November 14, 2014 / 12:12 AM / 4 years ago

Takata says it is subject of U.S. criminal probe on air bags

TOKYO/DETROIT (Reuters) - Takata Corp 7312.T is the subject of a U.S. criminal investigation over defective car air bags that have been linked to five deaths, and executives from the Japanese company and its major client Honda Motor Co Ltd (7267.T) are expected to face congressional hearings in the coming week.

Displays of Takata Corp are pictured at a showroom for vehicles in Tokyo November 5, 2014. REUTERS/Toru Hanai

A federal grand jury in New York has subpoenaed Takata’s U.S. unit to produce documents on the air bag defects, the company’s Tokyo-based spokesman said on Thursday.

Separately, the U.S. Senate commerce committee scheduled a hearing next Thursday to solicit testimony from Takata executives on air bag defects, as well as from officials of the National Highway Traffic Safety Administration (NHTSA) on the vehicle recall process. Honda said it will also send a representative to testify before the Senate committee on Thursday.

Defective Takata air bag inflators have been found to explode with dangerous force in accidents, sending shards of metal into the vehicle.

An investigation by U.S. prosecutors in Manhattan into the Japanese safety-parts maker had been previously reported, but Thursday’s statement is the first indication that a seated grand jury was seeking evidence. Takata disclosed the probe in a closed-door meeting with financial analysts, according to an account from one participant.


A Takata spokeswoman in Tokyo said on Friday the company is preparing to add two new production lines at its plant in Monclova, Mexico, to make replacement air bag inflators - the explosive devices that allow air bags to inflate in a fraction of a second during a crash. A January start-up is planned for the new production lines in Mexico, the company said.

Takata said it could not disclose the scope of the capacity increase, but noted it had been planned before Honda’s latest recall was announced.

On Thursday, Takata told analysts in Tokyo that it was making “constant improvements” to the chemical compound used in its inflators, but said they were not related to any defects or accidents.

Since 2000, Takata has made more than 100 million inflators, according to industry estimates and company data. Since 2008, more than 17 million cars equipped with Takata air bags have been recalled, including over 11 million in the United States.


In a statement posted Thursday on Takata’s website, CEO Shigehisa Takada apologized to customers and shareholders for the recalls: “Our whole company will strengthen our quality management structure and work to prevent an incident from occurring again,” he said.

Separately, Takata disputed a recent New York Times report that it had failed to tell federal regulators that it had found signs of air bag defects in secret tests in 2004 in Michigan.

The company said it believed the Nov. 6 story “was based on serious misunderstandings of the facts.” It said it was testing air bags for tears to cushions in their modules, not for inflator ruptures, as reported.

The latest fatality linked to Takata air bags, and the first outside the United States, was disclosed earlier on Thursday. Honda said the pregnant woman driver of a Honda City died in July in Malaysia after being hit by shrapnel from a Takata air bag.

All five deaths have been in Honda cars. The Japanese carmaker, Takata’s biggest customer, widened its recall for the defective air bags by 170,000 vehicles globally, taking its total to nearly 10 million.

Additional reporting by Chan-Ran Kim in Tokyo, Paul Lienert in Detroit and Richard Cowan in Washington; Editing by Lisa Von Ahn, Cynthia Osterman, Grant McCool and Ian Geoghegan

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