Special Report: Plant with troubled past at center of Takata air bag probe

Thu Nov 20, 2014 8:06am EST
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By Joanna Zuckerman Bernstein and Ben Klayman

CIUDAD FRONTERA Mexico/DETROIT (Reuters) - The dusty, industrial town of Ciudad Frontera, Mexico, has moved from the far reaches of the global auto supply chain to the front lines of an investigation into why air bags from Takata Corp are blowing up with lethal force in accidents.

The Takata plant there has been confirmed as the source of defective air bags made in 2001 and 2002 and again around 2012, according to recall records, automakers and regulators. In 2006, the factory blew up, driving home for workers and residents the volatility and risk of the explosive compound at the core of Takata’s air bags.

Now, the U.S. National Highway Traffic Safety Administration (NHTSA) has ordered Tokyo-based Takata Corp (7312.T: Quote) to submit a wide array of records, including those pertaining to manufacturing controls at the Mexican plant, as part of an investigation into why its air bags have shot shrapnel at drivers in five fatal accidents from Oklahoma to Malaysia.

All five of the victims - including three in the last 14 months - were hit by shrapnel from air bags in Honda vehicles. At least another 160 injury claims involving cars from several automakers have been reported to NHTSA, according to a Reuters tally.

Interviews with 21 former and current Takata workers and consultants, along with company presentations and email reviewed by Reuters reveal the pressure inside the Japanese supplier to ramp up output and drive down costs for inflators - the mechanism that triggers air bags to deploy in a fraction of a second after a crash.

The accounts include the concerns of managers that workers broke quality rules to boost output. It isn't clear whether the productivity pressures and quality issues they describe led to specific accidents. But the portrait they draw suggests that top executives at the company were not fully aware of what was going on at the foreign factories that churned out millions of air bags. So far, the Takata problems have led to the recall of over 16 million vehicles worldwide.

“We are highly focused on cooperating with NHTSA and the (U.S.) government investigation,” Takata's U.S. spokesman Alby Berman said in response to questions sent by email.

The NHTSA administrative order requires Takata to supply documents and answer questions under oath related to any problems in producing air bag inflators. The order was prompted in part by an Oct. 17 Reuters report detailing production and quality problems at the Mexico plant. The company has until Dec. 1 to comply. In addition to the regulatory probe, Takata faces a criminal investigation by U.S. prosecutors.The investigations come as the Mexico plant gears up to make parts needed to replace millions of air bags in the ongoing vehicle recalls.   Continued...

Takata's air bag plant is rocked by explosions in Monclova March 30, 2006. REUTERS/Gustavo Adolfo Rodriguez