The infamous Takata Corp. recall has been one of the top issues plaguing automakers this year, affecting driver’s side air bags that apparently explode in humid conditions and subsequently pummel passengers with shrapnel. The first consumer class actions over the recalled air bags were filed in California and Florida in late October, with a number of others following suit shortly thereafter.
Consumers suing Takata Corp. and a number of top automakers, including Chrysler Group LLC, Ford Motor Co. and BMW of North America asked the U.S. Judicial Panel on Multidistrict Litigation to consolidate the class actions over the matter in November.
Since this is one of the most notorious recalls in the industry, we are certain that the issues will continue to grow in the coming year. It still remains to be seen whether Takata will expand its recall nationwide as ordered by the National Highway Traffic Safety Administration’s November order. So far, Takata has only recalled vehicles in high humidity areas.
While Takata remains on the fence concerning its responsibility for the defective airbags, car manufacturers are being hit hardest. During the first week of 2015, Honda agreed to pay $70 million in fines due to NHTSA’s allegations that it failed to report more than 1,700 deaths and injuries over a 10-year period. NHTSA discovered this cover-up while investigating the Takata airbag situation. U.S. Transportation Secretary Anthony Foxx, in a statement released last month, said:
Honda and all of the automakers have a safety responsibility they must live up to — no excuses. Last year alone, we issued more fines than in NHTSA’s entire history. These fines reflect the tough stance we will take against those who violate the law and fail to do their part in the mission to keep Americans safe on the road.
NHTSA issued more than $126 million in fines in 2014, including a $35 million fine against General Motors Co. over its ignition switch defect. Honda failed to provide early-warning reports to NHTSA to alert it about safety-related issues. The fines address Honda’s alleged failure to report some 1,729 death and injury claims to the agency from 2003 to 2014, as well as its alleged failure to report some warranty claims and customer satisfaction-related claims during that time, according to the agency.
The early-warning reporting requirements are part of the Transportation Recall Enhancement, Accountability and Documentation (TREAD) Act, which requires car manufacturers to submit reports to the NHTSA every quarter to alert the agency of deaths or injuries arising from possible safety defects.
The TREAD Act was passed in 2000 after the Ford-Firestone tire malfunctions, according to statements by Rep. Fred Upton, R-Mich., who authored the bill. Following a barrage of class actions related to defective Takata Corp. air bags, NHTSA issued a special order Nov. 3 directing Honda to explain its failure to fully report deaths and injuries related to possible auto safety defects, as required under the act.
The 1,729 injuries and deaths that Honda failed to report constituted more than double the number of incidents the carmaker had reported to the agency in the past 11 years, according to the early-warning reports filed with the NHTSA.
Honda has attributed its under-reporting of those death and injury notices to “errors related to data entry, computer coding, regulatory interpretation, and other errors in warranty and property damage claims reporting.” NHTSA’s investigation and Honda’s admissions of “systemic failures” may ultimately pose a larger threat to its bottom line, since persons filing suit will likely use the admissions in the ongoing air bag defect litigation against the company.
Honda was among the first to be hit with proposed class actions that accused the company of failing to inform NHTSA that the air bags posed a serious safety risk. It has been reported that more than 14 million vehicles equipped with air bags supplied by Takata have been recalled worldwide because of the defect. The manufacturing defect in the air bags dates back to at least April 2000, and Takata became aware of it as early as 2001. Honda was aware of an air bag-related accident in 2004 that involved one of its vehicles, but categorized it as an “anomaly” and merely sent a standard incident report to NHTSA.
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