be related to the ignition switch defect.\21\ However, ODI staff
reviewed only one of these non-dealer field reports before the February
2014 recall. According to ODI staff, they did not review the majority
of these reports because in the second quarter of 2012, GM began using
a new file format for most of their document submissions, which could
not be read by the statistical test ODI uses to analyze these reports.
ODI staff acknowledged that they did not notice the reports were not
analyzed until after the recall.
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\21\ To determine which non-dealer field reports were related to
the ignition switch recall, we limited this analysis to vehicle models,
model years, facts, and circumstances that would make an incident
eligible for compensation through the GM ignition switch compensation
fund.
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ODI also received 9,266 consumer complaints between January 1,
2003, and February 7, 2014, that involved GM vehicles subject to the
ignition switch recall. Because ODI's screeners were not required to
annotate their reviews of complaints until 2013, ODI cannot establish a
full picture of why it did not investigate complaints related to the GM
ignition switch and air bag non-deployment issues prior to 2013. From
the time that the annotations were required to the date of the recall,
ODI received 926 consumer complaints involving the recalled vehicles.
ODI's initial screener advanced 27--or 3 percent--of these complaints
for further review, compared to the average of 10 percent that are
typically forwarded. ODI's advanced screeners noted in their
annotations that 11 of the 27 complaints included allegations of front
air bag non-deployment, but they did not advance these complaints for
further consideration because they concluded there was either ``no
actionable trend indicated'' or ``minimal hazard.'' ODI staff did not
thoroughly understand when air bags were supposed to deploy in these
vehicles, which prevented them from linking the ignition switch defect
to the air bag non-deployment. This may be explained by ODI staff's
acknowledged lack of training on air bags.
ODI prepared three proposals for investigating the loss of power
steering and air bag non-deployment in the Chevrolet Cobalt and Saturn
Ion. While each proposal was supported by early warning reporting
referrals, ODI staff did not establish the ignition switch defect as a
potential root cause for these issues. ODI officials told us that they
did not understand the safety consequences of the ignition switch
defect before the GM recall.
ODI Initiates Investigations Without Assurance That the Most
Significant Safety Defects are Targeted
ODI's decisions on whether to open an investigation are not backed
by guidance for applying the factors it established for opening an
investigation. In addition, decisions lack transparency and
accountability. This was the case with ODI's decision not to
investigate the GM air bag non-deployment defect.
ODI Lacks Consensus and Detailed Guidance on the Amount and Type of
Information Needed To Open Investigations
According to ODI's Defects Assessment Division Chief, ODI considers
three factors when proposing a vehicle safety defect investigation: (1)
rate of consumer complaints,\22\ (2) severity of the potential safety
issue, and (3) identification of a potentially defective vehicle
component or root cause. However, ODI has not developed specific
guidance on how screeners should apply these factors, and there is a
lack of consensus among ODI leadership on the factors necessary to open
an investigation--leaving screeners uncertain about how much support is
needed to propose an investigation.
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\22\ The rate of complaints is the number of relevant complaints
received by NHTSA divided by the number of vehicles in production.
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Attorneys in NHTSA's Office of Chief Counsel state that while NHTSA
must establish severity for all cases, it can establish either
frequency or root cause to force a manufacturer to initiate a recall.
The Director of ODI prefers screeners to focus on establishing the
safety consequences of a potential defect rather than determining root
cause, and ODI's two investigative chiefs agree that establishing a
pattern of safety concerns is more important than identifying root
cause. However, ODI's Defects Assessment Division Chief expects
advanced screeners to find the root cause in order to build a
compelling proposal for an investigation.
The Director of ODI can also unilaterally decide not to open an
investigation after discussion with Defects Assessment Panel
participants. For example, the Director of ODI decided not to pursue
two investigative proposals after concluding that they presented
minimal hazards. The first proposal, made in June 2014, related to 2007
to 2011 vehicles that suddenly lost steering power assist; the second,
made in July 2014, related to 2012 model vehicles that experienced
intermittent loss of electrical power. Both proposals established the
rate of complaints, severity of the issue, and the defective
components.
Without specific guidance on the amount and type of information
needed to launch an investigation, screeners largely rely on precedent
and professional judgment to determine which issues merit
investigation. One screener told us he uses his ``gut feeling'' when
reviewing complaints to gauge the ``appetite'' of the office for
specific issues. Another screener told us he only proposes
investigations that have the greatest chance of being selected to avoid
the extra work of proposing investigations that are ultimately denied.
Three screeners said they are hesitant to propose investigations if
similar proposals have been rejected in the past.
In general, ODI officials prefer to open investigations that are
most likely to result in a manufacturer recall--an assertion echoed by
four of the eight screeners we spoke with. In 2011 and 2012--the most
recent years for which ODI has actionable data--about 70 percent of the
investigations eventually resulted in recalls. According to an ODI
investigative division chief, repeatedly opening investigations that do
not result in a recall could cause ODI to lose credibility with
manufacturers. However, ODI's focus on issues most likely to result in
recalls creates the potential for missed opportunities to investigate
issues that have serious safety implications.
Targeting potential safety defects that most likely lead to recalls
also blurs the line between pre-investigative and investigative duties.
Considerable investigative duties--such as research and engineering
analysis work--are being performed in the pre-investigative phase,
often by screeners who are not adequately trained to perform this work.
In one case, a screener told us he could not detect any exhaust odor in
a vehicle, but subsequent work by investigative staff found that the
carbon monoxide level reached Consumer Product Safety Commission
thresholds for noticeable headache, fatigue, and nausea, and exceeded
Occupational Safety and Health Administration standards if exposure
exceeded 8 hours.
In addition, screeners may not have access to the data needed to
prompt an investigation, such as manufacturer data. While NHTSA's
Office of Chief Counsel stated that ODI may compel information from
manufacturers during the pre-investigative stage, the Defects
Assessment Division Chief told us they generally do not compel this
information without first launching an investigation. Regardless, three
screeners were unaware that their division has the authority to compel
information from manufacturers without launching an investigation.
These added duties not only take time away from the advanced screeners'
primary duty of screening safety data, which can result in backlogs of
those data, but can cause potential safety defects to be overlooked.
ODI's Investigation Decision Process Lacks Transparency and
Accountability
ODI's investigation decision process involves several steps. First,
the Defects Assessment Chief provides a list of proposals to ODI's
investigative division chiefs--along with supporting documentation,
such as consumer complaints and warranty claims. The division chiefs
then review the proposals and decide whether to open an investigation,
decline to investigate, or send the proposal to ODI's Defects
Assessment Panel for further review.\23\ According to ODI's written
policy, division chiefs have 2 weeks to complete their review. However,
the investigative division chiefs consider the 2-week requirement to be
a suggested time-frame that should be balanced against other competing
priorities.
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\23\ The Defects Assessment Panel is a body chaired by the Director
of ODI that is intended to meet monthly to review investigation
proposals and decide whether to open an investigation.
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If a proposal is sent to the Defects Assessment Panel,
investigation decisions are frequently delayed. The panel often
reschedules meetings, and according to some screeners, the meetings
tend to be pro forma. For example, one screener stated the meetings
focus on the reasons for not opening an investigation rather than
reasons for opening one. The panel also repeatedly delays decisions on
proposals to obtain additional information. For example:
In August 2014, the panel reviewed a proposal to investigate
a side air bag non-deployment that resulted in a fatality. At
that meeting, the Director of ODI, who sits on the panel,
requested additional information. By October, the manufacturer
had responded to ODI's questions, but an investigative division
chief requested that an investigation not be opened until his
team had completed an on-site inspection of the vehicle
involved in the accident. As of the most recent panel meeting
in February 2015--5 months after the panel first reviewed the
potential defect--a decision to investigate this issue remains
pending.
In January 2014, the panel discussed a proposal on a
vehicle's steering failure. However, the panel has delayed the
decision whether to investigate this issue for over a year--
despite a recommendation from the investigative division to
open an investigation.
In addition to delays, ODI's decisions are not transparent. Of the
56 investigation proposals for light vehicle safety defects in 2013, 32
were not investigated--18 of which lacked documented justifications for
not investigating. While the panel may provide a reason for declining
an investigation, such as ``minimal hazard,'' it does not document the
evidence that supports its decision. In addition, a proposal may be
rejected by investigation divisions, which do not always document
reasons for declining to investigate. Lack of transparency exacerbates
the problems created by reliance on precedent because screeners do not
learn what management deems worthy of investigation.
Transparency and accountability are especially critical since ODI
generally does not revisit proposals once they are declined for
investigation. Screeners told us that there is a need for ever
increasing numbers of incidents to consider reopening previously
rejected investigative proposals. While ODI lists declined proposals in
Artemis as being ``monitored,'' it does not track who monitors these
issues. Half of the advanced screeners consider monitored proposals to
be essentially denied and rarely resubmit proposals unless there is a
new angle or ``smoking gun.'' One screener said resubmitting a proposal
is like ``beating a dead horse.''
ODI Did Not Investigate or Adequately Monitor the GM Air Bag Non-
Deployment or Ignition Switch Issues
At a November 2007 Defects Assessment Panel meeting, ODI management
and staff discussed a proposal to investigate frontal air bag non-
deployments related to the Chevrolet Cobalt and Saturn Ion. ODI
ultimately declined the proposal but did not document its justification
for doing so. According to ODI staff, the decision not to investigate
was based on a flawed understanding of air bag technology.
Specifically, the Defects Assessment Panel believed the air bags did
not deploy because the drivers were not wearing their seatbelts and
because the vehicles left the road during the accidents.\24\ At the
same panel meeting, an ODI air bag investigator advocated against
opening an investigation because he had concluded, based on his
analysis of complaints, that the rate of air bag non-deployment
complaints for the Cobalt and Ion was similar to that of peer vehicles.
---------------------------------------------------------------------------
\24\ According to GM, frontal air bag deployment takes into
consideration factors such as speed of the vehicle, severity and
location of the impact, and rate of deceleration. Air bags are
programmed not to deploy in non-accident circumstances, such as driving
over potholes or rough terrain.
---------------------------------------------------------------------------
According to ODI staff who attended the 2007 panel meeting, the
Defects Assessment Panel had requested that the potential safety defect
be monitored to identify future air bag non-deployments occurring on
the road, where air bag deployment would be expected. In addition,
NHTSA's Associate Administrator for Enforcement, who did not attend the
panel discussion, told the Director of ODI and the Defects Assessment
Division Chief that ``given the reports of fatal crashes, this
[investigation proposal] looks like one we want to jump on and
learn as much as we can quickly.'' The ODI screener who prepared the
investigation proposal was initially assigned to monitor the issue.
However, the Defects Assessment Division Chief did not reassign that
responsibility after the screener responsible for monitoring the issue
left NHTSA in 2008.
ODI missed other opportunities to investigate the air bag non-
deployment issue. For example, in April 2009, the Defects Assessment
Division Chief requested a special crash investigation of a collision
involving air bag non-deployment in a 2005 Chevrolet Cobalt. However,
ODI did not follow up on the investigation's results, and the Defects
Assessment Division Chief had no explanation for why ODI did not pursue
the issue. Two ODI staff members reviewed the findings of the special
crash investigation in February 2010, but neither reported the results
of their reviews. The first, an investigator, told us he did not report
the results because he was not responsible for screening safety issues.
The second, an advanced screener, told us that while he does not recall
reviewing the report, he would only have noted issues in his area of
concentration: engine, power train, and speed control.
According to ODI officials, in 2010, an ODI screener suggested
revisiting the 2007 investigation proposal on air bag non-deployments
in the Chevrolet Cobalt because of new consumer complaints. However,
after the air bag investigator updated his analysis of consumer
complaints and identified a downward rate of complaints for the
vehicles, the screener decided that the issue did not present enough of
a safety trend to warrant renewing the investigation proposal.
While ODI identified air bag non-deployments as a potential safety
issue, it did not identify or propose an investigation of the GM
ignition switch issue. According to ODI staff, there were no
discussions of the ignition switch defect prior to the February 2014
recall.
This concludes my prepared statement. I will be happy to answer any
questions you and other Committee Members may have for me.
The Chairman. Thank you, Mr. Scovel.
Administrator Rosekind, I know you only took the helm here
at NHTSA at the end of last year, and I know you have been
working to improve NHTSA's handling of vehicle defects. And I
would say you have your work cut out for you.
The Inspector General's report reaches some serious
conclusions regarding NHTSA's ability to detect vehicle
defects, highlighting things like failure to review information
provided by both industry and consumers, botched data analysis,
inadequate training and supervision as major problems for the
agency. All of these have to concern you.
And while we have to ensure that automakers properly report
safety violations, it doesn't help if NHTSA's staff are not
even reviewing the information or if, when they do, they aren't
employing proper statistical analyses to detect defects.
NHTSA isn't following basic best practices, and these are
process issues that can't be solved just by throwing additional
resources at the problem. So my question is, how do you propose
to address these issues?
Mr. Rosekind. Thank you for acknowledging the challenges
that exist in our head.
We have concurred with all 17 of the recommendations. They
validate and are consistent with our two reports, as well.
So I would like to provide to the Committee a list of 44
actions that we already have underway. Ten of the 17 are
addressed in those. And they get exactly to detailed action on
each of these elements, from communication to case management
to statistical tests, to make sure that every one of those--and
I am just highlighting.
There were 17 in their report. Our total actions are
already up at 44. We will continue to look for every place
possible that we can make changes.
I will just add, I think we will look for all the internal
changes we can, but what is also critical about the report,
though it is outside their report to talk about the resources,
so many people have heard me discuss: 80,000 complaints. We are
literally looking at an individual screener having to have five
reports analyzed every hour. Each of those reports actually
takes an hour.
So when the IG report says it is inadequate, I agree. And
we have to change those.
The Chairman. Inspector General Scovel, you identified
three general areas of concern in your audit of the pre-
investigation practices of NHTSA's Office of Defects
Investigations. In your opinion, what does NHTSA need most?
More information? More expertise? Better practices for
reviewing and analyzing data they already receive?
Mr. Scovel. Thank you, Mr. Chairman.
Right now, I would say the onus is on NHTSA to press
forward with the process changes that we have outlined in our
audit report and in my testimony today.
We are very pleased to understand that the Administrator
has concurred in all 17 of our recommendations and, in fact, in
his response to our audit report last week, indicated a very
aggressive schedule, signaling his intent to press forward as
quickly as possible.
I understand the Administrator's request for resources.
That ultimately represents a policy decision between the
administration and the Congress. I am fully cognizant of that
and respect my role. However, I would have to say that
allocating more resources to an effort or to an agency whose
processes are not in line in the first place does not seem like
a good idea.
We would urge the Administrator to press forward with his
aggressive timeline to address our recommendations, as well as
his own process improvements that he has identified, in order
to best position himself for success no matter what the policy
decision may be regarding additional resources.
The Chairman. Mr. Rosekind, you have recently taken some
unprecedented steps with regard to NHTSA's handling of the
defective Takata inflators, including issuing a preservation
order and a consent order and announcing efforts to facilitate
a coordinated remedy program.
How does the agency plan to implement this program?
Mr. Rosekind. And thank you for acknowledging the effort
there. It was this committee that really helped focus for the
entire country and the needed actions ahead. That all changed
on May 19. We went from denying a defect to having
acknowledgment of not only a defect but national recalls, the
consent order, which allows us to actually help evaluate the
remedy, as well as the coordinate remedy program, which is not
just acceleration but even more advanced prioritization.
So, right now, we have actually already been in touch with
all 11 manufacturers, 7 potential supply folks, and have sent
them a letter that outlines all the information we need to
determine how this has to proceed. So the first meetings are
already scheduled for July 1 with each of those individual
groups. There will be both individual and group meetings
through July, with our hope that August will be--we will take
all that information, put it together. Planning for a public
hearing in September that would allow us to lay out the
program, which is very complicated.
The Chairman. Good.
And, very quickly, Mr. Scovel, could you just please
discuss some of the difficulties that NHTSA has encountered or
experienced in receiving consumer complaints? And how would
clearer guidelines benefit the public?
Mr. Scovel. In receiving complaints, Mr. Chairman, we would
highlight a couple of things for the Committee's attention.
First, in the way that NHTSA collects its data. Data
quality has to be an ultimate concern for NHTSA in its effort
to identify vehicle safety defects, because if that data is not
of the highest quality, then essentially defects will be missed
and resources may be squandered. So the accuracy and the
completeness and the timeliness of those data submissions is
essential.
And that data comes from a number of different sources. The
early warning reporting data from the manufacturer, that
process needs to be improved. As we have shown and NHTSA has
acknowledged, the broad discretion allowed to manufacturers in
categorizing potential problems or defects means that the data
quality is diluted, it is diffuse. And the best analysts at
NHTSA or anywhere in the world will not be able to reach a
proper conclusion based on data that is unsupportable.
We also would note that--and I commend the Administrator
for his attention to that and his remarks this morning, too,
that they intend to follow up with manufacturers more often.
In our interviews of every single employee in the Office of
Defects Investigation and a representative of each of the
contractors that works in that effort, we learned from the
highest sources in that office that they generally employ what
he called an honor system in order to determine whether
manufacturers are meeting their requirements to submit this
early warning reporting data. For a safety regulator to take
that approach, sir, we think is not keeping the best safety
interests of the public in mind.
Consumer complaints, Mr. Chairman, which historically has
been the primary source for NHTSA to identify safety concerns,
are also diffuse, have also been watered down, in effect,
because of a lack of guidance from the agency to consumers who
are seeking to report accidents and defects to the agency but
who find themselves at a loss when confronting on the website
18 different category codes in a vehicle that has 15,000
components and they themselves are not automotive experts.
Certainly, some consumers are going to get it wrong. But,
in many others, the most well-meaning and those who have
themselves or their families have been impacted by vehicle
safety defects will read the guidance and attempt to follow it
as best they are able. The agency performance will improve as a
result.
The Chairman. Thank you, Mr. Scovel.
Senator Nelson?
Senator Nelson. You know, there is a pattern here among
these regulatory agencies that are supposed to be looking out
for the consumer. We saw this about 10 years ago with the
Consumer Product Safety Commission when we had all of that
Chinese drywall problem, the defective Chinese toys, and so
forth, and a card table was their research department. So, too,
we are now hearing stuff about the agency that you are trying
to straighten out, Mr. Rosekind.
Tell me, you all came up with 33.8 million vehicles to be
recalled on this Takata matter. How did you come up with that
number?
Mr. Rosekind. So our estimate is that there are about 34
million inflators that are defective, and they are in about 32
million vehicles. So that is acknowledgment that some vehicles
have both driver and passenger airbags that need to be
replaced. It also includes that some cars have interim
remedies. They need to come back again.
Senator Nelson. Right.
Mr. Rosekind. So that is why 34 million inflators in 32
million vehicles.
Senator Nelson. Do you have the Vehicle Identification
Number for all of those?
Mr. Rosekind. Yes. Those have been provided by all of the
11 auto manufacturers at this point.
Senator Nelson. All right.
Now, you have heard what the Inspector General said about
this Office of Defect Investigations. What do you think you
need to do to ensure that ODI does not miss the next GM
ignition defect or the next Takata airbag crisis?
Mr. Rosekind. This is why we have fully concurred with all
17 recommendations. They all need to be addressed. That is why
I am going to submit to you our list of 44 total actions that
are going on that really get to all of these processes that we
are discussing.
But it is also an ongoing evaluation. That is part of the
issue here. We can't stop looking. So I am going to give you 44
different areas. I can give you plenty of examples if you want.
I would rather just give you the list for the moment. But part
of it also has to be not just that list but an ongoing
evaluation to make sure that on a continual basis we are
looking for ways that we can improve the processes and do it
faster and better.
Senator Nelson. OK.
I want to suggest to you one area. In this ODI, as the
Inspector General has just talked about, get about 80,000
complaints each year. Yet there is one person who conducts the
first review of these complaints. And this particular person
has other duties, so spending 50 percent of that person's time
doing other things.
So, if you do the math, that person, who spends 4 hours a
day on this, would have to review, process, and follow on and
flag over 80 complaints an hour. That is less than one
complaint a minute. So how in the world can you get it done?
Mr. Rosekind. You can't. And that is why I agree with the
IG's report. It specifically called out the scanning of those
reports as being inadequate. It is.
And you have just pointed out that that is a resource
issue. You have too many complaints and not enough people.
That original person is a triage point to try and get it
somewhere else, but it is just overwhelming.
Senator Nelson. All right.
I am going to yield the rest of our time because I want our
members to go on and get a chance to get into this.
The Chairman. Thank you, Senator Nelson.
Senator McCaskill is up next.
STATEMENT OF HON. CLAIRE McCASKILL,
U.S. SENATOR FROM MISSOURI
Senator McCaskill. Thank you. Thank you, Mr. Chairman, and
thank you, Senator Nelson, for your incredible focus on this
issue.
As the Chairman and the Ranking know, we obviously did a
lot of hearings around the GM recall and a lot of hearings
around the failures of NHTSA.
I want to first begin with rental car safety. Honda
confirmed on Friday that the eighth death linked to a faulty
airbag occurred last September in California. This was a rental
car from Sunset Car Rental in San Diego that never made the
repairs after the recall.
I, along with Senator Schumer and others, have legislation
pending that would prohibit a car from being rented at a rental
car agency until open safety recalls are in fact remedied. We
have the support of the rental car industry, the consumer and
safety advocates, the insurance companies, and General Motors.
But, unfortunately, many auto manufacturers are blocking
this legislation right now. The Alliance of Automobile
Manufacturers has opposed this legislation, and they are saying
that they should only be grounded if there is a do-not-drive
recall.
Let me ask you, Dr. Rosekind, have any of the 11
manufacturers issued a do-not-drive recall related to the
faulty airbags?
Mr. Rosekind. Not that I am aware of. And, annually, that
number is very small.
Senator McCaskill. And what about NHTSA? Do you support the
efforts that we have ongoing to try to ground rental cars that
have not been repaired?
Mr. Rosekind. Absolutely.
Senator McCaskill. OK.
I would like to put into the record the American Car Rental
Association and Consumers for Auto Reliability and Safety,
their written statements for the record, if I might, on that
subject.
The Chairman. Without objection.
[The information referred to follows:]
Written Statement of the American Car Rental Association and Consumer
for Auto Reliability and Safety
Introduction
Good morning, Chairman Thune, Ranking Member Nelson and Members of
the Committee on Commerce, Science, and Transportation. The American
Car Rental Association (ACRA) and Consumers for Auto Reliability and
Safety (CARS) respectfully submit this joint written statement as part
of the Committee's hearing entitled ``Update on the Recalls of
Defective Takata Air Bags and NHTSA's Vehicle Safety Efforts.'' ACRA
and CARS ask that this statement be made a part of the official record
of the hearing.
