Takata says latest U.S. recall investigative; cost issues still unresolved

Tue May 17, 2016 5:21am EDT
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By David Shepardson and Minami Funakoshi

WASHINGTON/TOKYO (Reuters) - Japan's Takata Corp (7312.T: Quote) declared nearly 14 million air bag inflators defective as part of an expanded U.S. recall, but it said it considered the recall investigative, leaving the thorny question of cost-sharing with automakers unresolved.

The question of just how much Takata will have to pay for a deepening crisis over potentially deadly airbags has been hanging heavily over the firm, with management saying that can be worked out only when there is clarity on the root cause of the problem.

Until now, automakers have launched what are called investigative recalls, where they collect parts to determine the reasons for the defects. Under such recalls, automakers bear most of the burden, although Takata is widely expected to shoulder more.

The airbags have the potential to inflate violently, spraying metal shrapnel in the vehicle and have been blamed for 13 deaths and more than 100 injuries, mainly in the United States.

The company's woes worsened this month with U.S. authorities announcing a recall of up to 40 million more of the company's air bags, on top of the more than 50 million that have already been recalled globally.

Monday's notice to remove 14 million inflators is the first part of the expanded recall.

Takata spokesman Toyohiro Hishikawa said that the company considers the newly announced recall investigative and reiterated the company 's stance that it is waiting until a study it commissioned presents its conclusions in the summer.

But Hishikawa added the company "generally agrees" with the National Highway Traffic Safety Administration's assessment that a combination of time, environmental moisture and fluctuating high temperatures contribute to the degradation of the ammonium nitrate propellant in the inflators.   Continued...

The logo of Takata Corp is seen on its display at a showroom for vehicles in Tokyo, Japan, May 11, 2016. REUTERS/Toru Hanai