ACRA is the national representative for over 98 percent of our
Nation's car rental industry. ACRA's membership is comprised of more
than 300 car rental companies, including all of the brands you would
recognize such as Alamo, Avis, Budget, Dollar, Enterprise, Hertz,
National and Thrifty. ACRA also has as members many mid-size, regional
car rental companies as well as smaller, ``Mom & Pop'' operators. ACRA
members have over two million registered vehicles in service, with
fleets ranging in size from one million cars to ten cars.
CARS, based in Sacramento, California, is a national award-winning
non-profit auto safety and consumer advocacy organization dedicated to
preventing motor vehicle-related injuries, fatalities and economic
losses. CARS has spearheaded promulgation of several Federal motor
vehicle safety standards, and successfully advocated for numerous
landmark bills signed into law by Governors from both major parties.
CARS has been working to enact safe rental car legislation in close
collaboration with Cally Houck, whose two daughters were killed in a
crash caused by a safety defect in an unrepaired rental vehicle that
was under a safety recall.
ACRA and CARS applaud this Committee for its continued interest in
the Takata air bag and other recent automobile recalls. We have come
together in an unusual partnership of an industry trade group and a
consumer safety organization to urge Congress to pass the ``Raechel and
Jacqueline Houck Safe Rental Car Act,'' which was recently introduced
as bipartisan legislation in the House and Senate and has been referred
to this Committee. We believe that passing this bipartisan bill is one
important step that Congress can and should take immediately to help
get unsafe recalled vehicles off the roads.
The Car Rental Industry and Consumer Safety
In 2004, Raechel and Jacqueline Houck were killed by a rental car
that had been recalled due to a defective steering component that was
prone to causing an under-hood fire and a loss of steering. The car had
been rented to them prior to being repaired. The legislation named in
their memory, the ``Raechel and Jacqueline Houck Safe Rental Car Act''
(S. 1173/H.R. 2198), was introduced in the House and the Senate on May
1, 2015. The Senate bill is authored by Senators Charles Schumer (D-NY)
and Barbara Boxer (D-CA), and co-sponsored by Commerce Committee
Ranking Member Nelson (D-FL) and by Committee members Senators Claire
McCaskill (D-MO) and Richard Blumenthal (D-CT). The House bill is
sponsored by Representatives. Lois Capps (D-CA), Walter Jones (R-NC),
G.K. Butterfield (D-NC) and Jan Schakowsky (D-IL).
The Safe Rental Car Act would prohibit rental companies from
renting or selling cars subject to a Federal safety recall unless they
have been repaired. The only exception to this rule would be if the
manufacturer identified an interim measure that could be taken while
the permanent repair was being developed that would eliminate the risk.
Once the permanent repair becomes available, however, the car must be
grounded until the repair is made.
ACRA and CARS worked very hard to develop a legislative proposal
that is supported by consumer safety organizations and the rental car
industry. The bill fairly balances the public's interest in safety with
the rental car industry's business model. It represents a reasoned,
rational compromise that is effective, and also workable, given the
realities of the auto rental marketplace.
From the industry's point of view, properly maintained vehicles in
the rental industry are paramount. It's about trust--between customers
and the individual businesses of ACRA members. Customers should have
confidence that their rental is not the subject of a safety recall and
the legislation provides that confidence.
From a consumer safety point of view, it is just common sense that
rental cars subject to safety recalls should be repaired before they
are put into the hands of consumers and their families. People who are
renting vehicles need them right away, for a business trip, vacation or
sometimes in an emergency. There is no time to take a rental car to get
repaired. And consumers expect that the car they are renting is safe.
Most people are shocked to learn that it isn't already illegal, under
Federal law, to rent out an unrepaired recalled vehicle.
Important Safety Provisions of S. 1173/H.R. 2198
Timing of Notice and Grounding
S. 1173/H.R. 2198 define the time-frame in which rental
companies need to ground the vehicles after receiving the
safety recall notice. There is a period of time the companies
need in order to receive the notice and successfully lock down
the appropriate vehicles. The bills call for the vehicles to be
grounded as soon as practicable, or within 24 hours of
receiving the safety recall notice. In the situation of a
particularly large recall--one that affects more than 5,000
vehicles for one company, the lock down time-frame is 48 hours.
Interim Remedy
The only exception under S. 1173/H.R. 2198 to the ``do not
rent'' requirement is when the manufacturer has issued a safety
recall and has not developed the permanent repair, but offers a
temporary fix--or interim remedy--that eliminates the safety
risk. If the rental car company performs the interim remedy,
then the car may continue to be rented. Once the permanent
repair is offered by the manufacturer, the vehicle must be
pulled from service and permanently repaired before being re-
rented.
Car Sales From Rental Fleets
The American car rental industry is the largest single
purchaser of cars from domestic and foreign car manufacturers
every year. The industry, in turn, sells a large number of cars
each year through retail and wholesale channels. S. 1173/H.R.
2198 require that rental car companies permanently repair any
safety recall to any vehicle prior to selling that vehicle--
either through retail or wholesale markets. The only exception
to this requirement is when a vehicle has been so severely
damaged that it will only be sold for parts, the rental company
does not need to perform the recall work.
Federal versus State Role
This is a critical national issue and deserves a national solution.
The motor vehicle safety recall process is overseen by the National
Highway Traffic and Safety Administration (NHTSA) and has its origins
in the Federal Motor Vehicle Safety Act, originally enacted in 1966.
Therefore, ACRA and CARS believe strongly that major changes to rental
vehicle safety recall procedures should be made by Congress, rather
than individual states. Rental cars are an integral part of interstate
commerce and car rental customers cross state borders in rental
vehicles at will and with the blessing of the renting companies.
CARS agreed with the rental car companies to join together in
support of this legislation in order to create a uniform Federal
standard, rather than pursuing legislation on a state-by-state basis.
California Senator Bill Monning, who represents the district where the
tragic crash occurred that claimed the lives of Raechel and Jacqueline
Houck, agreed to forestall pursuit of state legislation he authored
beginning in 2010, in order to allow Congress time to address the
problem nationally.
As attention to vehicle safety recalls remains squarely in the
public spotlight, policy makers at the local, state and Federal level
are understandably eager to address safety concerns. There have been
several initiatives at various levels of government to particularly
address safety recalls concerning the rental industry. No two proposals
are the same. ACRA and CARS believe a patchwork of state and local laws
would be disruptive to consumers and the car rental industry since
rental cars regularly are rented in one state and driven and left in
another. In addition, these state and local proposals create challenges
because each attempts to address a regulatory process that is
controlled and overseen by a Federal agency (NHTSA). ACRA and CARS are
united in our conviction that rental car safety should be addressed on
the Federal level.
Conclusion
As the supporters of S. 1173 and H.R. 2198 continue to talk to
members of Congress and their staff in support of this legislation,
ACRA members are often asked why the car rental industry is willing to
accept new Federal regulation of the industry's practices. The response
to that is easy. After listening to customers, ACRA engaged and became
part of the process. The end result is a proposal that will provide car
rental customers additional assurance that the vehicles they rent are
safe and provides the car rental industry with a uniform Federal
standard across the country.
ACRA and CARS urge Congress to enact this bill, named for Raechel
and Jacqueline. It is beyond your power to bring them back to life, but
the fate of others who rent vehicles to visit their parents, take a
vacation, or go on a business trip--or share the roads with them--rests
squarely in your hands.
As a first step toward enactment, we respectfully request that this
Committee hold a hearing on the Raechel and Jacqueline Houck Safe
Rental Car Act, to hear first-hand from the stakeholders why now is the
time to pass this critical safety legislation.
Thank you for providing ACRA and CARS with the opportunity to
submit this statement.
Senator McCaskill. I now want to go to this audit. And my
colleagues are patient with me because I am an audit weirdo. I
used to be an auditor, so I read this stuff. And Mr. Scovel
knows that I am somebody who consumes these things.
This audit report is one of the worst I have ever seen, in
terms of a government agency. And the reason it is so bad--I
agree, Mr. Scovel, this isn't about resources; this is about
blatant, incompetent mismanagement, Mr. Rosekind.
I mean, let's just go through one of many shortcomings, and
this is one that just jumped out at me: when to open an
investigation. Now, if NHTSA isn't clear about when an
investigation is to be opened, we might as well shut it down.
The Inspector General found there are three factors to be
considered about an investigation: rate of consumer complaints,
severity of potential safety issues, and identification of root
cause.
Now, here is the scary part. Based on the interviews the
Inspector General did, there is disagreement within your agency
over when an investigation can even be opened. The General
Counsel said severity must be established for all cases, along
with frequency and root causes. The ODI Defects Assessment
Division Chief says all three should be met. The ODI's Director
does not think a root cause is necessary and prefers a focus on
safety consequences. And the ODI's two investigative chiefs
agree that a root cause is not necessary.
So you have key personnel within your agency that aren't
even on the same page about when an investigation should occur.
I assume that you are getting busy on this as a baby step
before you get at all the other problems that are in this
problem.
Mr. Rosekind. There are actually 44 distinct actions that
we are taking. That is one of them. Those people are now in the
same room determining what those threshold and criteria should
be.
Senator McCaskill. Do you believe that everyone that works
there knows what their authorities are? Do you believe that
there is a clear understanding about what the investigative
authorities are at NHTSA?
Mr. Rosekind. I think the people that have the specific
authorities assigned to them are aware of those, but you have
just highlighted where those lines have been blurred and
clarifications are needed.
Senator McCaskill. Well, on average, only four times a year
over the past 4 years has ODI even requested underlying
documentation for death and injury reports. Four times a year.
That, to me, is stunning.
And although you have the authority to inspect
manufacturers' records for compliance with early warning
requirements, NHTSA officials told the IG the agency has never
used this authority. Never used the authority to inspect
manufacturers' records for compliance with early warning
requirements.
Listen, I think you are doing your best. I think you
understand the severity of the situation before you. But I was
shocked when I read this IG report how bad it was. I knew it
was bad when the Acting Director before you didn't even know
you had subpoena power. I mean, we discovered that in a
previous hearing.
So we are going to be watching very carefully, Mr.
Rosekind, the kind of work you do immediately.
And I disagree with my colleague; I am not about to give
you more money until I see meaningful progress on reforming the
internal processes in this organization. You can't start
throwing money until you have a system in place that is going
to make this agency function like it is supposed to.
Thank you, Mr. Scovel, for your work. I think it is very
illuminating.
Thank you for working so hard since you have been there. It
is not fair to blame you for all this. I think you are trying
as hard as you can to get the place shaped up, but we have a
long way to go.
And I would certainly hope, Mr. Chairman, that we would do
a follow-up every 4 to 6 months to see how they are doing on
the IG's list. Because I think the driving public deserves so
much better from the cop on the beat.
Thank you, Mr. Chairman.
The Chairman. Yep. Thank you, Senator McCaskill. You bet.
Senator Klobuchar?
STATEMENT OF HON. AMY KLOBUCHAR,
U.S. SENATOR FROM MINNESOTA
Senator Klobuchar. Thank you, Mr. Chairman, for holding
this hearing. I think it is incredibly important that we follow
up and have hearings like this after something major has
happened, like we saw with Takata, with GM.
Last November, after evidence emerged that Takata were
susceptible to ruptures in regions outside of high-humidity
areas, I called on Takata to expand the recall nationally. Last
month, they finally complied and expanded the recall nationwide
for certain types of driver- and passenger-side airbags.
One of the individuals affected by a Takata airbag was
Shashi Chopra from North Oaks, Minnesota. She is now
permanently blind. She was simply a passenger in a car that
wasn't even going very fast that was in what we would consider
a minor fender bender and is now permanently blind.
Mr. Rosekind, what tools does NHTSA need to compel
companies to act sooner?
Mr. Rosekind. Part of what we are looking at, besides
resources related to personnel, are authorities.
So other safety agencies within DOT have imminent hazard.
What does that mean? If a hazard was identified, we would have
been able to take those Takata airbags off the streets much
sooner than what happened in this situation.
So there are a variety of authorities----
Senator Klobuchar. And would that be, then, established by
law? Is that what you are saying you----
Mr. Rosekind. Yes. Those are authorities that you,
Congress, have to provide to the agency.
Senator Klobuchar. And were the daily civil penalties at
NHTSA levied against Takata for failing to fully respond to
NHTSA's special orders helpful in getting them to act?
Mr. Rosekind. Yes. And I think what you are pointing out is
we were able to go to $14,000 a day, which was the maximum, but
on our list of authorities that we are looking for in GROW
AMERICA, that is another one. Our maximum penalty is $35
million. We are looking for $300 million.
Senator Klobuchar. OK. Very good.
Last month, NHTSA filed a Notice of Intent to open a
coordinated remedy program for the replacement of defective
Takata airbag inflators in order to consider whether and, if
so, how NHTSA will exercise its authority to organize and
prioritize the recall and remedy programs.
How is NHTSA approaching the replacement of these airbags
to ensure that vehicles that are most at risk are replaced
first?
Mr. Rosekind. That is why we have just sent out information
letters to all of the 11 manufacturers, the 7 suppliers, and
are collecting information so we can put a plan together to do
just that.
People have talked about an accelerated remedy. This is
more than just making it go faster. It means coordinating and
prioritizing to make sure people in the areas that have been
identified for risk, which have to do with age, certain
geography, driver side--those people need to make sure they are
replaced as soon as possible.
Senator Klobuchar. OK.
Switching to the GM issue, which you are also aware of, we
had a case of Natasha Weigel from Albert Lea, Minnesota, riding
with her two friends in a 2005 Chevy Cobalt on a Wisconsin
country road. Without warning, the car's electrical power went
out. The car barreled ahead at 71 miles per hour. Natasha and
another passenger were killed when it ran into a tree.
The report found that Wisconsin State Trooper, Keith Young,
conducted an investigation into the crash that clearly made
that link--this is a state trooper in Wisconsin--between the
defective ignition switch and the failure of the airbag to
deploy. It cracked the code that evaded GM and NHTSA for years.
This is what he wrote: ``The two front seat airbags did not
deploy. It appears the ignition switch had somehow been turned
from the `run' position to `accessory' prior to the collision
with the trees.''
We know this is all troubling, and in December I asked you
what concrete changes you would implement at NHTSA to improve
the consumer complaint process. I would like to know what
systems NHTSA has put in place to ensure that if the Office of
Defect Investigation investigators are in possession of
critical information, like Trooper Young's report, I would like
some assurance that they are now acting.
Mr. Rosekind. And I am going to actually start, though, by
acknowledging this committee, whether it is your opening
statement mentioning safercar.gov or the fact that each of you
talk about one of the tragedies, you put a face to the
tragedies that are going on, it is so critical for people----
Senator Klobuchar. Thank you.
Mr. Rosekind.--to know that these are real people that are
being affected. So thank you all for doing that.
And I would say specifically, we did talk about this in my
confirmation hearing, and we have new systems that are already
in place, such as a case management system that allows our
crash investigators, as well as the screeners and the panels,
to look at this information from multiple sources all in one
place. It is an attempt to basically connect those dots so the
people who are working on this have all available information.
And I will just----
Senator Klobuchar. Yes. Because I know, like, there were
about 260 complaints over an 11-year period from consumers that
the GM vehicle had turned off while they were driving. And
somehow, over those 11 years, those dots weren't connected.
So, as you said, there has been a change. But how does that
change really work in effect?
Mr. Rosekind. We are talking about panels and screeners
that now have access to all the information. Previously, there
could be an update to a piece of information and the person
responsible for that case didn't even get an alert that there
had been updated information.
So now you have more data and making sure, every time there
is new data, that individual who is responsible gets all the
information in one place.
Senator Klobuchar. OK. Very good.
Well, thank you very much. I will probably have some more
questions for the record.
But thank you, again, Senator Thune and Senator Nelson.
The Chairman. Thank you, Senator Klobuchar.
And next up is the Ranking Member on the Subcommittee on
Consumer Protection, somebody who, like Senator Nelson, has
been very involved on these issues. So I would like to
recognize Senator Blumenthal.
STATEMENT OF HON. RICHARD BLUMENTHAL,
U.S. SENATOR FROM CONNECTICUT
Senator Blumenthal. Thank you very much, Mr. Chairman. I
want to express my appreciation to you for having this hearing
today, which I know reflects your own interest and caring about
this subject.
And to my distinguished colleague from Florida, thank you
for your very eloquent and powerful statement.
I want to pursue some of the lines that have been raised
already, lines of questioning, that reflect the real-life
consequences, as you have just said, Mr. Rosekind.
Just to show you, first, one of the airbags that actually
bears the marks of the, in effect, exploding shreds of metal
that so injured eight people that they were killed and many
others.
But the real fault is not with the airbag. There is no
blood on the airbag. Some may say, legitimately, there is blood
on the hands of Takata executives, who concealed and covered up
the devastating, deadly effects of these explosions.
The fault is really with this device, the inflator, because
it contained a substance that caused this explosion. Ammonium
nitrate, when moistened, became explosive. And the question for
Takata today is whether these devices are any safer than they
were when they killed eight people. And the evidence may well
show that these inflators are as dangerous today as they were
when Takata first learned that they were potential killers some
years ago, as early as 2004 and 2006, that they are as
dangerous today and should be completely revamped and revised
in their basic design and structure, which Takata has not yet
done.
The number of deaths reported so far is eight. I feel that
that number is a lot like the number 13 that was first
acknowledged by GM as caused by its defective ignition switch.
We now know that that number is at least 117 because of the
findings of the compensation fund that GM established only
after I and others on this committee called for them to do it.
That number of eight may well grow. It may be only the tiny
fractional tip of the iceberg of death that was caused by these
exploding airbags.
And so I believe, as has been stated, that this report is a
searing, devastating indictment of an agency that was
responsible for protecting the public. But let's not forget the
responsibility of corporate executives, who could have and
should have fully disclosed and then protected their customers
from these devastatingly deadly devices.
I think that that record of cover-up and concealment is one
of the low points in corporate conduct, and it represents the
need to strengthen not only the agency that you had, Mr.
Rosekind--we need to strengthen that agency, not strangle it.
We need to provide more resources and funds, not cut. But a cop
is only as good as the legal tools that he has. A cop is only
as good as the laws that are enforced.
And so I have proposed, along with my colleagues Senator
Markey, Senator Nelson, a collection of new laws that will
strengthen your legal tools. Because, ultimately, we can use
all the rhetoric we want in this room, in press conferences, in
public forums, but the rhetoric is no good without real action
and institutional change and new laws that give you the tools
you need.
So, for example, eliminating the caps on penalties--not
just raising them, but eliminating the caps on penalties for
nondisclosure; the Early Warning Reporting Act that will give
you the mandate to establish a database that is useful to
consumers so they can take action to protect themselves; the
Automaker Accountability Act that I have proposed; as well as
criminal penalties imposed not just on the companies but on the
corporate executives when they cover up or conceal defects.
And, as my colleague Senator McCaskill has already said,
rental car companies need to be held accountable, but also used
car dealers. At least one of these Takata deaths occurred as a
result of a used car. And very often the manufacturers and the
dealers simply can't find the present owner of a car because he
or she has bought it as a used car.
Automobile manufacturers and new car dealers are required
to repair safety recalls before selling recalled vehicles under
current law, but there is no requirement that used car dealers
fix any outstanding safety defects before selling a used car.
And this gap in consumer protection puts people at risk.
So I think there are a number of preventive acts that can
be taken, and not the least of them is that any settlements,
such as happened with the GM ignition defect, be disclosed
fully. Secret settlements ought to be banned. That is why I
have proposed the Sunshine in Litigation Act with my colleague
Senator Graham, and I hope to revive it again this challenge.
I want to know from you whether you will join me, Mr.
Rosekind, in seeking these basic, fundamental reforms----
Mr. Rosekind. I am going to start----
Senator Blumenthal.--that will be important going forward.
We can allot and blame as much as we wish for the failures of
the past, and there have been deadly failures. But repairing
this system and reforming it going forward ought to be our
concern. And it is not just oversight; it is addressing these
problems with new legislation, giving you new tools, and your
successors, so that there is real institutional change.
Mr. Rosekind. And I just wanted to start by saying thank
you, because, yes, what you have seen over the last months is
NHTSA's willingness to use all authorities and tools available
to us to get action. If we don't have those authorities or even
the maximum is ineffective, we can't do our job. So we will
support and provide any technical and other assistance to help
with those new authorities.
Senator Blumenthal. And you need more resources, do you
not?
Mr. Rosekind. Absolutely.
Senator Blumenthal. In fact, the FAA, I think, has
something like 30 times your budget and 6,000 employees as
compared to your 90. Is that not a glaring deficiency? Does
that not reflect a lack of investment in your agency and in the
safety of our roads and drivers?
Mr. Rosekind. And you are citing a chart that is in our
workforce assessment that makes that comparison.
So, with under 500 deaths in major aviation accidents, they
have over 6,000 safety professionals working at that number. In
the rail industry, they have under 10, and they have close to
700 professionals working on that. And we have, in 2013, 32,719
lives lost on our roadways, and at NHTSA we have 90 people
dealing with those.
Senator Blumenthal. If our airplanes and airspace were as
dangerous as our cars and our roads, corporate officials would
be indicted and there would be sweeping changes in the airline
industry. The lack of dramatic crashes is perhaps what enables
the drip-by-drip, crash-by-crash tragedies that have been
detailed here. And this Nation has to make the kind of
investment in your agency that, laudably, it has made in the
safety of our airspace.
Thank you.
The Chairman. I have Senator Markey, followed by Peters,
followed by Heller, followed by Daines.
We have a vote going on, so if you want to proceed. And, if
you can, I would like to wrap this first panel up as quickly as
possible. I will go over and vote, and if we get to the end of
the people who want to ask questions, gavel it out, recess it,
and we will come back and pick up as soon as we get through
with the vote.
Senator Markey?
STATEMENT OF HON. EDWARD MARKEY,
U.S. SENATOR FROM MASSACHUSETTS
Senator Markey. Thank you, Mr. Chairman, very much.
Dr. Rosekind, Senator Blumenthal and I have a bill, the
Early Warning Reporting System Improvement Act, that requires
automakers to automatically provide more documents about
potentially defective cars to NHTSA and requires NHTSA to then
make more of that information available to the public so that
it can protect itself.
And we can't get back the 117 people whose lives were lost
to the GM ignition switch defect; we can't get back the 8
people whose lives were taken by exploding Takata airbags.
But, Dr. Rosekind, you do have right now the authority to
implement many of the changes that the Markey-Blumenthal early
warning reporting bill requires. You can take permanent
measures, even without a new law, to put information about
fatal defects into the hands of the public in case NHTSA's
analysts fail to spot the next ignition switch or exploding
airbag defects. You can look at the families who lost their
parents, children, spouses, or siblings because of these
defects, and you can tell them that you did everything you
could to make sure that their lives weren't lost in vain.
Dr. Rosekind, will you call for a NHTSA rulemaking to
require automakers to provide the early warning documents that
alert them to potentially fatal defects to NHTSA and to have
NHTSA then make this information public?
Mr. Rosekind. The agency and I will do everything we can
with the transparency of the agency to try and make that
information available. Numerous examples already raised; if the
information had been available, that could have helped to save
lives.
And our interest will be to look at that and make sure that
our current legal requirements related to privacy,
confidentiality, wouldn't actually impede that objective.
Senator Markey. Will you do a rulemaking, Dr. Rosekind, in
order to make sure that there is a formalized process to ensure
that the information goes to your agency and then the agency
discloses it to the public so that they can protect themselves?
Mr. Rosekind. And I will commit to looking at what shape
that could look like, knowing what our current legal
obligations are for confidentiality.
Just very simply, the manufacturers have that data. They
don't have the Federal restrictions we do related to
confidentiality and privacy, for example. They could post that
now----
Senator Markey. Will you do a rulemaking? Will you do a
rulemaking, Doctor, consistent with the Privacy Act and
confidential proprietary information to ensure through the
rulemaking that any information which you can make public will
be made public and that the auto industry will be forced to
give you that information? Will you conduct a rulemaking to
achieve that goal?
Mr. Rosekind. I will determine whether--whatever we can do
for transparency, I will determine whether or not a rulemaking
is even needed.
Senator Markey. Well, so you are going to--so you will do
everything, then, that is allowed by law to ensure that the
auto industry will provide you with the information about
defects and that NHTSA will then release that information? You
will do everything that is allowed by existing law?
Mr. Rosekind. That is what we will look into and make sure
that we can provide that transparency, yes.
Senator Markey. And you are saying that you do not need a
rulemaking in order to accomplish that goal?
Mr. Rosekind. And that is what I have to look at, what
those legal conflicts are. So if it is not----
Senator Markey. Will you do a rulemaking if one is
required? After you determine the scope of your authority under
the existing rules, will you do a rulemaking if it is
necessary?
Mr. Rosekind. If the evaluation shows a rulemaking would be
useful for transparency, yes.
Senator Markey. OK. Well, I think that is very important. I
think that will really give the information to the public which
they need. If people can go online to buy a car, they should be
able to go online in order to determine if that car has a
defect which could harm a family member.
So the sooner you put it online, the sooner you put that
information up, the sooner you get that information out there
is the more accountable the industry is going to be. They will
know that, that the consumers will be king, the consumers will
be protecting their family, the consumers will be able to
ensure that any successor NHTSA is accountable and ensuring
that that information is made public.
Now, Senator Blumenthal and I have another bill, and that
bill is one that says that a used car that is now purchased by
someone may have a recall that actually ensures that there is a
free replacement part but that the person who purchased the
used car really doesn't know about it. So our bill would
require that when that new owner registers their cars that they
are made aware of the safety defects and that those repairs are
made.
Would you support that kind of legislation, Dr. Rosekind?
Mr. Rosekind. DMV is a very important touch point to get
those people informed. GROW AMERICA talks about this, because,
at this point, there is no sense yet of the technology to do
that, the cost, the procedures, et cetera, and making sure that
the consumers basically don't have any negative effects from a
defect created by a manufacturer.
So, absolutely, DMVs could be a touch point that could be
used. And in GROW AMERICA, we are suggesting pilot programs to
work that technology, the cost procedures out to figure out how
it could go national.
Senator Markey. OK. Thank you. I appreciate that.
Senator Heller [presiding]. Thank you.
I am doing the heavy lifting right now with the gavel.
Senator Peters?
STATEMENT OF HON. GARY PETERS,
U.S. SENATOR FROM MICHIGAN
Senator Peters. Thank you.
And appreciate both the panelists here today and your
testimony.
Administrator Rosekind, I hear you when you say that NHTSA
needs help. And if the agency is going to be able to deliver
effective oversight for vehicle safety, we in Congress here,
need to consider increasing your funding, as well as having
stable funding, so you can modernize your crash data collection
systems, hire additional electronic and technical experts, and
enhance the Office of Defects Investigation.
But before that happens, I am sure you know very well that
you must prove that your agency can actually do this
effectively and have in place the procedures that can ensure
the work is done in a timely manner. And you know as well as
anybody, time is of the essence. The more time that elapses
oftentimes means more deaths as a result of problems.
Now, I personally see all the time in Michigan the
incredible progress that the auto industry is making to develop
new technologies focused on collision avoidance and mitigation.
These new developments, without question, are going to make
traveling on our Nation's roads much safer, smarter, more
energy-efficient, and at the same time less congested.
And Congress, I believe, needs to do its part to promote
these polices that will help us usher in this new age and this
new era of safety and mobility. And the first step should be to
ensure that NHTSA has the resources to not only address the
major issues that it is facing today, and the one in particular
with airbags, but also encourage the development of these new
technologies that have the potential to save thousands of lives
in the future.
But it will be difficult to secure this funding and the
ability to move this incredible technology forward if folks
like myself and fellow Members of Congress are not confident
that the resources are going to be deployed in an effective
manner. And, as the IG report has made clear, there is a
considerable amount of work to do.
Administrator Rosekind, this recall you are involved in
right now is of unprecedented scale. NHTSA is courting this
recall, and you have introduced a number of programs and
initiatives in order to do this. You have told our committee
about the 17 recommendations of the IG, which reiterate many of
the findings of your own internal report, and about how you
anticipate the agency being able to implement these
recommendations before the end of the year.
Sir, can you say that NHTSA can adequately coordinate this
recall that you are in the middle of right now and implement
these reforms without more funding from Congress?
Mr. Rosekind. We already have that plan in place, that we
have to effect this recall with current resources. That is the
plan.
Senator Peters. And that will be an opportunity for us to
see the effectiveness of your agency, to be able to use these
resources, to be able to do this in an expedited way?
Mr. Rosekind. Correct.
Senator Peters. To Mr. Scovel, you have identified
certainly an alarming lack of transparency and accountability;
a severely deficient workforce, both in volume and technical
expertise; and, as I mentioned earlier and you have mentioned
here, you have delivered 17 recommendations, and NHTSA has
concurred.
You have provided detailed action steps taken to make
changes, but based on, now, you have intimate knowledge of this
agency as a result of your work, do you believe that this
agency is capable of making these changes? And how long do you
think it will take?
Mr. Scovel. Thank you, Senator Peters.
I would hold the Administrator to his word. When he
responded to our audit report, he indicated not only
concurrence but a very aggressive intent to make good on all of
those in a relatively short timeframe, in our experience
dealing with similar reports in other modes of the Department
of Transportation.
Clearly, the burden is on the agency at this point to make
good on its promises to reform its processes so that it may
then come to Congress and back to the American people and say,
we are prepared to handle what we have, and, by the way, we may
be able to do even a better job should, as a policy matter, we
be accorded more resources.
But right now, sir, the burden is on the administrator.
Senator Peters. And you have set a very aggressive timeline
of one year. Again, based on your intimate knowledge--and you
have a lot of experience with a lot of different agencies--is
that really a realistic timeline?
Mr. Scovel. It is. I would say that is the Administrator's
own timeline, which we endorse. We are hopeful. We will birddog
these recommendations and the implementation of them as
carefully as we have anything else in our long history of
providing oversight for the department's safety regulatory
agencies.
Senator Peters. Well, I will be with you, working closely.
That has always been my frustration. When you sometimes get
recommendations from the IG, there is lip service but never
follow-through, and 1 year turns into 2 years and 3 years.
And, in the case of the work of this agency, these are
people's lives at stake. And we need to have a robust regulator
that is able to also help us in the auto industry in this
country to move to even more dramatic safety improvements with
some of the V2V and the V2I technologies that are coming
forward.
So I look forward to working with both of you gentlemen.
Thank you so much.
STATEMENT OF HON. DEAN HELLER,
U.S. SENATOR FROM NEVADA
Senator Heller. Senator Peters, thank you.
Mr. Rosekind, it looks like you and I are going to have a
one-on-one conversation.
And, Mr. Scovel, it is not because I don't appreciate your
work.
And I do appreciate both witnesses' being here. And I don't
think I will complete the questioning. It is my understanding
that we will have more members back after they get back from
the floor. If not, we will go to recess until they do.
But I want to talk a little bit about this gap in consumer
protection that others are talking about. Last Saturday, I
dropped my daughter's car off at the dealership. I usually do
most of the work myself. My father owned an automotive
business. And, anyways, it was an independent auto repair
service.
And so the question becomes, if you are the second owner,
third owner, fourth owner of a particular vehicle. When I went
into that dealership, does that dealership have an obligation
to tell me if or not there is a recall on that particular make
and model?
Mr. Rosekind. They do not. That is part of our GROW AMERICA
authority request, is to get that kind of independent--if you
go to a new car dealer, they should do that for you
automatically----
Senator Heller. OK. But are they obligated to do that? If--
--
Mr. Rosekind. No.
Senator Heller.--you go to a new car dealership today, are
they obligated on a service maintenance contract that you might
have with them to tell you if there is a recall?
Mr. Rosekind. Yes, they should be doing that for you.
Senator Heller. But are they obligated and----
Mr. Rosekind. Yes.
Senator Heller.--are they required?
Mr. Rosekind. Yes.
Senator Heller. Because I asked, I did ask, and they gave
me the answer, and I have no reason to question it. But I don't
know that I have ever been to a dealership that I have dropped
a car off that they have told me. And maybe they don't have to
unless you have a recall, so I am not putting that into
question.
So you are saying, if I took that vehicle instead, say, to
a Jiffy Lube, they wouldn't be obligated to tell me if there
was a recall?
Mr. Rosekind. Correct.
Senator Heller. Gas station? None of them are responsible;
is that correct?
Mr. Rosekind. That is correct.
Senator Heller. OK. OK. How is that going to change?
Mr. Rosekind. In GROW AMERICA, we have asked to change that
so that everybody, not just the new car manufacturers but all
those independents, would also be required to run that check--
--
Senator Heller. OK.
Mr. Rosekind.--and inform you.
Senator Heller. OK. So if your tendency is to bring your
car into an independent station, what is your alternative,
then, to know about a recall? What is the alternative?
Mr. Rosekind. What we are recommending is that everybody on
a regular basis, even weekly, go to safercar.gov and look up
your VIN number.
Senator Heller. All right. So you are an 18-year-old girl;
do you think weekly they will go to safercar.gov?
Mr. Rosekind. No way.
Senator Heller. No way. I guarantee you my daughter
wouldn't. So there is the gap.
How do you protect--and I am a parent, and I know you are a
parent too. And I hope you had a good Father's Day. How do you
protect that child? As a parent that represents everybody here
in this room, how do you protect that child, knowing that they
won't go to safercar.gov? I will, and I will check for her.
But I guess a better question is, what percentage of
America even has ever heard of safercar.gov?
Mr. Rosekind. That is a good question. I am going to
actually find that out, to know about safercar.gov and sort of
what its visibility is.
But we are with you. I think, especially over the last
year, there is so much discussion about recall fatigue and how
much information is out there, do people know where to go; it
is a huge problem.
So one of the things, actually, that we have on our list of
actions already underway is creating a national campaign. NHTSA
is the one who runs Click It or Ticket, Drive Sober or Get
Pulled Over.
Senator Heller. It works, by the way.
Mr. Rosekind. And we want to use that same effect in this
to go after this issue. Because I am with you. It is great to
come here and for us to announce safercar.gov, but there are
too many people, like our kids, that aren't going to do that.
We have to figure out how to fill those gaps.
Senator Heller. Very good.
I am going to stop my questioning here, but thank you very
much for your hard work, both of you. And I am going to go down
to the floor, but I will turn it over to Senator Daines at this
point. Thank you very much.
STATEMENT OF HON. STEVE DAINES,
U.S. SENATOR FROM MONTANA
Senator Daines [presiding]. All right. Thank you, Senator
Heller.
I truly am grateful this committee is highlighting the
safety challenges of Takata's airbags that have killed eight
people. However, there are other recalls that I believe need
attention and further underscores NHTSA's lack of efficacy.
Last summer, there was a fire truck, a 2002 International
Model 4800, that's front axle, actually the ball and socket,
seized, and it caused the shaft to break, seizing up the left
front wheel. It was coming down Highway 12, just outside of
Helena, Montana. It is between my hometown of Bozeman, and I
drive this all the time.
It was during daylight hours. Weather conditions were fine.
And this fire truck veered into oncoming traffic, and the
volunteer fire chief in the truck was killed in a very violent
head-on collision. And there was a family of five, mom and dad
and three small children, in a pickup that were also killed.
So when I drive back and forth--in fact, I went by that
tragic site just days after it happened. You could see the
marks coming in, the tire marks, in a straightaway where this
horrible collision occurred. There are six white crosses now
standing by the side of the highway where that occurred.
This particular Navistar front driveshaft has been recalled
in approximately 500 vehicles, with notifications being mailed
this month. Now, this accident occurred on June 19 of last
year. So the notifications went out just in the last 10 days, a
year after the accident.
And it turns out this exact component was a NHTSA-approved
solution to a previous recall that occurred in 2003.
With that as background, Dr. Rosekind, the recent OIG
report frequently makes references to the defects, the lack of
process, the weak data analysis contained in these reports,
which I have looked over. They have made 17 recommendations to
ODI to improve early warning reporting data, improve data
verification processes, to institute external reviews, and
evaluate staff training needs, amongst other recommendations.
Unfortunately, this is not the first time many of these
recommendations have been made. The OIG highlighted similar
issues and made similar recommendations in 2002, in 2004, in
2011, in 2014, and now here we are in 2015.
So my question for Dr. Rosekind is: Navistar declared a
safety recall 2 months after the accident. They moved quickly
with an interim solution. But 12 months after the accident, the
final recall was being sent and the solution is being executed.
You mentioned in your testimony it is the automakers'
responsibility to remedy defective components. My question is,
why is it taking a year? And what are the NHTSA scientists and
engineers doing to expedite these solutions to mitigate these
safety risks to all Americans?
Mr. Rosekind. I said this earlier; I don't think you can
say it enough. This committee--that story about the tragedy of
those lives lost can't be told enough. So we have personalized,
added a human face to every one of these tragedies.
What you are highlighting is something we have emphasized.
Identifying defects is fine. If they are not remedied, you
still have the risk. And that is what is going on here. And
part of the challenge that you were citing is basically making
sure in a timely manner a correct long-term, permanent solution
is in place.
So I have just learned about this, and you can count on me
going back to figure out exactly the specifics, even more than
what you are telling me now, of what happened here to see what
is going on.
Senator Daines. Yes, I would appreciate that. You know, it
is also the face of innocence here, with a fire chief--he was
returning back to Three Forks, Montana. It was a nice summer
evening, good daylight, in a straightaway. And you see this
young couple and their kids in a pickup. And it is a road I
drive all the time. And it was just the innocence of the lives
lost, I think, that is so troubling.
But, importantly, could this have been prevented? That is
really the question and looking at the process and procedures,
the speed at which the remedies are put in place. I would
greatly appreciate you taking a look at that.
And, you know, part of that is how many times has NHTSA had
more than one recall on the same vehicle component. And I know
you are new to the job. I appreciate your leadership. I know
you have a long to-do list, but I would appreciate you looking
into that and looking at--again, we have had repeat recalls
here--so we can prevent these tragedies.
Since I am the only Senator here right now, I am going to
keep going with some more questions until I am out of time.
Mr. Scovel, does the Office of Inspector General maintain
stats on how often components are recalled more than once?
Mr. Scovel. We do not. We did not include that as part of
our current audit. We don't maintain that kind of data base to
begin with. Our current audit, sir, it, as you know, focused on
the pre-investigative phase and not on the recall phase.
Senator Daines. Yes. And I might suggest it is something to
look at, because that is starting to look at the process and
the systemic challenges that exist today, again, with the goal
here being preventing these tragedies from ever happening
again. The pain these families expierence never goes away.
NHTSA's Office of Defects Investigation has had over a
decade to implement numerous recommendations from your office.
What do you see the challenge around why it is taking so long
to implement?
Mr. Scovel. Senator, some of those recommendations were
tailored for the circumstances and the unique programs that we
were examining at the time. For instance, the 2002 and 2004
reports that you referenced were examining NHTSA's ability to
implement requirements of the newly enacted TREAD Act. In 2011,
we were looking at the investigative phase, primarily, of
NHTSA's operations. In the current audit, we were looking at
the pre-investigative phase.
So I don't want to sound like I am overly parsing this,
because we are trying to dissect each and every phase of
NHTSA's safety operation, with the idea of being able to
commend what is going on right, find out what is going on
wrong, and make effective recommendations to improve.
Our recommendations in this case, all concurred in by the
agency. Very aggressive timeline for their implementation. We
believe they can all be implemented, in fact, with current
resources. And I think that is the agency's intent. Most
commendable on their part.
What Dr. Rosekind is attempting to do, in our estimation,
is to change the organizational culture of NHTSA, at least the
defects investigation and resolution part of the operation.
Senator Daines. Yes. I spent 28 years in business before I
took this different day job here on Capitol Hill. And they
always said it is what you inspect, not what you expect----
Mr. Scovel. Right.
Senator Daines.--and the importance of clear metrics. And I
think there should be one, it looks like, on just perhaps its
speed, in terms of how quickly are we going from an accident to
action in the field here that is going to correct the defect.
Mr. Scovel. Right.
Senator Daines. It seemed like, when Navistar was in the
field within 2 months, why did it take the Federal agency a
year?
Mr. Scovel. Right.
Senator Daines. You know, there is a 10-month gap there.
Mr. Scovel. Yes. And I think you are talking about safety
steps that can be taken by way of corrective action or by way
of recall.
Remember, again, if you will, our current audit focused on
the pre-investigative phase. We did get to the timing element
of that part of NHTSA's effort. Our audit report, not so much
our statement for today's hearing, but our audit report
released at the end of last week, did discuss at some length
the length of time it took for an investigative proposal to be
evaluated, assessed, and decided within the Office of Defects
Investigation.
That is a key step, of course, because you are never going
to get to a possible corrective action or a recall, at least in
a position to be influenced by NHTSA, unless you get through
this investigation proposal, evaluation, and decision stage.
We found one instance where an investigative proposal
languished 5 months. This was very recently, within the last
year. Another one had been on the books for more than a year
without resolution. There is a circuitous pattern for
evaluation and discussion within the Office of Defects
Investigation of some of these investigative proposals.
But, again, to pick up on Dr. Rosekind's opening remarks at
this point, question assumptions. One of the assumptions that
desperately must be questioned is how can we speed up the
decision loop so that we can get to the decision to investigate
sooner and hopefully, upon investigation, get to a decision on
corrective action sooner.
Senator Daines. Right. And I appreciate, sir, on the
balance of ensuring we are thorough and we have properly
identified the problem and how to mitigate the risk.
Mr. Scovel. Right.
Senator Daines. It just seems as though we are seeing a
pretty big gap there. And I appreciate your efforts, as well,
to change the culture, to look at ways we can move faster.
And the Senator and the Chairman have just returned here.
Mr. Chairman, I am going to turn it back to you.
But thank you for your thoughtful comments.
The Chairman [presiding]. Thank you to the Senator from
Montana for presiding here while we get through the vote.
And I think that wraps up the first panel. So thank you,
Mr. Rosekind and Mr. Scovel, for your time and for your
testimony and for your responses to our questions.
I want to invite the second panel to come up, and we will
get going with that.
We want to welcome our second panel of witnesses this
morning. Thank you for being here, and for your testimony.
I am going to hand it off for opening statements. We have
with us today Mr. Kevin Kennedy, who is Executive Vice
President of North America for Takata; Mr. Scott Kunselman, who
is the Senior Vice President, Vehicle Safety and Regulatory
Compliance, with Chrysler, formerly known as Chrysler Group;
and Mr. Rick Schostek, who is the Executive Vice President for
Honda North America.
So I am going to ask, if we could, on my left and your
right, Mr. Kennedy, if you will please proceed with your
testimony, and then we will go from there. And, if you can,
confine it as close to 5 minutes as possible, and we will take
it from there.
Mr. Kennedy?
STATEMENT OF KEVIN M. KENNEDY,
EXECUTIVE VICE PRESIDENT OF NORTH AMERICA,
TK HOLDINGS INC. (``TAKATA'')
Mr. Kennedy. Chairman Thune, Ranking Member Nelson, and
distinguished members of the Committee, I am honored to be here
on behalf of Takata and our employees throughout the United
States.
For Takata, safety is the core of what we do and who we
are. We are proud that Takata airbags have saved thousands of
lives and prevented serious injuries in hundreds of thousands
of accidents.
It is unacceptable to us for even one of our products to
fail to perform as intended. We deeply regret each instance in
which someone has been injured or killed. We will do everything
in our power to address the safety concerns raised by airbag
ruptures. Our chairman met twice with Administrator Rosekind
and made that commitment personally.
That is why, after months of testing and extensive
analysis, we voluntarily agreed with NHTSA to take broad
action, in conjunction with the automakers, to respond to your
concerns and those of the public. Our agreement with NHTSA
contemplates dramatically expanded recalls, including national
recalls, going well beyond the scope of the risk suggested by
the science and the testing.
Based on more than 57,000 tests of returned inflators in
years of research by leading experts from around the world, our
best current judgment is that the rupture issues are related to
long-term exposure over many years to persistent conditions of
high heat and high absolute humidity. And for some inflators,
these issues may also involve potential manufacturing and
vehicle-specific factors.
Most field ruptures have involved older inflators in the
region of high heat and absolute humidity. And all analysis to
date indicates that the potential for rupture is limited to an
extremely small fraction of inflators.
That is why Takata's filings state that a safety-related
defect may arise in some of the inflators. Not all of the
inflators covered by the proposed recalls are defective. But
even one rupture is too many, and so our remedy program is much
broader.
Most of the injuries and all of the fatalities in the U.S.
involve driver-side airbag inflators that feature the batwing-
shaped propellant wafers. We have agreed to replace all of the
batwing driver inflators from the start of production through
the end of production in any vehicle registered anywhere in the
United States.
These recalls will proceed in stages, and the final stage
will include the replacement of batwing inflators previously
installed as remedy parts.
We are ceasing production of the batwing inflators
altogether.
There have been far fewer field ruptures involving
passenger-side airbags. Nevertheless, our agreement with NHTSA
also contemplates significantly expanded recalls for passenger
airbag inflators.
To support these recalls, our total production of
replacement kits for North America will soon reach 1 million
per month. We have augmented our capacity to produce
replacement kits by including inflators made by other
suppliers.
We are investing in innovation and working with our
automaker customers to develop a range of new inflator
products. At the same time, Takata continues to serve its
customers by producing airbag inflators that use phase-
stabilized ammonium nitrate propellant, which has distinct
safety and efficiency benefits over alternative propellants. We
have full confidence in the safety of these products.
We are using various technologies in response to the
recalls. The process of qualifying new products takes time, and
for certain types of airbags and for certain vehicle models,
the best solution today is to use existing technologies in
place of the original unit. We agree with NHTSA that it is
absolutely the right response to public safety concerns not to
wait but to replace an older unit with a new inflator. Doing so
provides an important safety benefit.
We have agreed with NHTSA to do ongoing testing to verify
the safety and the service life of these remedy parts. If they
need to be replaced in the future, we will act before a
potential risk of rupture develops. We are also supporting the
testing work of the automakers and NHTSA as well as the work of
the independent quality assurance panel led by former Secretary
of Transportation Sam Skinner. And we will work with the
automakers to get the word out to consumers to help maximize
recall completion rates.
We will continue to do all we can to ensure uncompromised
safety, and we will keep you and the public updated on our
progress.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Kennedy follows:]
Prepared Statement of Kevin M. Kennedy, Executive Vice President,
of North America, TK Holdings Inc. (``Takata'')
Chairman Thune, Ranking Member Nelson, and distinguished Members of
the Committee, I am honored to be here today on behalf of Takata and
our employees across the United States and around the world who are
dedicated to making products that save lives.
For Takata, safety is more than an obligation; it is the core of
who we are and what we do. We are proud that millions of Takata airbags
have inflated properly, preventing thousands of deaths and avoiding
serious injuries in hundreds of thousands of accidents. We are also
proud of our seatbelts that save lives, the spacesuit materials we make
to protect our astronauts, and all the other high-quality products
Takata manufactures.
It is unacceptable to us and incompatible with our safety mission
for even one of our products to fail to perform as intended and to put
people at risk. We deeply regret each instance in which a Takata airbag
inflator has ruptured, especially in those cases where someone has been
injured or killed.
We understand how important it is to the driving public, Congress,
the National Highway Traffic Safety Administration (``NHTSA''), and our
automaker partners to address and resolve the safety concerns raised by
the airbag ruptures, and we are committed to doing everything in our
power to help achieve that goal.
I am therefore pleased to tell you today what Takata is doing to
address these issues.
Takata's Agreement with NHTSA
After months of testing and analysis of tens of thousands of
returned inflators and extensive discussions and collaboration, we
voluntarily agreed with NHTSA to take broad actions, in conjunction
with the automakers, to respond to the public safety concerns.
Our agreement with NHTSA contemplates dramatically expanded
recalls--including in several instances nationwide recalls--
encompassing various types of airbag inflators.
The proposed recalls and the related commitments we have made go
well beyond the scope of the safety risk suggested by the current
science and testing data.
Root Cause Assessment
Takata has engaged world-renowned experts in energetic systems from
Germany's Fraunhofer Institute to conduct years of research into the
root cause of the inflator ruptures, and we have consulted with various
engineering experts in the United States. Takata has also tested and
analyzed tens of thousands of returned inflators over the past several
months. We have shared the results of that research with NHTSA and the
automakers, as well as with this Committee.
Based on this research and our ongoing testing and analysis of
returned inflators, Takata has gained a much better understanding of
the long-term phenomenon behind the recent ruptures. Our best current
judgment is that the potential for rupture is related to long-term
exposure, over a period of several years, to persistent conditions of
high heat and high absolute humidity. In certain circumstances, these
conditions can result in an alteration in the propellant wafers in the
inflators that could potentially lead to over-aggressive combustion.
The research of our experts suggests that the potential for this
long-term phenomenon to occur was not within the scope of the testing
specifications prescribed by automakers or comprehended within the
industry's inflator validation practice when the inflators were
originally made--an important fact that is not intended to put blame on
the automakers or suggest an allocation of responsibility between the
automakers and Takata.
The potential for rupturing may also be influenced by other
factors, including the possibility of manufacturing issues, like those
identified in earlier recalls, and factors specific to particular
vehicle models.
Consistent with this research, most of the field ruptures have
involved older inflators and most have occurred in regions of the
country with high heat and high levels of absolute humidity. All
research to date indicates that the potential for ruptures is limited
to an extremely small fraction of older inflators.
But even one rupture is too many, and so Takata has agreed to take
much broader action.
Driver Airbag Inflators
All of the fatalities--including most recently in Louisiana--and
most of the injuries that have occurred in accidents with ruptured
airbag inflators in the United States have involved older types of
driver-side airbag inflators that feature ``batwing-shaped'' propellant
wafers.
We propose to replace all of these ``batwing'' driver inflators,
from start of production through end of production, in all vehicles
registered anywhere in the United States.
To date, there have been a total of 70 reported instances in the
U.S. of such ``field ruptures'' involving the ``batwing'' driver
inflators. Fifty-eight (58) of those ruptures occurred in vehicles that
were already subject to previous recalls involving identified issues
with the pressing of the propellant wafers in some of these inflators.
To put these incidents in perspective, the 70 reported cases of
field ruptures involving the older batwing driver inflators represent
approximately 0.009 percent of estimated total deployments of these
airbags, or around 9 failures out of every 100,000 deployments.
In the past several months, Takata has conducted ballistic tests of
more than 19,000 of these driver inflators, and 16 of them have
ruptured during testing, or approximately 0.084 percent of the tested
inflators. The inflators selected for this ballistic testing include a
disproportionate number of older inflators returned from areas of high
absolute humidity, so the percentage of failures seen in the testing
results is likely to overstate the overall potential for rupture.
These figures are not meant to minimize the issue. But they do put
in perspective why Takata's Defect Information Reports (``DIRs'') state
that a safety-related defect ``may arise'' in ``some'' of these
inflators. It is not the case that all of the inflators covered by the
DIRs are ``defective.''
Notwithstanding the science and testing data suggesting that the
problem is focused on a small number of older inflators that have spent
years in regions of high heat and absolute humidity, Takata will
support the replacement of all the batwing driver inflators through
national recalls to be conducted by the affected automakers.
The recommended recalls will proceed in four stages. In order to
prioritize the replacement of inflators where the safety need is
greatest, the first stage will target older vehicles that have ever
been registered in the Southern States, Hawaii, and territories where
the levels of both heat and absolute humidity are higher than anywhere
else in the country.
But the recalls will not stop there. Subsequent stages of the
recalls will target the batwing driver inflators manufactured in later
years and vehicles registered in other States outside the areas of high
absolute humidity. The recalls will continue until we have replaced all
of the batwing driver inflators, from start of production to end of
production, and they will include vehicles manufactured by five
different automakers--Honda, BMW, Chrysler, Ford, and Mazda. The final
stage of the recalls will include the replacement of batwing driver
inflators that were previously installed as remedy parts in prior
recalls.
Takata has also committed to cease producing the batwing driver
inflators.
Passenger Airbag Inflators
There have been far fewer field ruptures involving passenger
airbags: 22 total reported instances in the U.S. to date (of which most
occurred in vehicles subject to prior recalls), and none has involved a
fatality. Nevertheless, our agreement with NHTSA also contemplates
significantly expanded recalls covering several types of passenger
airbag inflators.
One of these proposed recalls will be nationwide in scope. The
other two will focus initially on high humidity States, but with the
potential to expand to a nationwide recall if ordered by NHTSA after
consideration of additional testing and consultations with Takata and
the affected automakers. Specifically:
For one type of passenger inflator, we have recommended a
nationwide recall that will proceed in four stages, according to the
year the inflator was made. This recall will encompass all of the
inflators of this type from start of production through vehicle model
year 2008, and it will involve vehicles manufactured by eight different
automakers.
The root cause assessment for the potential issue with these
inflators includes the long-term exposure to high heat and absolute
humidity discussed above, but it also includes the possibility of a
specific manufacturing issue.
This type of passenger inflator has been involved in nine (9)
reported field ruptures in the U.S., which represents approximately
0.0045 percent of estimated deployments. While it has ruptured at a
higher rate in Takata's ballistic testing (approximately 0.68 percent
out of nearly 10,300 tested), all but two of the test ruptures to date
have involved inflators returned from high absolute humidity States.
The two exceptions were inflators manufactured on the same day, which
suggests the possibility of a discrete manufacturing issue.
Takata has committed to continue testing this type of inflator from
later model years and to share this test data with NHTSA, in order to
monitor whether additional action may be appropriate.
For two other types of passenger inflators, Takata has recommended
recalls focused on particular models and model years of vehicles
manufactured by certain automakers. The recalls will initially cover
the relevant makes, models, and model years of these vehicles that were
sold or ever registered in Florida, Georgia, Texas, and the other high
absolute humidity States and territories. But there will be the
potential for these recalls to expand later to other States and
potentially nationwide if NHTSA finds that the results of further
testing show the need for an expansion, after consultation with Takata
and the affected automakers.
The scope of the recalls recommended for these last two types of
passenger inflators tracks the results of Takata's testing and
analysis. While there have been 13 reported field ruptures of these
inflators, representing approximately 0.0055 percent of estimated
deployments, all have involved vehicles of the specific makes and
models covered by our DIRs and all were in vehicles that had spent
years in the areas of high absolute humidity.
In addition, Takata's ballistic testing of these two inflator types
has shown elevated rates of test ruptures for these inflators when
returned from the areas of high absolute humidity and from the
particular models covered in the DIRs, and no test ruptures for the
same types of inflators in other circumstances. These results show the
clear importance of long-term exposure to an environment of high heat
and absolute humidity. But they also indicate that something about the
particular makes and models of these cars appears to be correlated with
the potential for these inflators to rupture.
Takata has committed to NHTSA that we will continue to test these
types of passenger inflators from other vehicles and from other States
to help determine whether the scope of these recalls should be
expanded.
Continued Use of Phase-Stabilized Ammonium Nitrate, Including in Remedy
Parts
In serving the demands of its customers, Takata continues to use
phase-stabilized ammonium nitrate (``PSAN'') in the propellant
formulations for many of its airbag inflators. PSAN is safe for use in
airbag inflators, and Takata has full confidence in the safety of our
current products that use PSAN propellant, including the replacement
parts we are making in response to the recalls. The chemistry of phase
stabilizing ammonium nitrate is well established and well understood,
and our research into the root cause of the inflator ruptures has not
shown that they are associated with any measurable loss of phase
stabilization of the propellant, even after many years in the field.
PSAN has distinct advantages over other chemicals used in
alternative inflator propellants. It is non-toxic; it is stable and
safe to handle during the manufacturing process; it produces far less
smoke and particulate matter when the airbag is deployed, so that it is
much less irritating to vehicle occupants with respiratory
sensitivities; and PSAN-based propellants are significantly more
efficient than other propellants (converting a higher percentage of the
solid propellant into gas), so that PSAN inflators can be smaller and
lighter, which has helped automakers meet government mandates to
produce more fuel-efficient vehicles.
At the present time, more than 50 percent of the airbag replacement
kits Takata is providing in response to the recalls contain inflators
made by other suppliers that do not use ammonium nitrate propellant. We
expect that number to reach 70 percent by the end of this year. The use
of other suppliers' inflators significantly augments Takata's capacity
for production of replacement inflators and also responds to some
automakers' desire to use alternative technologies in implementing
their recalls.
Through investments in innovation, Takata has developed and
continues to develop a range of new inflator products for use in both
driver airbags and passenger airbags, including updated PSAN-based
inflators with desiccant and inflators that do not use ammonium nitrate
in the propellant. Takata is working intensively with vehicle
manufacturers to validate new inflator products, including for use as
remedy parts. Over time, all of our inflators will consist of new
products.
The process of developing and qualifying inflators that are re-
engineered, including re-engineering inflators to add desiccant, takes
time. Among other things, this process involves testing to establish
that the airbag modules equipped with re-engineered inflators will
adequately protect vehicle occupants in a crash. The completion of that
process requires several months.
For certain types of inflators in certain vehicle models, there is
currently no available alternative to the use of a PSAN-based inflator
as the remedy part. In these cases, we have agreed with NHTSA that the
right solution for public safety is not to wait for the completion of a
process of engineering changes and approvals, but is to take action now
to replace the original inflators that are subject to the recalls with
new PSAN inflators.
The replacement of the original inflator with a newly made PSAN-
based inflator is absolutely the right response to the public safety
concerns raised by the inflator ruptures, and doing so provides an
important safety benefit. Because a clear factor in these ruptures is
the age of the inflator and long-term exposure to particular
environmental conditions over many years, the replacement of older
inflators with newly manufactured units, even ones without desiccant,
will provide an ample margin of safety over the older units being
replaced, particularly those that have been exposed for many years to
conditions of high heat and absolute humidity.
In replacing the batwing inflators on the driver side, Takata's
remedy parts include, in addition to inflators from other suppliers, a
newer type of PSAN driver inflator that has not shown a potential risk
for rupture after exposure to high heat and absolute humidity. On the
passenger side, Takata has made improvements to address specific
manufacturing issues and other improvements in the production of new
inflators, and these improvements also contribute to the added safety
of the newly manufactured PSAN replacement inflators.
As we pledged in writing in the Consent Order and the DIRs we
filed, Takata has agreed with NHTSA to conduct ongoing testing of PSAN-
based inflators used as remedy parts, in order to determine the
appropriate service life of the parts and whether further action may be
needed to replace the remedy parts in the future. You can be assured
that if later replacement of these remedy parts is determined to be
appropriate, Takata will take the necessary action, in conjunction with
the affected automakers, to complete such replacements well before any
potential risk of rupture develops.
In the meantime, we strongly believe, and NHTSA agrees, that the
goal of safety is best served through the expanded recall actions we
have recommended.
Implementing the Recalls
The Consent Order that we have agreed to with NHTSA makes clear
that NHTSA will play a central role in overseeing the organization and
implementation of these proposed recalls. NHTSA has now issued notices
in the Federal Register to receive comments on how best to proceed in
this regard. We anticipate that NHTSA will convene meetings involving
Takata and all of the affected automakers to organize and coordinate
the staging of the recalls, so as to ensure that the remedy is
appropriately prioritized to those vehicles where the public safety
need is most immediate.
The Consent Order also requires Takata, after consulting with the
automakers, to prepare a plan for NHTSA's approval that outlines the
steps Takata will take, both on its own and in conjunction with the
affected automakers, to maximize recall completion rates and, as noted,
to carry out further testing of inflators to help determine the safety
and appropriate service life of the remedy inflators.
Because the recalls will only succeed if consumers bring their cars
in for repair, we have committed to working with NHTSA and our
customers to help inform consumers about the risks associated with some
inflators, and to urge them to respond in a timely fashion to the
recalls that are being implemented.
To this end, we are in the process of developing a proactive
advertising campaign for NHTSA's approval that would be designed for
implementation in conjunction with the automakers, in order to reach
greater numbers of vehicle owners and help to ensure that the recall
completion rates will be as high as possible.
Additional Measures
Let me say a bit more about Takata's extensive testing program and
our ramped up production of replacement kits to address the needs of
these recalls.
Since the last hearing before this Committee, we have continued to
advance our investigation into the root cause factors associated with
the inflator ruptures. We have performed ballistic tests on more than
50,000 inflators since September of last year, and that testing and
analysis is ongoing. We also have performed live dissections,
propellant analysis for moisture, chemical analysis, leak testing, and
CT scanning.
We continue fully to support efforts by David Kelly's Independent
Testing Consortium and the automakers to do additional testing and
analysis. And we welcome NHTSA's decision to do its own testing, as
well as to coordinate with us on our testing.
In addition to supporting these ongoing testing efforts, we are
continuing to support the work of the independent Quality Assurance
Panel, led by former Secretary of Transportation Samuel K. Skinner, to
ensure that best practices are in place for the production of safe
inflators. We are committed to adopting the recommendations his panel
puts forth, and sharing the findings of the report with you and with
the public.
We also have continued to ramp up substantially our production of
replacement kits to fulfill automaker orders. In December, we were
producing approximately 350,000 kits per month. In May, we produced
approximately 700,000 units. By September, we expect to be producing 1
million per month. That is capacity primarily directed to production
for the U.S. market. And, as mentioned, we continue to work with other
inflator suppliers to increase further the production of replacement
inflators to meet anticipated demand.
Conclusion
In closing, I want to emphasize that we have confidence in the
inflators we are producing today. We have confidence in the integrity
of our engineering and our current manufacturing processes. We believe
that, properly manufactured and installed, these inflators will work as
designed to save lives. Of course, we know that the proof is in the
data, and that is why we have enlisted the assistance of the Quality
Assurance Panel and why we have agreed to conduct ongoing testing,
including of our remedy parts. We will continue to do everything we can
to ensure uncompromised safety for our customers and the success of the
recall efforts, and we will keep Congress, NHTSA, and the public
updated on our progress.
Thank you, Mr. Chairman.
The Chairman. Thank you, Mr. Kennedy.
Mr. Kunselman?
STATEMENT OF SCOTT KUNSELMAN,
SENIOR VICE PRESIDENT AND HEAD OF VEHICLE
SAFETY AND REGULATORY COMPLIANCE, FCA US LLC
Mr. Kunselman. Thank you.
Chairman Thune, Ranking Member Nelson, members of the
Committee, thank you for the opportunity to appear today and
provide an update on this important matter.
My name is Scott Kunselman, and I am the senior vice
president and head of vehicle safety and regulatory compliance
at FCA US, LLC, formerly Chrysler. I lead an organization with
a mission of safeguarding our customers, a mission we embrace
with passion.
As you know, FCA's involvement with Takata airbags is
extensive, proactive, and ongoing.
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 even
consumers. FCA looks forward to continuing this collective
engagement with Takata and NHTSA to help address this critical
situation related to airbag inflators.
FCA has remained actively engaged with Takata and NHTSA
since I spoke with this committee last November. Much has
transpired since that time. Through multiple recall campaign
expansions and based on information from both Takata and
actions by NHTSA, FCA is now in the process of recalling 4.8
million inflators in approximately 4.5 million vehicles across
the United States.
We are also aggressively taking actions on multiple fronts
to assist in determining the root cause of inflator ruptures,
which remains unknown at this time. FCA is an active
participant in the Independent Testing Coalition, a group
consisting of all 11 affected automakers formed in December
2014 and, again, trying to independently determine the root
cause of inflator ruptures. In addition, FCA continues to
return recalled inflators to Takata to further their research
and understanding.
But despite the lack of root cause determination to date,
FCA's mission to identify and implement solutions that will
improve the safety of our customers has not been delayed.
Today, I am pleased to share with the Committee that as of June
8, 2015, FCA is replacing all driver-side inflators involved in
the recall with an alternate and permanent design provided
through TRW. Customers who receive the TRW inflator replacement
will require no further action on their vehicles.
The Takata inflators that are no longer needed due to the
supply from TRW are being quarantined and returned from our
dealers to Takata. All of the approximately 50,000 customers
who previously received a Takata inflator will be notified to
return for the TRW update, as well.
In addition to these driver-side efforts, FCA has been
working with Takata to develop improved versions of the
passenger inflator designs. These new versions will contain an
improved igniter material as well as a desiccant that will
protect the propellant from moisture exposure. These designs
will complete validation testing in August, and FCA expects to
begin installing those in November of this year.
To date, FCA continues to be aware of just a single
incident of a high-pressure deployment involving a driver-side
airbag causing an injury in one of our vehicles. Our actions
demonstrate the abundance of caution we are employing to
protect our customers.
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, and
FCA will continue to collaborate with Takata, NHTSA, and others
to aggressively address this matter.
I once again extend my thanks to the Committee for
discussing this important issue, and I would be pleased to
answer any questions.
[The prepared statement of Mr. Kunselman follows:]
Prepared Statement of Scott G. Kunselman, Sr. Vice President and Head
of Vehicle Safety and Regulatory Compliance, FCA US LLC
Chairman Thune, Ranking Member Nelson, Members of the Committee,
thank you for the opportunity to appear today and provide an update on
this important matter.
My name is Scott Kunselman and I am Senior Vice President and Head
of Vehicle Safety and Regulatory Compliance at FCA US LLC. I lead an
organization with a mission of safeguarding our customers, a mission we
embrace with passion.
As you know, FCA's involvement with Takata airbags is extensive,
proactive and ongoing.
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. FCA looks forward to
continuing this collective engagement with Takata and NHTSA to help
address this critical situation relating to airbag inflators.
FCA has remained actively engaged with Takata and NHTSA since I
spoke with this Committee last November. Much has transpired since that
time. Through multiple recall campaign expansions, based on information
from Takata and actions by NHTSA, FCA is now in the process of
recalling 4.8 million inflators in 4.5 million vehicles in the United
States.
We are also aggressively taking actions on multiple fronts to
assist in determining the root cause of inflator ruptures, which
remains unknown at this time. FCA is an active participant in the
Independent Testing Coalition (ITC), a group consisting of the 11
affected automakers formed in December 2014 trying to independently
determine the root cause of the inflator ruptures. In addition, FCA
continues to return recalled inflators to Takata to further their
research and understanding.
Despite the lack of a root cause determination to date, FCA's
mission to identify and implement solutions that will improve the
safety of our customers has not been delayed. Today, I am pleased to
share with the Committee that as of June 8, 2015, FCA is replacing all
driver side inflators involved in the recall with an alternate and
permanent design provided by TRW. Customers who receive the TRW
inflator replacement will require no further action on their vehicles.
Takata inflators that are no longer needed due to the supply from TRW
are being quarantined and returned from our dealers to Takata. All of
the approximately 50,000 customers who previously received a Takata
inflator will be notified to return for the TRW update, as well.
In addition to these driver side efforts, FCA has been working with
Takata to develop improved versions of the passenger inflator designs.
These new versions will contain an improved igniter material, as well
as a desiccant that will protect the propellant from moisture exposure.
These designs will complete validation testing in August and FCA
expects to begin installation in November of this year.
To date, FCA continues to be aware of a single incident of a high-
pressure deployment involving a driver's-side air bag that caused a
personal injury in one of our vehicles. Our actions demonstrate the
abundance of caution we are employing to protect our customers.
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. FCA will continue to work
collaboratively with Takata, NHTSA and others to aggressively address
this matter.
I once again extend my thanks to the Committee for discussing this
important issue and I would be pleased to answer any questions.
The Chairman. Thank you, Mr. Kunselman.
Mr. Schostek?
STATEMENT OF RICK SCHOSTEK, EXECUTIVE VICE PRESIDENT, HONDA
NORTH AMERICA
Mr. Schostek. Thank you, Mr. Chairman, Ranking Member
Nelson, and members of the Committee. I appreciate the
opportunity to update the Committee on our efforts since my
last appearance before this committee.
Let me begin by acknowledging that in the past 2 weeks we
have confirmed that two more customers lost their lives--one in
September 2014 and the other in April of this year--as a result
of Takata airbag inflator ruptures that have occurred in our
older-model vehicles.
This is heartbreaking and a painful reminder to us of the
reason we continue to urgently accelerate our actions to repair
the affected vehicles. But, of course, the real pain is
experienced by the families of the victims. We sincerely
apologize to them and extend our deepest sympathies.
We are working very hard to solve this problem. Over and
above the required mailed notification to affected customers,
we have pursued new and creative ideas to encourage our
customers to check their vehicle identification number in order
to increase the rate of response to the recalls. We have
enhanced our general recalls website and created a new micro
site dedicated to this issue to keep our customers informed and
to make it easy for them to check their vehicles for open
recalls.
Honda also voluntarily initiated a bilingual regional
advertising program in March to implore customers to repair
their vehicles. This campaign of radio commercials and full-
page newspaper ads, represented here to my left, was designed
to grab the attention of customers in the nine high temperature
and absolute humidity states and two U.S. territories. We also
are using social media channels in a targeted way, including
via Facebook, with good success.
And let me add, Mr. Chairman, that whenever we issue a
press release or statement on this matter, we specifically
request that the news media help us spread the word by
directing customers to our recall websites so they can look up
their VIN and get their vehicle repaired. And we have
appreciated the news media's assistance with this effort.
To accelerate the safety actions and increase the supply of
airbag inflators, Honda proactively began searching for
alternate supply solutions to more quickly facilitate the
repairs of these older-model vehicles. And that effort led to
agreements with Daicel, Autoliv, and TRW to provide us with
replacement parts, in addition to Takata.
As a result of this proactive effort by Honda and the
actions taken by our dealers, we are averaging more than 50,000
repairs per week. We have also asked our dealers to expand
their service hours and never turn away a customer with an
affected vehicle.
And we require dealers to check the VIN for every vehicle
that comes into their dealership. To support this policy, in
February we initiated a new system that alerts dealers whenever
their staff fails to check a VIN of a car brought in for
service to see if it has an open recall.
We have also reinforced with our dealers Honda's firm
policy to provide affected customers with a loaner or rental
car free of charge while their vehicle is being repaired or if
they are waiting for a replacement part to be delivered. All
dealers are authorized to make a vehicle available to a
customer without prior approval from Honda.
We have also been searching salvage yards nationwide to
find and secure recalled inflators. We have already identified
many thousands of inflators from salvage yards that now never
will be installed in another vehicle.
In some markets, we have enlisted a special investigative
firm as part of our effort to contact hard-to-reach owners of
older model vehicles affected by the Takata airbag inflator
recalls.
Mr. Chairman, for many reasons, it is particularly
difficult to locate the owners of older vehicles and get them
repaired. When I testified last November, I suggested that we
find a way to tie the annual state vehicle registration process
to a requirement that safety defects be addressed before
completion of vehicle registration.
Subsequently, Ms. Stephanie Erdman, who was injured by a
Takata inflator rupture and who also appeared before this
committee last fall, joined me in writing an op-ed in
Automotive News in support of the idea of such a registration
requirement.
We continue to believe there is substantial promise with
this approach, and we want to thank Senators Markey and
Blumenthal for introducing S. 617. I recognize there are some
issues about the concept that require further discussion, but I
am convinced that this is the single most significant step we
can take.
Again, I very much appreciate the opportunity to appear
before the Committee today, and I would be happy to address
your questions. Thank you.
[The prepared statement of Mr. Schostek follows:]
Prepared Statement of Rick Schostek, Executive Vice President,
Honda North America
Thank you, Mr. Chairman, Ranking Member Nelson and members of the
Committee. My name is Rick Schostek, Executive Vice President of Honda
North America, based in Marysville, Ohio.
I appreciate the opportunity to update the Committee regarding the
efforts made by Honda with respect to the recall of Takata airbag
inflators since my last appearance before this committee over seven
months ago.
Let me begin by acknowledging that in the past two weeks we have
confirmed that two more customers lost their lives--one in September
2014 and the other in April of this year--as a result of Takata airbag
inflator ruptures that have occurred in our older model vehicles. This
is heartbreaking, and a painful reminder to us of the reason we
continue to urgently accelerate our actions to repair the affected
vehicles. But of course the real pain is experienced by the families of
the victims. We sincerely apologize to them, and extend our deepest and
heartfelt sympathies.
We are working very hard to solve this problem. During the past few
months, we have been accelerating our efforts to repair vehicles at a
level unprecedented in the history of our company.
This is a reflection of the deep commitment our company has
undertaken to notify our customers and to increase the supply of
replacement inflators available for repairs.
Over and above the required mailed notification to affected
customers, we have pursued new and creative ideas and methods to
encourage our customers to check their vehicle identification number
and recall status in order to increase the rate of response to recall
notifications.
We have enhanced our general recalls website and created a new
microsite dedicated to this issue to keep our customers informed and to
make it easy for them to check their vehicles for open recalls. And our
Customer Relations department is set up to receive calls from customers
seven days a week.
Honda also voluntarily initiated a bi-lingual regional advertising
campaign in March to implore customers to repair their vehicles. This
campaign of radio commercials and full-page newspaper ads, represented
behind me, was designed to grab the attention of customers in the nine
states and two U.S. territories that experience the most consistently
high temperatures and absolute humidity and to encourage them to
immediately check for open recalls and safety improvement campaigns.
We also are using social media channels in a targeted way--
including via Facebook, with good success. Let me add, Mr. Chairman,
that whenever we issue a news release or statement on this matter, we
specifically request that the news media help us spread the word by
directing customers to our recall websites, so they can look up their
VIN and get their vehicle repaired. We have appreciated the news
media's assistance with this effort.
To accelerate the safety actions and increase the supply of airbag
inflators, Honda proactively began searching for alternative supply
solutions to more quickly facilitate repairs of our older model
vehicles. This effort led to agreements with Daicel, Autoliv and TRW
Automotive to provide us with replacement parts in addition to Takata.
As a result of this proactive effort by Honda and the actions taken
by our dealers, in recent weeks, we are averaging more than 50,000
repairs per week. We have asked our dealers to expand service hours and
to never turn away a customer with an affected vehicle. And we require
dealers to check the VIN for every vehicle that comes into their
dealership. To support this policy, in February we initiated a new
system that alerts dealers whenever their staff fails to check the VIN
of a car brought in for service to see if it has an open recall.
We also have reinforced with our dealers Honda's firm policy to
provide affected customers with a loaner or rental car free of charge
while their vehicle is being repaired or if they are waiting for a
replacement part to be delivered. All dealers are authorized to make a
vehicle available to a customer without prior approval from Honda. We
have been actively monitoring the availability of loaner and rental
cars and engaging with our dealers to ensure that they offer such
vehicles so we can meet our customers' needs.
Further, to prevent the possibility that any Takata airbag
inflators under recall can be used as a replacement part, we've been
searching salvage yards nationwide to find and secure recalled
inflators. We have already identified many thousands of inflators from
salvage yards that now never will be installed in another vehicle.
In some markets, we have enlisted a special investigative firm as
part of our effort to contact hard-to-reach owners of older model
vehicles affected by the Takata airbag inflator recalls.
Mr. Chairman, for many reasons, it is particularly difficult to
locate the owners of older vehicles and get the vehicles repaired. When
I testified last November, I suggested that we find a way to tie the
annual state vehicle registration process to a requirement that safety
defects be addressed before completion of vehicle registration.
Subsequently, Ms. Stephanie Erdman, who was injured by a Takata
inflator rupture and who also appeared before this committee last fall,
joined me in writing an Op Ed in Automotive News in support of the idea
of such a registration requirement.
We continue to believe that there is substantial promise with this
approach. I want to thank Senators Markey and Blumenthal for
introducing S.617, the Repairing Every Car to Avoid Lost Lives Act--the
``RECALL'' Act. I recognize that there are a number of issues about
this concept that require further discussion. But I am convinced that
this is the single most significant step we can take to achieve what we
all want to accomplish, and that is a 100 percent repair rate. Our
company stands ready to work with the Congress to help find a path
forward.
Even as we look at new, long-term solutions to improve recall
completions, we remain focused on the needs of our customers today. And
we are fully mobilized on the effort to complete the recalls and safety
improvement campaigns associated with Takata airbag inflators.
Again, I very much appreciate the opportunity to appear before the
Committee today, and I will be happy to address your questions. Thank
you.
The Chairman. Thank you, Mr. Schostek.
Mr. Kennedy, NHTSA has urged Takata to get replacement
inflators into vehicles with potentially defective airbags as
quickly as possible even if the root cause has not yet been
identified and those replacements may have to be replaced again
some years down the road.
We are all concerned this very serious safety issue has
persisted for way too long. And eight people have died;
numerous others have received serious injuries. Takata has been
looking at this problem for several years. We need to know why
this happened and make sure it doesn't happen again.
So tell me what Takata is doing to find the root cause.
Mr. Kennedy. Well, Senator, we have been working with a
number of avenues to get to root cause. As you have mentioned,
we have been working on this for a number of years. We have
been working with the Fraunhofer Institute from Germany, who is
the leading expert in the world on propellants and pressure
vessel designs.
We have learned much, especially in the last 6 to 8 months,
as to what the root cause of this is. We understand the
mechanism. We understand a number of the factors that cause the
issues. But, as you said, we do not have a definitive root
cause that we can turn on and off.
But, in spite of that, we have gone forward with NHTSA and
the automakers to replace parts because this is in the best
interests of the public safety.
The Chairman. Well, without a root cause, though, we don't
know whether or not the new replacement inflators have the same
defect. So why is it a good idea to put new inflators into cars
that might have the same defect?
Mr. Kennedy. Yes. Well, let me talk about that a little
bit.
Many of the replacement parts are alternative designs; they
are not the same design that was originally used. As I
mentioned, particularly on the driver side, the batwing
inflators were the ones that have caused all of the fatalities
in the field as well as most of the serious injuries. And we
are not replacing with batwings. We will go out and get every
batwing that was ever made, including all of the remedy parts.
And we are also, as Mr. Kunselman and Mr. Schostek have
talked about, we are using alternative inflators from many of
our competitors in order to speed replacement parts out into
the field.
And then we are continuing to work to improve the current
inflators, as Mr. Kunselman mentioned as well, in order to make
them more robust. And part of the consent order requires us and
NHTSA and the automakers to continue to get the parts back and
evaluate the remedy parts to make sure that they are safe.
The Chairman. Will these replacement bags, though--are they
going to be safer than the original equipment, than the
original airbags?
Mr. Kennedy. What we do know is that it takes a
considerably long time for this condition to manifest itself.
Previously, Administrator Rosekind had said 7 to 12 years. So
we know that there is a large increase in public safety and in
the margin of safety by just putting a brand-new inflator in.
And we do know that on some of the passenger-side ones,
there were some manufacturing defects that we have been able to
uncover with all the testing that we have done in the last 6
months. So we feel very confident in the inflators that we are
making today.
The Chairman. Mr. Kunselman, Takata has stated, as you
heard, that its replacement inflators are safe in the interim
but require replacement at a later date. NHTSA also endorsed
this approach.
You have stated that Fiat Chrysler will be replacing all
recalled driver-side inflators with an alternative design by
manufacturer TRW and described TRW's design as permanent, that
customers who receive the TRW replacement will not need to come
back in for another replacement.
Given that we still don't know the root cause for this
defect, why are you so confident that the TRW inflators will
not have to be replaced in the near future?
Mr. Kunselman. In this case, the TRW inflator that we are
replacing--with Takata's help, mind you--it has a track record,
and we are not aware of any issues with its previous use in the
field.
We were fortunate to have an available inflator with the
right characteristics to utilize in our vehicle program that
has a track record, and I am unaware of issues with it in the
past. That explains the confidence.
The Chairman. Yes.
Mr. Kunselman, Mr. Schostek, for our automakers, I am sure
you both recall because we had her in here, Lieutenant
Stephanie Erdman, who was seriously injured by shrapnel from a
defective Takata airbag, testified at our November hearing that
she took her vehicle to a Honda dealership three times without
the dealer informing her that her car was subject to an open
recall. Now, that is pretty incredible. Three times.
And so the question is, you know, what steps have you all
taken since then to work with your dealers? And I know you
described some of this, Mr. Schostek, in your testimony. But
how are you going to give us an insurance that these important
safety recalls have been addressed and assure that recall
information and vehicle safety issues are going to be shared
with customers when they get their cars in and have them
serviced?
Mr. Schostek. Thank you, Mr. Chairman. It is an important
question, and it is on our minds constantly, as well. We have
more than 1,200 Honda and Acura dealers in the United States,
and we are working hard with them.
We have done a number of things since we last were here in
November. As I mentioned, we have initiated a new report that
flags if a dealer neglected to check a VIN when a customer came
in.
Moreover, we have had face-to-face meetings with our
dealers. We have zone managers and district managers, and they
have personally visited every dealer and talked to each dealer
about the importance of checking for open recalls. We have
periodic regional meetings of our dealer principals. We have in
the last several months reinforced again that obligation.
Mr. Chairman, there is sometimes turnover at a dealership.
We need to continue to make sure that education is well
understood, make sure that the dealer principals understand,
the owners of the dealerships understand that this is our
expectation of them and that we are going to check every one of
these VINs.
So we have taken multiple efforts already, and we will do
more to continue to remind them of their obligation.
The Chairman. Mr. Kunselman, do you have anything to add to
that?
Mr. Kunselman. Yes, I would reiterate, many of the same
points that Mr. Schostek highlighted we are doing, as well,
with respect to informing the dealer of their responsibility.
I would add to it something that he also mentioned earlier.
We have made sure that the technology is also there to make
this automatic step in the process. When a vehicle rolls into
the service bay at a dealer, in most cases in an automated
fashion the vehicle uploads the information to the service
provider's screen, and the service provider is immediately
flagged of open recalls, and the service provider goes out of
their way to schedule that activity on that visit or on an
immediately subsequent visit.
So, in addition to the reminders of responsibility, the
urgency, we are making sure that the technology exists to make
this an automatic step in the process, so it is not left to
human hands, but the machine can point this out to their
service provider.
The Chairman. Yes. Thank you.
Senator Nelson?
Senator Nelson. Would you all hold up that photograph,
please?
This is a picture of a massive explosion in 2006 in your
Mexico plant. It was so massive that it blew out windows a
kilometer away.
This plant used the ammonium nitrate propellants to make
airbag inflators; is that correct?
Mr. Kennedy. Yes, sir, that is correct.
Senator Nelson. And, in your written response to our
committee's November letter, the company said that the
explosion was caused by, quote, ``improper storage of
propellant scrap.'' Is that right?
Mr. Kennedy. Yes, sir. Yes, Senator, that is correct.
Senator Nelson. Is that the type of concern that your
safety audits were intended to identify?
Mr. Kennedy. One of them, yes, sir.
Senator Nelson. Then why would Takata decide to halt these
audits for financial reasons?
Mr. Kennedy. Yes, I believe you are referring to the report
that was issued yesterday by the staff of the Committee. I
think that misrepresents exactly what happened, sir, and, if
you will allow me, I will explain that.
Senator Nelson. Certainly.
Mr. Kennedy. What that was referring to--first of all,
there are a number of safety and quality audits that are done
on the products. The audits that were referred to in that e-
mail were not the safety and the quality audits on the
products, first of all. Because I think that was implied or
inferred from the report.
Second, the only thing that was suspended was the
participation of people from other regions of the world. We
held the local safety audits. We held the local quality audits.
They were all done on schedule, and they were completed. The
only thing that e-mail was referring to was the participants
from other parts of the world were not to be included in the
audit.
Senator Nelson. All right. But I am trying to get at this.
Hasn't Takata blamed the defective airbags on how your plants
handled the ammonium nitrate propellants and how your plants
assembled the inflators?
Mr. Kennedy. There were some of the earlier recalls that I
believe were announced in 2008-2009 where we identified
manufacturing defects that included the pressing of propellant
disc as well as exposure to humidity during the process.
Senator Nelson. So the answer is yes. So if you are saying
that these pyrotechnic handling problems had to do with the
safety of the inflators, wouldn't you have had a clue in 2006
when that happened?
Mr. Kennedy. Absolutely. Absolutely, we did. We had issues
at the plant where material, scrap material, was mixed, and
that is what led to that particular incident.
Fortunately, no one was injured in that incident, other
than I think someone sprained their wrist walking out the door.
So we completely cleared the plant. No one was injured, no one
was hurt in that particular thing.
And we revised a number of our safety and handling
procedures following that. They were completely redone after
that.
Senator Nelson. And yet, knowing that something is going on
here, it is 9 years later----
Mr. Kennedy. Yes, sir.
Senator Nelson.--and now we see.
Now, explain this batwing design and why you think that is
the culprit.
Mr. Kennedy. Well, the batwing design is just--it is a name
the engineers came up with to describe the shape of the
propellant wafer that is inside the driver airbag inflator.
There is really nothing about it other than that.
Senator Nelson. The propellant that caused that explosion?
Mr. Kennedy. It was one of the--it was the mixing of
different types of propellant and energetic materials that led
to that particular incident.
Senator Nelson. Did it occur to you back in 2006 with this
that humidity might have had something to do with it?
Mr. Kennedy. I haven't reviewed the report, and I don't
remember it from that long ago, Senator. But I don't recall the
humidity was an issue in that particular incident at the
facility.
Senator Nelson. What about----
Mr. Kennedy. I can double-check that to be sure and get
back with you, but that is my recollection.
Senator Nelson. Well, what about all these deaths in the
South? Do you think humidity is one of the contributing
factors?
Mr. Kennedy. Yes, Senator, we do. The report from the
Fraunhofer Institute has concluded that they think it is a
multifactor combination of age, exposure to high absolute
humidity, and high temperature.
Senator Nelson. Then how do you explain the southern
California, where there is a mild temperature, death?
Mr. Kennedy. Well, that is why we are continuing to look
into the issue. We haven't dropped it. We have experts from
Penn State. We have experts from Georgia Tech. We have the
Fraunhofer Institute. We are working with a vast array of
experts in this field, and we are continuing to investigate to
try to run it to ground so we know exactly what happened.
But that is why we decided to act, with NHTSA and the
automakers, to go get these parts now. It is the right thing to
do for the public's safety.
Senator Nelson. Would you want your daughter to drive a
vehicle with a Takata airbag that you had replaced the batwing
ammonium nitrate?
Mr. Kennedy. The car that my wife and children drive in
every day uses one of these ammonium nitrate inflators.
Senator Nelson. Did you replace the batwing?
Mr. Kennedy. It was not--it was on the passenger side.
Senator Nelson. Is that the only place that it is replaced,
on the passenger side?
Mr. Kennedy. Batwings are just a driver-side design. It is
not used on the passenger side at all. It is purely a driver-
side issue.
Senator Nelson. So you are attributing the batwing design
to part of the defect.
Mr. Kennedy. That is what the data and the testing has
shown. All of the fatalities and most of the serious injuries
have involved the batwing driver inflators. That is why we have
agreed to go get 100 percent of those back from the field.
Senator Nelson. Then I didn't understand your answer, that
you suddenly jumped to the passenger side.
Mr. Kennedy. Well, you asked me if I would--maybe I
misinterpreted your question, Senator. I am sorry.
Senator Nelson. If your daughter were driving the
automobile that you had replaced the batwing design in the
driver's seat----
Mr. Kennedy. I would have no issue with that at all,
Senator. None.
Senator Nelson. Well, I will tell you, there are a lot of
consumers that would. How do you think that the consumers can
feel that this thing is fixed?
Mr. Kennedy. Well, that was why--again, sticking with the
batwing on the driver side--that is why we have agreed to go
replace every one of these, to go get the parts and get them
out of the field. And a lot of people have talked today about
the efforts to do that.
And that is really one area where we, as an industry and a
government, need to concentrate, is to get the parts out of the
field once there has been a defect analyzed and declared.
Senator Nelson. Mr. Kunselman, apparently you don't feel
confident enough that it is fixed. You have gone to a new
airbag manufacturer. Tell us about that.
Mr. Kunselman. Yes, thank you.
Again, as I stated, we were fortuitous in the ability to
identify an alternative that would perform appropriately in our
vehicle, given the demands of the fill rate and size of the
airbag. And so we did quickly move here to gain confidence that
this would be a permanent solution, even in the absence of root
cause, not understanding what ultimately might happen. This is
why we took this path.
Senator Nelson. May I regurgitate your words, and you tell
me if this is what you just said?
We wanted a clear path to greater confidence, so we went
with another manufacturer.
Mr. Kunselman. That is correct.
Senator Nelson [presiding]. OK.
Thank you, Mr. Chairman.
Senator Blumenthal?
Senator Blumenthal. Thank you, Senator Nelson.
Thank you for being here today, all of you.
Mr. Kennedy, you have been with Takata for only about 3
years, correct?
Mr. Kennedy. No, sir. I have been with Takata just over 10
years.
Senator Blumenthal. Ten years.
Mr. Kennedy. Yes, sir.
Senator Blumenthal. Sorry. So you were with the company
back in 2005.
Mr. Kennedy. Yes. I started in December 2004. Correct.
Senator Blumenthal. I would like you to commit, as
Executive Vice President of this company, that Takata will
establish a compensation fund, similar to the one that GM
established.
Mr. Kennedy. Yes, I haven't been involved in that, of the
recall, at this point, sir, so I can't do that. I will
certainly take that back to our Chairman and to our team and
discuss that and get back with you on that. But I am not in a
position today to commit to that, sir.
Senator Blumenthal. Don't you run the company's North
American operation?
Mr. Kennedy. I have responsibility for certain aspects in
North America. I am responsible for our customer activity,
including sales and marketing; engineering, application
engineering; program management; some of our core engineering,
not related to inflators but core engineering on other
projects; as well as some of our IT and communications.
Senator Blumenthal. Well, I am just a country lawyer from
Connecticut, but it sounds like you run this company in North
America.
Mr. Kennedy. I report to an executive committee and a
president of North America. So I do not run all aspects of the
North American operation, sir.
Senator Blumenthal. How soon can you come back with an
answer about a compensation fund?
Mr. Kennedy. I would think in the next--would 4 weeks be
sufficient, sir?
Senator Blumenthal. How about the next 2 weeks?
Mr. Kennedy. Two weeks? Yes, sir.
Senator Blumenthal. My view is that Takata is every bit as
responsible for the 8 deaths found so far as GM is for the 117
deaths and counting.
And the number eight is still, as of today--the
compensation fund that you should establish, in my opinion, is
likely to disclose additional deaths that resulted from this
defective product. Would you agree?
Mr. Kennedy. I think it is--I would agree that it is
probably likely, as many of these parts are still in the field.
Senator Blumenthal. In fact, let me show you one of those
parts. This is a Takata inflator that caused the explosion in
this airbag that caused these holes. It didn't shred the
airbag, but the shards that came through the airbag, caused by
the explosion--and you can see the results of that explosion--
piercing this metal, and you can see where the shards,
emanated, could well have caused the kinds of deaths that we
have seen eight times so far, demonstrated eight times so far.
Correct?
Mr. Kennedy. Yes, sir. And, again, I just want to repeat
how deeply sorry we are for all of the pain and suffering we
have caused.
Senator Blumenthal. And I am not challenging whether you
are sorry. I believe sincerely that you are. My question is, in
replacing these batwing propellants, have you also replaced the
chemical, ammonium nitrate, that was used in these batwing
propellants?
Mr. Kennedy. Some of the replacement parts that we are
using for those batwings still include a phase-stabilized
ammonium nitrate. But it is a completely different design that
we have not experienced issues with.
Senator Blumenthal. You haven't experienced issues with it
because you haven't finished testing.
Mr. Kennedy. Well, they have been in the field for a number
of years, they have been used in a number of different
vehicles, and these alternative designs have not seen issues.
Senator Blumenthal. Why are you continuing to use ammonium
nitrate, when it was very likely a contributing factor, if not
the factor, in causing these exploding inflators?
Mr. Kennedy. Well, first, I respectfully would disagree
that it is the issue with causing the inflator ruptures. It
could be one of the potential factors in it.
But phase-stabilized ammonium nitrate has many, many
advantages, especially over the materials that we were using
prior. The industry was using azide prior, and azide is highly,
highly toxic. And some of the other materials that we had used
had issues with handling and manufacturing because they were
very, very energetic in a normal state. Phase-stabilized
ammonium nitrate, if you put it on the table and put a torch on
it, you can't even light it.
It is very safe, and it is very clean. It burns very, very
efficiently, which, again, addressed some of the concerns that
were in the field with previous propellants that were causing
respiratory issues with many, many drivers.
Senator Blumenthal. But the problem is that it becomes
unstable when it becomes moist or accumulates moisture,
correct?
Mr. Kennedy. Well, it is not a phase-stabilization issue.
This is what everyone was concentrating on at the beginning,
that it is an issue with the phase stabilization of ammonium
nitrate. The conclusions that the Fraunhofer Institute have
come to is this is not a phase-stabilization issue. We cannot
even measure the loss of phase stabilization that has occurred
in these parts.
It is not a phase-stabilization issue. This is a much more
subtle issue that takes many, many factors over many, many
years. And sometimes in certain vehicles--sometimes in one
vehicle it will perform perfectly well. The same part in
another vehicle and the same exact area will have issues.
So there are a number of things we don't understand. But
that is why we felt it was time to act and get the parts out of
the field, so we could continue this analysis of the parts.
Senator Blumenthal. You are continuing to use ammonium
nitrate but with a different design?
Mr. Kennedy. We have many designs that use phase-stabilized
ammonium nitrate. I think, of the six that are involved in
this, most are out of--I think five of the six are out of
production. There is another one that will be out very shortly.
So the ones involved in these particular issues and these
particular recalls are not in serial production any longer.
Senator Blumenthal. Looking forward, are you replacing the
batwing propellants or inflators out there now with inflators
that have ammonium nitrate?
Mr. Kennedy. Some of them are still using--it is a
completely different inflator design, a completely different
propellant design, but some of them do still use phase-
stabilized ammonium nitrate.
But, as Mr. Kunselman said, we are--I think, in May, 50
percent of the inflator kits that we sent included inflators
from our competitors. By the time we get to December, 70
percent are estimated to be with outside inflators.
So most of the replacements that we are having are
alternative propellant designs. But even the ones that aren't
are using later versions of ammonium nitrate, for the most
part, at this point.
Senator Blumenthal. Have you tested these new designs?
Mr. Kennedy. Yes, sir, we have.
Senator Blumenthal. How rigorously?
Mr. Kennedy. Very rigorously. And most of them have been in
production for a number of years.
Senator Blumenthal. Have they shown signs of moisture?
Mr. Kennedy. Not to my knowledge, sir.
Senator Blumenthal. But you are continuing to use ammonium
nitrate.
Mr. Kennedy. Yes, sir. We are continuing to use phase-
stabilized ammonium nitrate.
Senator Blumenthal. And, Mr. Kunselman, that is one of the
reasons why you are going to TRW, correct?
Mr. Kunselman. Thank you.
As I stated, the path to the TRW inflator was fortuitous
because it fit the inflation characteristics in our car and
provided me with, absent a root cause, the most confidence that
it would be a permanent solution.
Senator Blumenthal. Well, I think that is a very genteel
and nice way of saying you want a safe propellant and so you
are going with a company that does not use ammonium nitrate.
Correct?
Mr. Kunselman. That is accurate.
Senator Blumenthal. Mr. Kennedy, your company filed for a
patent in 2006 that, in effect, demonstrated the knowledge of
moisture's effect on ammonium nitrate, correct?
Mr. Kennedy. I am sorry, I am not involved in the patents
on inflators, Senator, but if you give me a little more
information, I might be able to comment.
Senator Blumenthal. I will give you information that is
available to all of us, which is that your company explained
that moisture could seep into the inflator and might cause the
propellant to become more unstable. It said that numerous
times.
It filed for a patent back in 2006 that demonstrated it was
aware of that problem in that year, correct?
Mr. Kennedy. Well, again, I am not familiar with the patent
you are referring to, but I can tell you that moisture seepage
into any inflator is a known issue, and moisture in particular
with ammonium nitrate is a known issue. And that is why we have
addressed that in our designs and in our manufacturing
processes.
Senator Blumenthal. Are you familiar with the chemical
known as desiccant?
Mr. Kennedy. Yes, sir. Yes, Senator, I am aware of
desiccant.
Senator Blumenthal. At what point did Takata begin to add
desiccant to its----
Mr. Kennedy. I believe it was--it was in that timeframe
that you had mentioned there. I think 2007, 2008.
Senator Blumenthal. And the reason it added desiccant was
to reduce the effects of moisture in making the ammonium
nitrate more unstable.
Mr. Kennedy. Well, there were a number of changes that were
made--we call them X series inflators. There was a number of
design changes that were made in the X series inflators in that
timeframe. The propellant formulation was changed, desiccant
was added, a number of the other components were updated. It is
just part of what--in Japan, they call it ``kaizen''; it is
continuous improvement. We are constantly looking at ways to
improve the parts.
And in those particular parts, on the passenger side we
were able to shrink the size of the inflator by 10 millimeters,
which saved weight and saved space in the vehicle that helped
meet CAFE requirements and helped our customers meet their
goals of weight reduction and performance improvements.
Senator Blumenthal. Continuous improvement?
Mr. Kennedy. Yes, sir.
Senator Blumenthal. Your term?
Mr. Kennedy. Yes, sir. ``Kaizen,'' that is what the
Japanese call it.
Senator Blumenthal. ``Kaizen''----
Mr. Kennedy. Yes, sir.
Senator Blumenthal.--in Japanese, sounds to me like a
euphemism for trying to avoid exploding airbags.
Mr. Kennedy. No, sir, not at all. I disagree. Like I said,
it was a continuous improvement to improve the product. I think
every manufacturer of every product is----
Senator Blumenthal. How did it improve the product, besides
avoiding the propellants exploding as a result of moisture?
Mr. Kennedy. Well, as I said, there were a number of
changes that were implemented into the inflators at that time.
The addition of desiccant was one of them. It allowed us to
make the inflators smaller; it allowed us to make the inflators
lighter. I mean, those were all things that we are always
looking to do.
Senator Blumenthal. Isn't it fair to say that one of the
reasons for that continuous improvement was the presence of
moisture inside the inflator?
Mr. Kennedy. Well, as I said, moisture in any inflator is a
problem. And every inflator has leak paths that allow moisture
in, every inflator that is out there. I mean, at the end of the
day, an inflator is full of holes in order to let gas come out.
So if there are holes to let gas come out, there are holes to
let moisture in. So it is an issue that every inflator
manufacturer deals with.
Senator Blumenthal. Your new inflators, have they shown
evidence of moisture?
Mr. Kennedy. I am not sure if I can answer that completely,
Senator, because I don't know that we have gotten parts back
from the field on these newer ones and looked at that on every
one of them. So I can't----
Senator Blumenthal. I thought your testimony here today was
that they have been rigorously tested.
Mr. Kennedy. They have. They have.
Senator Blumenthal. But you don't know whether moisture has
been found in them.
Mr. Kennedy. I don't know the answer to that specific
question, Senator.
Senator Blumenthal. Where I am going here, Mr. Kennedy,
essentially, is that there is a lot of evidence that ammonium
nitrate is a root cause and that there may well need to be a
recall of the recalls and continuing problems.
GM at least redesigned and remanufactured the defective
product that caused deaths on the road as a result of the
defective ignition switch. But the continued use of ammonium
nitrate leads me to believe there may well need to be a recall
of the recall parts.
Mr. Kennedy. Well, that is why as part of the consent order
we have agreed to continue to test the remedy parts. We have
continued all of our efforts, internal and external, with the
consortium of OEMs that Mr. Kunselman mentioned, with
individuals OEMs, automakers, that are doing their own testing.
We have not stopped anything, Senator, in relation to this
issue. We are continuing to look, and we are continuing to look
everywhere, to make sure that we understand this issue.
Senator Blumenthal. Good.
Have you issued--I just have one more question--two more
questions.
The Chairman [presiding]. Well, yes, we need to keep
moving, Senator.
Senator Blumenthal. And I have been actually asking a few
extra questions because I knew my colleague Senator Klobuchar
was going to be here.
Senator Klobuchar. Oh, yes. You are so kind. Thank you.
Senator Blumenthal. Let me ask Mr. Schostek: Would you
commit to supporting a bill that I have offered, S. 900, that
requires used car dealers to repair any outstanding safety
recalls prior to selling or leasing them?
Mr. Schostek. Senator Blumenthal, we do support that
concept. Right now, Honda dealers sell both new cars and used
cars, and we expect those recalls to be taken care of before
the used cars are sold. They may have a product from another
manufacturer on the lot; similarly a Chrysler dealer and so
forth. And then there are independent used car dealers.
We would like to discuss about the need to ensure the
responsibility of the OEM to make sure that repair is completed
and who is effecting the repair. But, most definitely, sir, we
support the concept.
Senator Blumenthal. Because I know you have reached out to
two of the Honda owners who were affected here, but you
couldn't contact them because they had bought the car used,
correct? Carlos Solis and Hien Tran both died as a result of
this product.
Mr. Schostek. Indeed, Senator. The unfortunate aspect of
the fatalities that have been experienced in our vehicles are--
these are older-model vehicles; they have tended to change
hands, sometimes through used car dealers, independent used car
dealers, and we have not been able to contact the appropriate
parties. So we definitely support the concept.
Senator Blumenthal. Thank you.
Thanks, Mr. Chairman.
The Chairman. Senator Klobuchar?
Senator Klobuchar. Thank you very much, Mr. Chairman. I
will be brief here.
Mr. Kennedy, last November, as evidence emerged that the
airbags might be susceptible in regions outside of high-
humidity climates, I called on an expanded recall. In December
of last year, Takata responded to NHTSA's recall request letter
stating that it firmly believed that the data and currently
available information did not support a nationwide recall.
What information did Takata have last month that it didn't
have earlier that triggered the expanded recall?
Mr. Kennedy. Senator, that is a great question, and I would
be very happy to answer that.
We have much, much more test data now than we had before.
We have completed--I checked last night, and, as of last night,
over 57,000 deployment tests, most of those in the last 6
months, that have really helped us to understand where these
issues are and what is causing them.
And we don't have definitive root cause, but also in that
time-frame we had a 2-day meeting at our inflator facility,
where we brought all of the NHTSA people in and their experts
and we had our third party, Fraunhofer, report directly to
them. It was not filtered by Takata at all. We did the same
thing with the OEMs affected.
We have continued to work with a number of other outside
experts, as I mentioned earlier: Penn State University, Georgia
Tech----
Senator Klobuchar. But it is just that this goes back to,
what, 2006? And I am glad you have done this, but it seems like
such a long period of time, and we have heard so many different
explanations for the cause of the defect. Why the different
explanations, and why did all of this take this long, nearly 10
years, to get done?
Mr. Kennedy. Well, Senator, there has been a lot done in
those 10 years. There has been a number of recalls that have
been issued, starting I believe in 2008 was the first one. So
we have participated and supported multiple recalls in that
timeframe.
And it was really just on this latest issue that really got
started in 2013. End of 2013 was when the first incident
outside of previous recall populations occurred. And----
Senator Klobuchar. OK, so--go ahead.
Mr. Kennedy. I am sorry.
Senator Klobuchar. Now with this major recall that you have
decided to undertake, with a lot of prodding I will say, and it
is going to involve, you know, a lot of vehicles, how do you
prioritize these vehicles in terms of getting fixed? Is it
geographically? Is it by the age of the vehicle? How are you
going to triage this?
Mr. Kennedy. Yes, that is, again, a very good question and
one that was contemplated in the defect information reports.
And it varies by design somewhat. The driver-side ones,
where we have had the most issues in the field, those are being
prioritized based on location. And that would be a location of
where they are currently registered, originally registered, or
ever registered. Some of the other ones are prioritized by age.
And, as Administrator Rosekind mentioned in his testimony,
that is part of the consent order that we have agreed to. They
call it the coordinated remedy. And we will be working with
NHTSA and all of the automakers in order to do that
prioritization and to increase supply so we get the right parts
to the right owners at the right time.
Senator Klobuchar. And then how many replacement parts is
Takata producing every month?
Mr. Kennedy. As of a couple days ago, we passed 5 million
replacement kits. I think this month we will probably produce
close to 700,000----
Senator Klobuchar. And how many are there going to be total
that you need to have?
Mr. Kennedy. Well, the total replacement--again, the
numbers of a little bit elusive, but somewhere in the 32
million range.
Senator Klobuchar. Wow.
Mr. Kennedy. That is vehicles that were ever manufactured,
so some of those still may not be on the road.
Senator Klobuchar. OK. So how long do you think it will
take to do that?
Mr. Kennedy. Well, we are going to be at a million units a
month here very shortly. We have already done 5 million. That
32 million assumes that actually all of those vehicles are
still on the road, and we know vehicles that are 15 years old,
a number of those are not on the road still. So it will be
somewhat less than that.
Senator Klobuchar. OK.
Just one last question here, because I want to keep in my
time limit.
Mr. Kunselman, Mr. Schostek, how many affected Honda and
Chrysler vehicles have received replacements?
Mr. Kunselman. Have received replacements?
Senator Klobuchar. Yes.
Mr. Kunselman. On the driver side, we had just shy of
50,000 units that were replaced with a like bag. And we have
now implemented a recall where we will replace with a TRW
inflator.
Senator Klobuchar. OK.
Mr. Kunselman. So those are just in its infancy, maybe
1,000 units so far. It was just released on June 8.
Senator Klobuchar. OK.
Mr. Schostek?
Mr. Schostek. Yes, Senator, we have replaced nearly 2
million inflators, Takata inflators, in our vehicles.
Senator Klobuchar. OK. Very good. So it sounds like there
are going to be a lot more. They are not all your vehicles,
obviously, but more to come.
All right. Thank you very much.
The Chairman. Senator Nelson has one question to ask, so he
will be back in here momentarily.
So, until he gets back, let me ask our manufacturers if
your companies or other auto manufacturers are looking into
what role, if any, the vehicle design may have played with
regard to persistent high humidity affecting the performance of
the airbag inflators. And, if so, what have you learned?
Mr. Schostek. Mr. Chairman, I will answer that first. You
are referring to the report recently that Takata is mentioning
a theory about the vehicle design. I think this is mainly on
the passenger side, not the driver side, where this theory of
theirs is grounded.
We have not received much information from Takata about
this vehicle design theory, and when we do, we will be happy to
look into it. But we have not begun a study of our own on that
idea.
Mr. Kunselman. I would reiterate that. We are not doing our
own study on that. We are aware of Takata seeing this trend in
the data and are asking the ITC if they see a similar trend
based on the parts that have been tested coming from the field.
The Chairman. OK.
Senator Nelson?
Senator Nelson. Just one quick question, Mr. Schostek. Do
you think that rental car companies should be prohibited from
leasing vehicles under recall until they are fixed?
Mr. Schostek. Thank you, Senator Nelson.
I am aware of S. 2819, the Rental Car Recall Act, that
would prohibit rental car companies from renting if they had--
we are in support of that concept, Senator. We support the
concept.
The young woman who lost her life in southern California
was driving a Honda vehicle that she rented from an agency in
the San Diego area.
Understand, from our business model, Senator, Honda, we do
not sell to fleets, so we don't sell to big rental car
companies such as Hertz, Avis, and so forth. But, nevertheless,
there are Honda vehicles that end up in rental car inventory.
Our dealers might sell to one of those large rental car
companies, but, of course, the small rental car companies also
might buy our vehicle on the used market.
We strongly support the concept that they should be fixed
before they are rented to a customer. And if that had happened
in the case of the young women in southern California--who, by
the way, we notified the auto auction that owned the vehicle
before the rental car agency bought it, and we also notified
the rental car agency, and neither of them took that repair. It
is to our everlasting regret that that had an impact in this
incident.
Senator Nelson. Thank you.
The Chairman. Thank you, Senator Nelson.
Well, I would just point out that the hearing record is
going to remain open for 2 weeks, during which time Senators
are asked to submit any questions for the record.
Upon receipt, the witnesses are requested to submit their
written answers to the Committee as soon as possible.
I want to thank our panelists, our witnesses here today for
your testimony, and for your responses. It continues to shape
the record that we build with regard to this very important
issue which has had life-and-death consequences for people
across this country. And we want to make sure that we are doing
everything we can to get the accountability and provide,
hopefully, the solutions that will prevent this sort of thing
from ever happening again.
With that, the hearing is adjourned. Thanks.
[Whereupon, at 12:34 p.m., the hearing was adjourned.]
A P P E N D I X
Response to Written Questions Submitted by Hon. John Thune to
Hon. Mark R. Rosekind
Question 1. Does NHTSA have a way to track how many visitors have
been to safercar.gov and, on average, how many visit the site every
day? If so, what are those numbers?
Answer. Yes, NHTSA can track how many visitors have been to
safercar.gov. For example, the three month period of April to June,
2015 averaged approximately 132,000 visits per day.
a. How does this compare to the use of manufacturers' sites for
safety recall information?
Answer. NHTSA does not collect or have information regarding visits
to manufacturers' websites.
b. Does NHTSA have any information on what percentage of Americans
know about safercar.gov?
Answer. Based on qualitative analysis from focus groups conducted
for consumer outreach in support of the Office of Defects
Investigation, the agency has found that generally Americans have a low
awareness of safercar.gov. In order to increase awareness of
safercar.gov NHTSA has completed and/or is planning to execute the
following:
Direct consumers to safercar.gov from all public-facing
information, e.g., ads, videos, advisories;
Promote safercar.gov through the safercar mobile app; and,
Launch a national consumer awareness campaign to increase
the submission of complaints as well as recall compliance and
use of the VIN Look-Up Tool.
Question 2. In your testimony, you mention that 32 million vehicles
have been recalled due to defective Takata inflators. Some have raised
concerns that this number may include duplications, for instance, if a
particular vehicle is subject to both the driver side and the passenger
side recalls. How did NHTSA calculate this number and verify its
accuracy? Is this still the number of vehicles subject to recall as of
today?
Answer. The original estimate of 32 million vehicles was based on
information provided by Takata. In an initial effort to verify this
figure NHTSA tabulated the total number of recalled inflators from all
the Takata related recalls, and the results were consistent with
Takata's estimate. At the time of the hearing, this was the best
available information.
NHTSA recognized that the estimate would need to be refined once
the automakers determined the actual number of inflators and vehicles
involved by VIN. As part of the Coordinated Remedy Program, NHTSA
requested by July 9, 2015 a detailed breakdown of the recalled vehicle
data by make, model and model year. In reviewing this data, Takata
reported that its original estimate included inflators slated for
foreign markets. In addition, NHTSA finally was provided more specific
information indicating the number of vehicles containing both defective
driver and passenger side inflators. Using the automakers' detailed
responses NHTSA has determined that approximately 23.4 million total
inflators in approximately 19.3 million vehicles are affected. These
figures include all prior Takata recalls from 2008-2015. The attached
chart identifies the breakdown of the recalled inflator position--both
driver air bag (DAB) only, or passenger air bag (PAB) only, by each
automaker.
a. What is the number of vehicles subject to both the defective
driver side and passenger side air bag recalls?
Answer. Based on the most recent data acquired through the
Coordinated Remedy Program the number of vehicles subject to both
driver and passenger recalls is approximately 4.1 million.
Attachment (Question 2)
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Question 3. NHTSA's Workforce Assessment states that the ``New
Paradigm'' will require $89 million in funding, which apparently
doesn't include the additional 380 new full time equivalent employees
(FTEs) for the Office of Defects Investigation alone. What is the
funding request estimate including costs for the requested increase in
FTEs?
Answer. The Workforce Assessment responds to a previous commitment
to the U.S. Department of Transportation's Office of Inspector General
to assess NHTSA's workforce in light of the breathtaking advances in
vehicle technology. The Workforce Assessment was not intended to match
the President's FY 2016 budget, which was issued before the Workforce
Assessment was completed. Rather, the Workforce Assessment is a
comprehensive examination of the defects investigation system we need
to build, and can build incrementally with resources from Congress that
commits to a vehicle safety system as robust as those that keep our
skies and railways safe. The total cost would be approximately $149
million. This estimate includes $89 million identified in NHTSA's
Workforce Assessment and $60 million for the estimated cost for the 380
positions, which is based on an average cost of $157,000 (includes
salaries and benefits) for each FTE.
Question 4. NHTSA's Workforce Assessment was conducted pursuant to
a 2011 recommendation by the Department of Transportation Office of
Inspector General (OIG). NHTSA hired an outside contractor to conduct
the assessment, which began in July 2013.
a. When did NHTSA receive the contractor's written assessment?
Answer. NHTSA received the contractor's final written assessment in
February 2014.
b. How much did it cost the agency to conduct this assessment?
Answer. The contractor was under contract to perform multiple
tasks, including the workforce assessment. The cost of the entire
contract was approximately $424,000. The cost to conduct the workforce
assessment was about $147,000.
c. Why did it take until June of 2015, four years after the OIG
recommendation, for NHTSA to issue this assessment?
Answer. The workforce assessment was initiated prior to the GM and
Takata recalls. Therefore, completion of the assessment was extended
due to additional work conducted by the agency, including a business
assessment, to produce a more comprehensive evaluation. While the
contractor's final written assessment met the minimum contract
requirements the final product did not fully capture all the current
and future business needs of ODI or other offices that directly support
the defects investigation program. As a result, the report was reworked
to reflect lessons learned from these events in order to adequately
reflect workforce needs given the large increase in recalls and
consumer complaints.
______
Response to Written Question Submitted by Hon. Bill Nelson to
Hon. Mark R. Rosekind
Question. Administrator Rosekind, you said at the hearing that
NHTSA is currently implementing 44 actions to ensure that ODI does not
miss the next GM ignition switch defect or the next Takata airbag
crisis and that the list would be provided to the Committee. Please
list the 44 actions.
Answer. NHTSA continuously seeks to enhance our processes and
procedures, as demonstrated by the attached list of process
improvements and our recently published Path Forward report. The list
of process improvements continues to grow and now includes 45 distinct
actions implemented and initiated.
National Highway Traffic Safety Administration
Defect and Recall System Improvements
The following improvements in NHTSA's defects and recalls system
have been implemented or initiated in response to a variety of efforts.
These include the 2011 Office of the Inspector General Report, NHTSA's
Path Forward and Workforce Assessments reports, and the 2015 OIG
Report. These improvements include actions that directly address 10 of
the 17 2015 OIG recommendations.
Oversight of System Improvements--As recognition of the need for
ongoing evaluation and improvement, NHTSA devised a mechanism for
tracking implementation and applying improvements Agency-wide.
1. NHTSA's Risk Control Innovations Program will monitor, track and
review system improvements and apply the methodology and
enhancement Agency-wide, where appropriate.
Workforce Assessment and Training--Improving the NHTSA's ability to
identify safety defects and manage recalls requires investments in the
Agency's people as well as improvements to the defect-recall system.
2. NHTSA developed a training plan to assist the organization in
the development of its current and future workforce to ensure
continuity of institutional knowledge, and to ensure that
Office of Defect Investigations (ODI) staff is made aware of
and become proficient in new automotive, investigative, and
vehicle safety technologies.
3. At OIG's recommendation, NHTSA hired a contractor to conduct a
workforce assessment to determine the number of staff required
to ensure that ODI met its objectives and determined the most
effective mix of staff to improve defects analysis in the
future. In November 2014, ODI conducted its own workforce
assessment to supplement the contractor's efforts in order to
address the staffing and resource needs required to meet
growing defects analysis needs in light of several high profile
recalls. This effort also strategically assessed the needs and
expectations of the defects program, and set a vision of how
NHTSA will improve its defects management process.
Improved Tracking and Documentation--NHTSA implemented processes
and documentation requirements to improve the tracking of defect issues
and investigations, to provide consistent rules for reconsideration,
and to provide records of decisions that can inform future
investigations. NHTSA is currently establishing new documentation
requirements in response to the 2015 OIG recommendations.
4. NHTSA added a new process to require its investigators to
provide office director briefings prior to exceeding the ODI
guidance for investigation timelines. The briefing must include
justification for the additional time along with an action plan
to bring closure to the issue.
5. NHTSA implemented a system to track complaints relevant to each
investigation.
6. NHTSA began systemically tracking pre-investigation work.
7. NHTSA created standardized forms and a repository to document
Defects Assessment Panel meetings and decisions.
8. NHTSA created a standardized process and an Investigation
Documentation Checklist for storing evidence and investigation
documents.
9. NHTSA is developing rules that require the defect assessment
panel to revisit an issue if certain criteria are met. This
action responds to 2015 IG Recommendation No. 16.
10. NHTSA is developing a plan to improve reviews of vehicle owner
complaints. This action responds to 2015 IG Recommendation No.
11.
11. NHTSA is developing procedures to improve documentation of the
outcomes of weekly meetings where pre-investigative issues are
discussed. This action responds to 2015 IG Recommendation No.
13.
12. NHTSA is defining appropriate timeframes for opening an
investigation and a process for justifying departures from
these timeframes. This action responds to 2015 IG
Recommendation No. 17.
Improved Information Collection--NHTSA is addressing ways to
improve the quality and the focus of information it receives, and to
streamline the analysis of that data.
13. NHTSA is working on ways to facilitate consumers' provision of
more complete information to the agency through the Vehicle
Owner's Questionnaire (``VOQ'') process, including offering
more flexibility in how consumers can describe their complaint
and making it easier to upload supporting documentation and
pictures related to the complaint. This action responds to 2015
IG Recommendation No. 6.
14. NHTSA has initiated efforts to provide more clarity to
manufacturers about Early Warning Reporting (EWR) requirements.
NHTSA will support manufacturers' efforts to implement best
practices to comply with their obligations to provide complete
EWR data. This action responds to 2015 IG Recommendation Nos.
1, 2, and 3.
15. NHTSA implemented revised procedures for Death and Injury (DI)
reports, requiring manufacturers to provide their opinions and
theories about the cause of an incident or accident. NHTSA is
following up on all reports involving fatalities. In addition,
where related litigation is initiated, NHTSA will require the
manufacturer to provide copies of documents reflecting the
final disposition of the lawsuit.
16. NHTSA is developing a dedicated outreach and reporting system
for law enforcement involved with crash responses as a
communication channel to not only collect information, but give
feedback to the submitter. Based on lessons learned from this
initiative, ODI may also broaden the plan to include
communities such as EMS and insurance adjustors/investigators.
This action responds to 2015 IG Recommendation No. 12.
Improved Collaboration and Assessment--ODI will continue to
leverage expertise from throughout the Agency when assistance is
needed, specifically if research is required or when additional real-
world crash data can inform defects assessments or investigations. The
Agency will be challenging automatic assumptions and request assistance
from manufacturers and suppliers when necessary.
17. NHTSA now has research engineers from NHTSA's Vehicle Research
and Test Center (VRTC) regularly participate in Defect
Assessment Panels.
18. NHTSA hosted an international Enhanced Safety of Vehicles
conference, with a special session on enforcement-related
issues. Nine countries participated in the event, and they
agreed to establish a worldwide network for enforcement
information of mutual interest.
19. NHTSA established a process for determining when a third-party
or the VRTC should be used to verify manufacturer information
or to assist in identifying a potential defect.
20. NHTSA now formally involves VRTC vehicle research engineers in
pre-investigative activities to research unfamiliar or
technically complex potential safety hazards by conducting high
level research and basic tests to better understand these
systems.
21. NHTSA has implemented a number of new initiatives and efforts to
enhance coordination between ODI and other NHTSA crash
investigation programs. For example, the Special Crash
Investigations office (SCI) is now included as an active
participant in ODI's decisions about initiating formal
investigations. This action responds to 2015 IG Recommendation
No. 12.
22. When ODI is monitoring a high-hazard issue but has insufficient
evidence of a possible defect to warrant opening an
investigation, or where something that appears to be an
unlikely explanation has been posited, NHTSA will now reach out
to the relevant vehicle manufacturer (OEM). This communication
will be documented as a pre-investigative notification of
interest, creating a record that NHTSA has informed the OEM of
the issue and reiterating the OEM's responsibility to provide
relevant and timely information about the issue to the agency,
including information critical to the potential safety system
interactions of the issue. This action responds to 2015 IG
Recommendation No. 15
23. NHTSA's Office of Vehicle Safety Research and ODI are working
together to increase and expand meetings with the automotive
industry in order to enhance NHTSA's working knowledge about
new and emerging technologies and the interrelationships
between vehicle systems. Based on these meetings with
manufacturers, NHTSA is developing an additional set of
inquiries to be used during screening and investigating new
safety systems.
24. NHTSA began to specifically request EDR data from manufacturers,
vehicle ``health check'' files, and downloads from any related
sub-modules. NHTSA is currently requesting that automakers
provide detailed information on what additional data is
available on vehicles that could be helpful in assessing
potential safety defects.
25. NHTSA is expanding previous efforts to apply an enhanced systems
safety approach to the analysis of defects, considering whether
one possible defect is a symptom of another system failure.
26. Using the computerized Corporate Information Factory (a suite of
software tools to improve organizational efficiency in
predictive analysis, data visualization, case management,
customer-driven communication, and program planning), NHTSA
continues to increase its efforts to more effectively utilize
and cross-reference Early Warning Reporting (EWR) data, Death
and Injury (DI) reports and inquiries, SCI investigation
reports, and other data from manufacturers and the public that
may provide critical details about incidents and vehicles.
27. NHTSA is developing a common system data standard that is paired
with a centralized database (called the vPIC-List) for
information obtained from manufacturers associated with Vehicle
Identification Number (VIN) requirements and Manufacturer
Identification Requirements.
Improved Enforcement
28. When NHTSA finds that an OEM has failed to meet its obligation
for a timely recall, the agency considers enhanced oversight,
as it has done in recent consent orders for GM and Hyundai. In
addition, NHTSA is exploring mechanisms to have manufacturers
conduct regular audits of their internal processes for finding
potential safety defects, and ensure that failures identified
during these audits lead to consequences appropriate to the
findings.
Improved Outreach to Consumers--Defect identification is only the
first step in an effective recall system. Unless the recalls are
remedied, unsafe vehicles remain on the road and a risk to drivers and
passengers. NHTSA has implemented new and better ways to notify
consumers of defects and continues to identify ways to improve recall
completion rates.
29. NHTSA implemented a subscription service to allow consumers to
receive e-mail alerts when the make and model of their vehicle
has an active recall.
30. NHTSA developed and implemented the SaferCar mobile application
for Apple products that provides real-time vehicle safety
information and allows consumers to file complaints, register
for recall notifications, locate child seat inspection
stations, and search 5-Star safety ratings.
31. NHTSA recently expanded the SaferCar mobile application to
Android phones.
32. NHTSA now requires new, distinctive recall labels on mailings
that notify owners of recalled vehicles or equipment.
33. NHTSA developed a VIN Lookup tool that allows consumers to
search electronically for open recalls on their vehicles using
their VIN number.
34. NHTSA made it possible for Manufacturers to file recall reports
electronically via manufacturer submission portals.
35. NHTSA hosted the first of a series of industry meetings,
Retooling Recalls, where NHTSA will define an issue in need of
collaborative effort and facilitate the sharing of best
practices.
36. NHTSA recently launched a recalls spotlight web page dedicated
to information specific to breaking news and trending recalls.
37. NHTSA created a recalls-specific account on Twitter
(@NHTSArecalls) to alert followers and consumers about vehicle,
tires, car seats, and equipment recalls.
38. NHTSA released a recalls process video educating consumers on
how recalls notices are sent and that recalls repairs are free
of charge.
39. NHTSA will produce a VIN Look-Up Demonstration (July 2015).
40. NHTSA plans to launch a Recalls Consumer Awareness Campaign
(Fall 2015).
a. Messages and Goals of the Campaign include:
i. To encourage consumers to use the VIN Look-
Up tool
ii. To urge consumers to comply with recall
notices
iii. To have consumers sign up for recall
alerts
b. The Campaign will include online advertising and a suite of
informational videos.
41. NHTSA will implement an enhanced e-mail engagement process to
allow consumers who file complaints or sign up for e-mail
alerts to stay informed of news affecting their vehicles. The
existing infrastructure already allows NHTSA to reach consumers
via e-mail with a list of recalls within a given time period.
42. NHTSA revised its current e-mail engagement language to inform
consumer expectations of how complaints will be handled and
what will happen in the event of a vehicle recall.
43. Using analytics tools, NHTSA identified the top online
automotive websites used by consumers as an additional source
of consumer complaints to identify potential defect trends.
They include KBB.com, Edmunds.com, and Cars.com. NHTSA has
built relationships with these and other organizations for
purposes of sharing new vehicle safety content.
44. Presently, manufacturers' defect reports are technically
focused, making them of limited use to consumers, who need this
information most. NHTSA has established a defect report review
process that will ensure that consumers are receiving recall
information in comprehensible plain language and format.
Protecting Confidential Consumer Information
45. NHTSA now requires a second level of review to ensure that
confidential information collected from manufacturers is
redacted prior to web mounting.
______
Response to Written Question Submitted by Hon. John Thune to
Hon. Calvin L. Scovel III
Question. Based on your audit of NHTSA's Defect Identification and
Investigation process, what are the problems with NHTSA's statistical
practices? What could statistical analyses of TREAD Act data provide
that NHTSA's analyses cannot?
Answer. Sound statistical analyses of TREAD Act data could point
NHTSA personnel to the automotive defects most warranting further
investigation. They could do this by identifying which data trends and
outliers are statistically significant, meaning they are unlikely to
have appeared through random variation. This focusing of agency
attention could increase the likelihood of early identification of
safety defects and support efficient use of agency resources.
NHTSA's current statistical analyses cannot achieve these ends
because the agency omits critical steps in standard statistical
practice when analyzing TREAD Act aggregate data. Those steps involve
developing a base case of what statistical test results should look
like in the absence of anomalies, against which actual test results can
be compared. NHTSA calculates results from a variety of tests, but does
not develop a base case against which to compare any of them.
Consequently, agency personnel have no way of knowing which, if any, of
the results from the different tests were unlikely to have occurred by
chance. Instead, they use ad hoc approaches to determining which test
values they consider indicate a defect warranting further
investigation.
Sound statistical practice also involves periodically assessing the
predictive performance of the analytical methods used. This enables
adjustment and refinement of the methods, leading to improvements in
accuracy over time. NHTSA has not checked the ability of its analyses
of TREAD Act aggregate data to identify safety defects since their
implementation, let alone addressed issues of their accuracy.
______
Response to Written Questions Submitted by Hon. John Thune to
Kevin M. Kennedy
Question 1. In your testimony, you stated: ``In addition to
supporting these ongoing testing efforts, we are continuing to support
the work of the independent Quality Assurance Panel, led by former
Secretary of Transportation Samuel K. Skinner, to ensure that best
practices are in place for the production of safe inflators. We are
committed to adopting the recommendations his panel puts forth, and
sharing the findings of the report with you and with the public.''
Question 1a. What is the progress of the Quality Assurance Panel to
date?
Answer. The Quality Assurance Panel has completed reviews of, and
site visits to, Takata's facilities in Armada, Michigan, Moses Lake,
Washington, and Monclova, Mexico. The Panel is planning to visit
Takata's facilities in Japan in August 2015. Takata has assisted, and
continues to assist, the Panel by regularly providing requested
information and producing relevant personnel for interviews. Takata
understands that the full Panel has met on several occasions and plans
to meet regularly on an ongoing basis to review collected data,
evaluations and recommendations.
Question 1b. Have you changed any production practices since the
recalls began? If so, what and when?
Answer. Takata continually acts to strengthen and improve its
manufacturing and production processes. However, because the Panel has
to date not issued a report or recommendations on how Takata may
improve its production practices, Takata has not altered its production
practices as a result of the Panel's ongoing review.
Question 1c. When can we expect the Panel to complete its report,
and when can we expect the report to be provided to the Committee?
Answer. Takata's current understanding is that the Panel expects to
complete its report by November 2015. Takata intends to make the
Panel's report available to the Committee and the public when it is
issued.
Question 2. How many recalled inflators has Takata obtained from
the field to date?
Answer. As of July 27, 2015, Takata has received from automobile
manufactures approximately 3,600,000 inflators that they have collected
from recalls and other safety campaigns.
Question 2a. How many returned inflators has Takata tested thus
far?
Answer. As of July 27, 2015, Takata has tested approximately 97,000
returned inflators, including conducting approximately 70,000 ballistic
tests, 15,000 live dissection tests and 12,000 CT scans.
Question 2b. How many inflators does Takata expect to collect each
month going forward?
Answer. Takata currently expects to receive from automobile
manufacturers approximately 500,000 inflators per month on an ongoing
basis.
Question 2c. How many inflators has Takata provided to other
entities for testing, as directed under the preservation order?
Answer. Pursuant to the Preservation Order and Testing Control Plan
dated February 25, 2015 (``Preservation Order''), Takata has provided
recalled and/or returned inflators to NHTSA, an automobile
manufacturer, and a consultant retained by automobile manufacturers. As
of July 27, 2015, Takata has provided approximately 2,073 recalled and/
or returned inflators to those parties for testing.
Question 2d. To which entities has Takata provided inflators for
testing?
Answer. As of July 27, 2015, Takata has provided inflators to
Toyota, NHTSA and Orbital ATK for testing pursuant to the Preservation
Order.
Question 2e. Does Takata plan to test a certain percentage of the
recalled inflators? If so, what is that percentage?
Answer. Takata's testing program is not designed to test to a
target percentage, but rather Takata intends on testing to its full
capacity until it determines the root cause of rupturing inflators.
Since September 2014, when Takata began receiving from automobile
manufacturers inflators collected pursuant to the regional safety
campaign, Takata expanded its testing capacity from approximately 1,000
inflators per month to its current testing capacity of between 16,000
and 20,000 inflators per month.
Question 2f. Has Takata received any testing results thus far?
Answer. Takata has compiled, and continues to compile, results from
its own testing program and reports those results on a regular basis to
NHTSA and the automobile manufacturers. Takata has provided prior
summaries of its test results to the Committee. To date, Takata has not
received test results from the other parties who are testing returned
inflators.
______
Response to Written Questions Submitted by Hon. Bill Nelson to
Kevin M. Kennedy
Question 1. At the current pace of production, how long do you
anticipate it will take Takata (and other airbag manufacturers) to
produce sufficient replacement parts to cover all recalled vehicles?
Answer. Takata has taken significant steps to increase its capacity
to produce replacement inflators and kits and it is currently in the
process of further increasing its production capacity. Similarly,
Takata has significantly increased the number of replacement inflators
manufactured by third parties that it is supplying in replacement kits.
In May 2015, Takata produced approximately 730,000 replacement
inflators and 1,167,000 replacement inflator kits, which contain
inflators manufactured by Takata and third-party manufacturers. In June
2015, Takata produced approximately 830,000 replacement inflators and
1,450,000 replacement inflator kits, which also contain inflators
manufactured by Takata and third-party manufacturers. Takata estimates
that, by October 2015, it will have the capacity to produce
approximately 850,000 replacement inflators and 1,900,000 replacement
inflator kits per month, subject to its ability to obtain the necessary
components from third-party suppliers. In addition, once Takata's
ongoing expansion of production lines is completed (which Takata
expects to occur by February 2016), its global monthly production
capacity for replacement inflators will increase to approximately
1,200,000.
To date, Takata's production capacity for replacement inflators and
replacement inflator kits has been sufficient to meet the demands of
automobile manufacturers. Takata, however, cannot currently estimate
the date by which it will be able to produce or supply sufficient
replacement inflator kits to cover all recalled automobiles as the
number of necessary replacement inflators and kits will depend on,
among other things, the demands of the automobile manufacturers, the
number of recalled automobiles that are still on the road, and the
coordinated remedy program being prepared jointly by NHTSA and the
automobile manufacturers.
Question 2. Please detail your current internal product safety
audit program, including any external third-party audits.
Answer. Takata's current safety audit program in North America is
designed to ensure that its propellants, inflators, and air bag modules
are manufactured safely and correctly. Takata's audit teams evaluate
Takata's practices with respect to, among other things, propellant
handling, proper disposal of scrap material, on-site security,
functionality of information systems, effectiveness of manufacturing
processes, and compliance with Takata's quality assurance policies and
procedures. Specifically, Takata conducts internal quality audits,
during which a team of auditors at each Takata factory conducts audits
of processes within the factory on a weekly basis. These internal
audits are documented and verified by the External Registrar during
onsite visits every six months. In addition, the Horizontal Deployment
Group, a subset of the Takata Corporate Quality Group, conducts monthly
audits at each Takata plant for the purpose of confirming that prior
issues have been effectively addressed and remedied. These audits also
function as part of Takata's document retention program.
Takata also regularly retains third-parties to conduct independent
audits of its safety and quality assurance practices. For instance,
Takata hires third parties to conduct environmental, quality systems,
and personal and workplace safety audits at its North American
facilities. These audits confirm Takata's compliance with quality
systems as set forth by the ISO/TS-16949 Quality Standard. Takata has
also engaged outside energetic materials expert and risk analysis
consulting group Baker Engineering and Risk Consultants, Inc.
(``BakerRisk'') to conduct several manufacturing and safety audits,
including: (1) a review of manufacturing processes at Takata's Moses
Lake, Washington and Monclova, Mexico facilities between 2009 and 2010;
(2) a review of manufacturing and quality assurance processes at Moses
Lake for 2004L propellant, including safeguards for handling storage of
2004L materials and finished propellant and mitigation of a potential
accidental explosion at the facility, in 2011; (3) an audit of
procedures at Monclova for receiving 2004L propellant and for quality
assurance of new propellant, bulk storage of propellant, and material
handling during assembly in the waste stream, in 2011; and (4) safety
audits at Moses Lake and Monclova in 2013. In addition, Takata has
engaged the International Center for Automotive Research to review its
X-Series inflator manufacturing processes in Monclova in 2011 and to
review 13X desiccant handling on Monclova inflator lines in 2012.
Automobile manufacturers also routinely audit Takata's manufacturing
facilities.
Finally, the Takata Product Testing Laboratories are accredited to
the A2LA Standard, which confirms that the laboratories within Takata
meet the industry standards for testing.
Question 3. In Takata's statement in response to the Committee's
Minority staff report titled, ``Danger Behind the Wheel: The Takata
Airbag Crisis and How to Fix Our Broken Auto Recall Process,'' Takata
said that it has ``convened an independent Quality Assurance Panel to
conduct a comprehensive review to ensure Takata's current manufacturing
procedures meet best practices.''
Question 3a. When was this Quality Assurance Panel established?
Answer. Takata established the Quality Assurance Panel in December
2014.
Question 3b. What instigated Takata to take this step?
Answer. Takata is, and always has been, dedicated to public safety.
Its primary mission is to make products that save lives and prevent
injuries. Accordingly, Takata formed the Quality Assurance Panel as
part of its response to field incidents involving rupturing Takata
airbag inflators. The Quality Assurance Panel reflects Takata's
practice of continuously improving its products.
Question 3c. What, specifically, is the role of this panel? What
are its functions that were not part of Takata's existing quality
control programs?
Answer. The purpose of the Quality Assurance Panel is to audit and
prepare an independent report regarding Takata's current manufacturing
procedures for best practices in the production of safe inflators,
including inflator propellant. The Quality Assurance Panel's functions
are not significantly different from those of Takata's internal
auditing program, but its independent status will hopefully provide
Takata with input that will advance the safety of Takata's
manufacturing procedures, practices and policies.
______
Response to Written Questions Submitted by Hon. Richard Blumenthal to
Kevin M. Kennedy
Question 1. Are there any circumstances in which ammonium nitrate
can become moist and remain safe for use in airbag propellants? What
level of moisture in ammonium nitrate mixtures is sufficient to cause
safety concerns--Is there a standard used by Takata to determine how
much moisture is acceptable in its new inflator designs?
Answer. All ammonium nitrate propellants, and indeed all
propellants, contain some level of moisture. As such, all Takata PSAN-
based inflators, whether new or old, contain moisture. The vast
majority of those inflators have operated safely in the field. Takata
is unable to quantify as a single number the level of moisture that is
sufficient to cause safety concerns because that determination depends
on the environmental exposure experienced by the inflator over its
lifetime. For example, a certain level of moisture present in an
inflator that spent a lifetime in a mild climate, like Seattle, will
have a different effect than if the automobile resides in a high
temperature climate, like Miami. Takata's current field data suggests
that moisture in mild climates, without persistent high temperatures,
will not degrade the performance of the propellant.
Question 2. At the hearing on June 23, 2015, you stated that you
were unable to answer ``completely'' whether Takata's newly designed
inflators had shown evidence of moisture. What has Takata's testing
revealed regarding evidence of moisture in these inflators?
Answer. Takata interprets the phrase ``newly designed inflators''
to refer to Takata's inflators that contain the 2004L propellant.
Takata is not currently aware of any incidents from either its
manufacturing process (including related testing) or root cause
analysis that would indicate that the 2004L propellant in its newly
designed inflators may experience an alteration over time that could
potentially lead to over-aggressive combustion in the event of an air
bag deployment. Takata also conducted substantial internal induced
moisture testing, which demonstrates that inflators with 2004L
propellant perform better than inflators with 2004 propellant when
exposed to the same level of moisture and aging.
Furthermore, pursuant to the Consent Order dated May 18, 2015
between Takata and NHTSA (the ``Consent Order''), Takata has provided
NHTSA with a proposed plan regarding the service life and safety of its
non-recalled PSAN inflators, including those containing the 2004L
propellant, which includes testing Takata that will perform to
determine whether they are susceptible to over-pressurization and/or
rupturing.
Question 3. How has Takata determined what level of moisture in the
newly designed inflators is safe? What assurance can Takata provide
that aging of its new inflators will not lead to a second cascading
crisis as moisture continues to infiltrate?
Answer. Takata conducted a battery of tests on its propellants to
determine the level of moisture that is safe in its inflators. Takata
is not currently aware of any incidents from either its manufacturing
process (including related testing) or root cause analysis that would
indicate that the 2004L propellant in its newly designed inflators may
experience an alteration over time that could potentially lead to over-
aggressive combustion in the event of an air bag deployment.
Furthermore, pursuant to the Consent Order, Takata has provided to
NHTSA a proposed test plan regarding the service life and safety of
these inflators, which includes testing that Takata will perform to
determine whether they are susceptible to over-pressurization and/or
rupturing.
______
Response to Written Questions Submitted by Hon. John Thune to
Scott Kunselman
Question 1. We are all aware that, historically, recall completion
rates are unacceptably low. What more can be done to improve these
rates?
Answer. FCA US's primary goal is to remedy all recalled vehicles.
However, there are a number of factors and challenges affecting
participation rates that are outside of the control FCA U.S. and other
automakers control that we strive to overcome.
Among these factors is whether vehicle owners respond to the recall
notices they receive by scheduling an appointment with their dealer so
that the needed remedy can be performed free of charge.
Another factor impacting participation rates is vehicle age. An
analysis commissioned by the Alliance of Automobile Manufacturers
(initiated in 2008 and 2009) determined that participation rates varied
markedly based on the age of the vehicle involved in the recall. Among
the findings:
For newer vehicles, the completion rate averaged 83 percent;
For vehicles 5-10 years old, the rate dropped nearly in half
to 44 percent; and
For vehicles older than 10 years old, the completion rate
dropped by another two-thirds to 15 percent.
Because there continues to be a general lack of understanding of
why so many vehicle owners fail to respond to multiple notices and
other efforts to inform them that their vehicle needs free repairs to
fix a safety-related defect or non-compliance, the Alliance of
Automobile Manufacturers, of which FCA U.S. is a member, has
commissioned a major research effort to study consumer attitudes about
vehicle recalls and reasons why free repairs are sought or not sought.
a. For each recall involving defective Takata air bags, please
provide FCA's current recall completion rates.
Answer.
FCA US' Takata Recall Campaign Status as of August 6, 2015
------------------------------------------------------------------------
NHTSA # FCA US # Details
------------------------------------------------------------------------
814V-354 P40 No longer active. Absorbed into 14V-817
(P81)/14V-770 (P78)0
14V-770 P78 6%
814V-817 P81 Never Launched. Replaced with 15V-313
(R25)0
15V-313 R25 3% Total--Phased Launch (5 phases)
Phase 1 start June 8, 2015
Phase 2 start TBD
Phase 3-5 start TBD
815V-312 R26 0% Planned start November0
15V-444 R37 0% Phased launch (2 phases)
Tied to R25 Phase 3 and
Phase 5
------------------------------------------------------------------------
b. What has your company done to facilitate the recall process in
terms of reaching out to its own customers?
Answer. FCA U.S. monitors the pace of vehicles being remedied at a
regular frequency. The effectiveness of an outreach campaign may be
lower where there are factors such as vehicle age, lack of current name
on vehicle title, or even the owner-perceived ability to self-diagnose
or self-assess the risk.
In the event that the standard outreach plan is not producing
results that are acceptable to FCA U.S. or NHTSA, additional actions
may be taken. These actions would be considered outside of the norm or
extraordinary measures. Each recall is different, and the same strategy
may not necessarily work for all campaigns. FCA U.S. evaluates each
recall campaign to understand the individual issues and challenges
occurring during the execution of remedy repair and deploys a directed
response.
Some activities that may be included in an expanded outreach
strategy include the creation of general URLs on the subject as well as
personal URLs directing customers to a live person that will facilitate
the remedy's completion. FCA U.S. is also working with demographic
expert Urban Science to program and leverage the organization's
StreetSmart tool to identify the specific location of vehicles that
have not yet had their recall remedy completed.
As a recent example, FCA U.S. has initiated expanded outreach
activities for Recall 14V-770 (P78). We will use a phased approach,
beginning with robo calls to determine ``bad'' phone numbers. Shortly
thereafter, the outreach activities will progress to follow-up outbound
phone calls and e-mail notifications to the owners in the target areas
as well as follow-up mailers. Additional outreach activities will be
determined as necessary.
Question 2. What is the process, generally, for remedying a recall
and repairing the defective part?
Answer. FCA sends owner letters to all affected customers informing
the customer their vehicle is involved in a recall. The owner letter
informs the customer of the issue and consequence of the recall to the
customer. The owner letter also informs the customer of the specific
repair and the estimated time to complete the repair. The customer has
the option to either schedule a service repair in advance or drive to a
dealer and have the recall remedy performed.
Dealers are notified of the recall by a release of the repair
instructions by FCA U.S. to the dealer computer network. When a
customer brings a vehicle to the dealer, the dealer enters the VIN into
the dealer computer system, which informs the dealer that the VIN is
associated with a specific recall.
a. How long does it typically take to procure and then ship
replacement parts to the dealers?
Answer. Each recall is different so there is no way to characterize
a ``typical'' length of time to procure and ship parts to dealers for
recall campaigns.
b. What can be done to make the repair process more hassle-free for
customers?
Answer. The safety of our customers is paramount, as is the trust
our customers place in their vehicles. We recognize that people rely on
their vehicles for many important purposes.
FCA U.S. Customer Assistance Centers assist customers with getting
their recalls completed in several ways, including:
1. Agents contact dealers on behalf of customers to schedule
appointments when remedy parts are available;
2. When remedy parts are not available, customer information is
retained and the customer will be notified when parts become
available; and
3. Agents provide information about open recalls and estimated
timing when remedy parts are not available.
When conducting a recall, it is our primary goal to have the parts
available and promptly remedy vehicles. When that cannot be
accomplished, we make loaner cars available upon request. On July 1,
2015, FCA U.S. enhanced its Courtesy Transportation/Dealer Service
Loaner Program making it easier for dealers to provide loaner vehicles
to owners waiting for recall completion.
______
Response to Written Question Submitted by Hon. Roy Blunt to
Scott Kunselman
Question. Do you have suggestions on how to protect consumers from
rental cars with open safety recalls?
Answer. Safety is our top priority at FCA US. Ensuring that unsafe
vehicles are off the road is critical to motor vehicle safety. FCA U.S.
believes that all customers, including rental car companies, should be
able to have their recalled vehicles repaired in a timely manner and
that all customers should be treated equally whether they are driving
their own vehicle or one they rented. For this reason, FCA U.S.
continues to support the Alliance of Automobile Manufacturers'
legislative proposal regarding rental vehicles subject to recalls. This
proposal would prevent rental car companies from renting vehicles
unless the prospective renter is notified of the recall or the vehicle
is subject to a do not drive notice. This would hold rental car
companies to the same standards as auto manufacturers and ensure rental
car customers have the same access to vehicle recall and safety
information as customers who own an affected vehicle.
______
Response to Written Questions Submitted by Hon. Ron Johnson to
Scott Kunselman
Question 1. Does your company support a process where consumers
should continue to be able to rent a car or truck if the vehicle is
under an open safety recall?
Answer. FCA U.S. supports requiring that rental car companies
ground all vehicles subject to a stop drive recall until they are
repaired. For all other recalls, we continue to 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.
Question 2. If not, what are your legislative recommendations for
Congress to pursue to stop driver deaths that continue to occur in
rented, recalled vehicles?
Answer. FCA U.S. supports the Alliance of Automobile Manufacturers'
legislative proposal regarding rental vehicles subject to recalls. This
proposal would prevent rental car companies from renting vehicles
unless the prospective renter is notified of the recall or the vehicle
is subject to a do not drive notice. This would hold rental car
companies to the same standards as auto manufacturers and ensure rental
car customers have the same access to vehicle recall and safety
information as customers who own an affected vehicle.
Question 3. What other stakeholders besides your company would you
expect to support your recommendations, and does the car rental
industry support your ideas? If not, why not?
Answer. It is our understanding that nearly all of the member
companies of the Alliance of Automobile Manufacturers support its
legislative proposal, which ensures that rental car customers have the
same access to vehicle recall and safety information as customers who
own an affected vehicle by 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.
It is our understanding that all major rental car companies have
entered into a voluntary agreement to park their vehicles subject to a
safety recall. It is also our understanding that the same rental car
companies support the Raechel and Jacqueline Houck Safe Rental Car Act.
______
Response to Written Questions Submitted by Hon. Bill Nelson to
Scott Kunselman
Question 1. What is your company's position on renting to the
public vehicles under open safety recalls?
Answer. Safety is our top priority at FCA US. Ensuring that unsafe
vehicles are off the road is critical to motor vehicle safety. FCA U.S.
believes that all customers, including rental car companies, should be
able to have their recalled vehicles repaired in a timely manner and
that all customers should be treated equally whether they are driving
their own vehicle or one they rented.
FCA U.S. 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.
Question 2. Your company has not publicly supported S. 1173, the
Raechel and Jacqueline Houck Safe Rental Car Act, which was
reintroduced on April 30, 2015.
Question 2a. Do you support S. 1173? Why or why not?
Answer. No. FCA U.S. supports the Alliance of Automobile
Manufacturer's (the ``Alliance'') legislative proposal regarding rental
vehicles subject to recalls. This proposal would prevent rental car
companies from renting vehicles unless the prospective renter is
notified of the recall or the vehicle is subject to a do not drive
notice. This would hold rental car companies to the same standards as
auto manufacturers and ensure rental car customers have the same access
to vehicle recall and safety information as customers who own an
affected vehicle.
Question 2b. If not, do you have alternative proposals or ideas as
to how consumers can be better protected from rental cars under recall?
If so, please detail them.
Answer. FCA U.S. supports the Alliance legislative proposal, as
described above.
Question 3. In response to a proposal offered by the Alliance of
Automobile Manufacturers (``the Alliance''), NHTSA analyzed the number
of recalls in which the manufacturer advised the owner to not drive the
recalled vehicle (so-called ``do not drive'' recalls). In a November 5,
2014, letter to the Senate, NHTSA reported that, from 2010-2013, ``do
not drive'' recalls issued by members of the Alliance accounted for
only 4.9 percent of the total number of recalled vehicles. Furthermore,
the recalled vehicles that were driven by Raechel Houck and Jewel
Brangman were not subject to a ``do not drive'' advisory. In light of
these facts, does your company agree with the Alliance's position that
only recalled vehicles subject to a ``do not drive'' advisory should be
grounded and not rented until they have been repaired?
Answer. Yes, as described above, FCA U.S. supports the Alliance's
position.
Question 4. The Alliance has also proposed that vehicles subject to
a safety recall, other than ``do not drive'' recalls, should be able to
be rented before they are repaired--as long as the consumer is informed
of the recall when renting the vehicle. Do you agree with the
Alliance's position that disclosure to the customer of a safety recall
is sufficient to protect the safety of that customer?
Answer. FCA U.S. agrees that the Alliance legislative proposal
ensures that rental car customers have the same access to vehicle
recall and safety information as customers who own an affected vehicle
by 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. John Thune to
Rick Schostek
Question 1. We are all aware that, historically, recall completion
rates are unacceptably low. What more can be done to improve these
rates?
Answer. Honda continues to believe that there is substantial
promise in tying the annual state vehicle registration process to a
requirement that safety defects be addressed before completion of
vehicle registration. We recognize that there are a number of issues
about this concept that require further discussion. But we are
convinced that this is the single most significant step we can take to
achieve very high recall and remedy rates.
a. For each recall involving defective Takata air bags, please
provide Honda's current recall completion rates.
Answer. As of August 5, 2015, with respect to Takata inflator
recalls initiated in 2014 and later, American Honda's recall completion
rate by inflator repair type is:
Driver-Side 29.0%
Passenger-Side 27.1%
Overall 28.3%
b. What has Honda done to facilitate the recall process in terms of
reaching out to its own customers?
Answer. Over and above the required mailed notification, we have
pursued new ideas and methods to encourage our customers to check their
vehicle identification number and recall status in order to increase
the rate of response to recall notifications.
We provide multiple notices in both English and Spanish. We have
consulted with the U.S. Postal Service to try new methods to get people
to open recall mailings. One idea was a free calendar inserted with the
recall notice. This did not prove successful. We have used overnight
delivery of follow-up notifications. There was no material change in
the rate of recall completion.
We have, and continue to contact customers by phone. In support of
the Takata inflator campaigns, we have called more than 1.5 million
hard-to-reach customers, using both direct and automated calls. An
automated call just before notification or reminder mail has been
successful in raising response rate. It is now our practice to use
automated calls to alert customers in advance of mailed notifications.
We have enhanced our general recalls websites and created a new
microsite dedicated to air bag inflator recalls to keep our customers
informed and to make it easy for them to check their vehicles for open
recalls. We extended our Customer Relations department call center
hours to receive calls from customers seven days per week as well as
engage with customers on Honda's Twitter and Facebook pages.
In some markets, we have enlisted a special investigative firm as
part of our effort to contact hard-to-reach owners of older model
vehicles affected by the Takata airbag inflator recalls. We also have
worked with CARFAX to add open recall alerts to the CARFAX history
report for affected vehicles. In addition, CARFAX is sending us an
alert if there is a change to their history report for some vehicles
with the affected Vehicle Identification Numbers (VINs). This helps us
to obtain additional information to contact a hard-to-reach customer.
Honda also voluntarily initiated a multi-million dollar bi-lingual
regional advertising campaign in March to implore customers to repair
their vehicles. This campaign was designed to gain the attention of
customers in the nine states and two U.S. territories that experience
the most consistently high temperatures and absolute humidity to
immediately check for open recalls and safety improvement campaigns.
Complementing this print and radio effort was a social media campaign
via Facebook advertising
c. In your testimony, you commended the effectiveness of Honda's
social media campaign regarding the air bag recalls. On what metrics
does Honda rely in evaluating the success of this social media
campaign?
Answer. Honda evaluated this social media campaign's success upon
impressions (reach) and engagement rate (percent of people who
interacted in some manner with the post such as clicking, liking,
sharing). The campaign achieved more than 6.4 million impressions and
more than 124,000 engagements. Ideally, regarding the air bag inflator
recall social media campaign, we would measure success upon number of
affected vehicles that were repaired. However, due to the multitude of
media channels (print, radio, personal phone calls, post cards, as well
as social media) utilized this past spring, it was not possible to
clearly attribute the number of repairs solely to the social media
campaign. We do know, however, that of the total Honda and Acura recall
website views during the campaign, 52.2 percent came from the Facebook
social media ads.
d. What did those metrics show about this social media campaign in
particular?
Answer. We created a two-part Facebook ad campaign. The first was
launched March 18,2015 targeting national Honda and Acura owners in the
U.S.. The engagement rate (ER) for this group was 2.23 percent (above
our benchmark of 1.10 percent) and the click through rate (CTR) was
2.73 percent.
The second portion of the Facebook ad campaign was launched March
19,2015 and geo-targeted Honda and Acura owners residing in California
and states and territories identified as high absolute humidity regions
(Texas, Louisiana, Mississippi, Alabama, Georgia, Florida, South
Carolina, Hawaii, Puerto Rico, and U.S. Virgin Islands). The ER for
this group was also greater than our benchmark (1.80 percent versus 1.1
0 percent) and the CTR was 2.33 percent. Overall the limiting factor
for this effort-or any social media effort-, particularly for older
vehicles that have changed hands one or more times, is having the
current owner's e-mail address.
Question 2. What is the process, generally, for remedying a recall
and repairing the defective part?
Answer. Once an automaker notifies NHTSA that it has determined a
safety defect exists in one of its vehicles, the automaker has 60 days
to notify registered vehicle owners of the defect and, if available,
the process for remedying it. If there is no available remedy, then the
automaker will have to send a second notification letter to vehicle
owners to advise them once a remedy is available. (Whether a remedy is
available at the time of the initial owner notification often times
depends on whether the defect is one of manufacture or design. If it is
the latter, then it may take time to design, test and manufacture
replacement parts). Once the remedy is available and owners are
notified, much of the process depends on the vehicle owner recognizing
the automaker notice and responding to it, typically by calling either
their local dealer to schedule a service appointment or the automaker's
customer relations department to identify a dealer and schedule an
appointment. When the owner arrives at the dealer for a scheduled
recall repair appointment, the dealer will repair the vehicle for free.
a. How long does it typically take to procure and then ship
replacement parts to the dealers?
Answer. There are many different factors affecting procurement and
shipment of replacement parts to dealers, including tooling
availability, raw material availability, component part lead-times,
required testing, capacity limitations, and logistics lead-time.
Procurement lead-time can vary from as little as a few days to many
months. The general procurement timeframe, from the time the purchase
order is generated until the time the parts arrive at American Honda,
is typically between 30 and 60 days. After American Honda receives the
parts, the timeframe to have them available to the dealer is typically
about a week.
b. What can be done to make the repair process more hassle-free for
customers?
Answer. We have asked our dealers to expand service hours and to
never turn away a customer with an affected vehicle. In the event a
customer may have forgotten to schedule or include the recall repair on
an earlier scheduled appointment with the dealership, we require
dealers to check the YIN for every vehicle that comes into their
de.alership.
We also have reinforced with our dealers Honda's firm policy to
offer affected customers a loaner or rental car free of charge while
their vehicle is being repaired or if they are waiting for a
replacement part to be delivered. All dealers are authorized to make a
vehicle available to a customer without prior approval from Honda. We
have been actively monitoring the availability of loaner and rental
cars and engaging with our dealers to ensure that they offer such
vehicles so we can meet our customers' needs.
______
Response to Written Question Submitted by Hon. Roy Blunt to
Rick Schostek
Question. Do you have suggestions on how to protect consumers from
rental cars with open safety recalls?
Answer. As noted in our response to Senator Johnson's first
question, Honda supports legislation S.l173, the Raechel and Jacqueline
Houck Safe Rental Car Act of 2015--to require car rental companies to
remedy safety defects before a vehicle can be rented.
______
Response to Written Questions Submitted by Hon. Ron Johnson to
Rick Schostek
Question 1. Does your company support a process where consumers
should continue to be able to rent a car or truck if the vehicle is
under an open safety recall?
Answer. We believe that the defect in a vehicle rented to the
public should be remedied before the vehicle is rented. It is for this
reason that Mr. Schostek expressed at the June 23 hearing Honda's
support for S.1173, the Raechel and Jacqueline Houck Safe Rental Car
Act of 2015 and supported its inclusion in the Senate-passed Developing
a Reliable and Innovative Vision for the Economy (DRIVE) Act.
Question 2. If not, what are your legislative recommendations for
Congress to pursue to stop driver deaths that continue to occur in
rented, recalled vehicles?
Answer. Please see our response to Question 1.
Question 3. What other stakeholders besides your company would you
expect to support your recommendations, and does the car rental
industry support your ideas? If not, why not?
Answer. Honda is not in a position to speak for other stakeholders
on their legislative positions.
______
Response to Written Questions Submitted by Hon. Bill Nelson to
Rick Schostek
Question 1. What is your company's position on renting to the
public vehicles under open safety recalls?
Answer. As a manufacturer of motor vehicles, Honda is responsible
for the safety of our vehicles. While we establish high standards of
design, materials and manufacture for all aspects of our vehicles, at
times the resulting product may not meet the level of intended safety
performance. In those circumstances where it becomes necessary to
recall a vehicle for a safety related defect, we strive to locate and
notify owners of affected vehicles of the need to bring the vehicle to
a dealer for inspection and remedy where needed. Our objective is reach
as many owners as we are able and to remedy their vehicles. We believe
that the defect in a vehicle rented to the public should be remedied
before the vehicle is rented.
Question 2. Your company has not publicly supported S. 1173, the
Raechel and Jacqueline Houck Safe Rental Car Act, which was
reintroduced on April 30, 2015. Do you support S. 1173? Why or why not?
Answer. Mr. Schostek announced Honda's support for S. 1173 at the
hearing on June 23, 2015. That support was reiterated in a letter to
Senator Schumer, the sponsor of the legislation, on July 9, 2015. A
copy of that letter, which explains our reasons for supporting the
bill, is appended hereto.
Attachment
Honda North America, Inc.
Washington, DC, July 9, 2015
Hon. Charles E. Schumer,
SH-322 Hart Senate Office Building,
Washington, DC.
Dear Senator Schumer:
I write to offer Honda's support for S. 1173, the Raechel and
Jacqueline Houck Safe Rental Car Act of 2015.
Honda North America's Executive Vice President, Rick Schostek,
announced our support of the legislation during his testimony before
the Senate Commerce, Science, and Transportation Committee on June 23,
2015. As a manufacturer of motor vehicles, we are responsible for the
safety of our products. Despite our best efforts, from time to time it
becomes necessary to recall a vehicle to remedy a system or component
that may not meet the level of intended safety performance. When this
occurs, we strive to locate all of our customers with an affected
vehicle and urge them to bring their vehicle to our dealers for repair
at their earliest convenience.
As a matter of corporate policy, Honda generally does not sell its
vehicles to rental car fleets. However, our dealers are free to do so,
which means that some Honda and Acura vehicles do end up in rental car
fleets. Additionally, some rental car companies purchase older vehicles
in the used car market. As such, we believe S.1173 will facilitate our
ability to repair these vehicles and assist us in protecting our
customers and those who drive our vehicles.
We congratulate you and your colleagues for sponsoring this
important legislation.
Sincerely,
Edward B. Cohen,
Vice President,
Government and Industry Relations.
Cc: Senator Barbara Boxer
Senator Claire McCaskill
Senator Kristen Gillibrand
Senator Robert Casey, Jr.
Senator Dianne Feinstein
Senator Richard Blumenthal
Senator Bill Nelson
[all]
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