TOKYO/DETROIT (Reuters) - A year ago, Japan's Takata Corp 7312.T, the world's second-largest maker of auto safety parts, believed it had finally contained a crisis more than a decade in the making.
It was wrong.
More than a million Honda Motor Co Ltd (7267.T) vehicles could be subject to an upcoming recall for Takata air bags that are at risk of exploding and shooting shrapnel at passengers and drivers, according to a person with knowledge of the matter.
Those vehicles carry air bags made between 2000-02 when, Takata says, it botched production of air bag inflators and lost related records. Honda and other automakers have already recalled 7.6 million vehicles over the past five years.
That total is now likely to grow after Takata said it is willing to replace more air bag inflators made between 2000-07 that it supplied to Honda, Toyota Motor Corp (7203.T), Nissan Motor Co (7201.T), Mazda Motor Corp (7261.T), BMW (BMWG.DE), Chrysler and Ford Motor Co (F.N) for vehicles sold in the United States. [ID:nT9N0NT01N]
The possible additional recalls would come at a time when General Motors (GM.N) is under scrutiny over why it took more than a decade to discover a faulty ignition switch linked to at least 13 deaths. [ID:nL2N0P20AX] As automakers promote over-the-horizon breakthroughs like self-driving cars, the industry's mass safety-related recalls underline how much can still go wrong with some of the cheapest, most established technologies.
In April and May 2013, Takata's customers, led by Honda and Toyota, recalled more than 4 million vehicles due to the risk that defective air bag inflators could blow apart and shoot metal shards into vehicles in the event of an accident.
Those 2013 recalls, which ranked as the largest ever for an air bag defect, contributed to a $300 million charge for Takata.
Takata and Honda told U.S. safety regulators that the core of the problem was how the explosive material used to inflate Takata air bags had been handled and processed between 2000-02 at plants in the United States and Mexico.
The 2013 recalls involving Honda and four other car makers were intended to close the books on a problem that had emerged as early as 2007 and had already been linked to two deaths.
But just weeks after the 2013 recalls, on May 14, a 10-year-old Honda Fit was involved in an accident in western Japan that raised doubts about whether these recalls had gone far enough.
The Fit's passenger-side air bag exploded, according to Honda and Japan's transport ministry. There were no injuries in the accident, in Okayama, so police did not give details, but safety investigators found the metal ejected by the air bag was so hot it set fire to the instrument panel and glove compartment.
Honda was immediately concerned. The Fit had not been part of earlier recalls and it raised a doubt about whether more defective parts could be in circulation than previously identified. Honda engineers spent six months but failed to recreate the explosion, the company said.
In November, Honda told Japan's safety regulators it was still investigating a new air bag explosion case but did not see the need for another recall. A month later, it said in a statement to Reuters: "We have confirmed that (Takata) has conducted cause analysis and implemented counter measures, and that in the production process it is taking preventive measures."
Then, this month, Toyota recalled another 650,000 cars in Japan for defective Takata air bags and called back 1.6 million vehicles previously recalled overseas, an unusual step.
A complication, Toyota said, was that Takata's records had proven to be incomplete. Takata spokesman Toyohiro Hishikawa confirmed that the company had discovered a problem with records kept at its plant in Monclova, Mexico.
Short of replacement parts from Takata, Toyota has decided to turn off air bags in Japan as customers come to dealerships with recalled vehicles, judging an inoperable passenger-side air bag to be safer than a potentially defective one.
Meanwhile, Honda is moving to expand its own recalls, according to the person with knowledge of the matter. That could include more than a million more vehicles. Honda could also recall the 2003 Fit. "If we decide it is necessary, we will take measures quickly," Honda said in a statement.
Other automakers are expected to follow. Nissan said it would take "prompt action as necessary". Mazda and Chrysler said they were investigating. BMW said it was in touch with Takata and regulators.
Yet more vehicles could be recalled if an ongoing U.S. safety investigation finds evidence of wider problems.
The National Highway Traffic Safety Administration (NHTSA) is examining whether Takata inflators made after 2002 are prone to fail and whether driving in high humidity contributes to the risk for air bag explosions.
That would go beyond the manufacturing glitches that Takata and Honda previously identified.
Takata told the NHTSA in a letter, dated June 11 and posted recently on the NHTSA's website, that it will support replacements of certain driver-side air bag inflators made between Jan. 1, 2004 and June 30, 2007, as well as certain passenger side inflators made between June 2000 and July 2004.
But Takata did not admit that there were safety defects to these inflators, saying currently available information does not indicate that. "(N)either Takata nor the vehicle manufacturers conducting these field actions would be expected to admit that its product contain such a defect," the company said in the letter.
Takata Chief Executive Shigehisa Takada also said in a media statement on Friday: "Takata is committed to the highest standards of safety for our customers and their customers."
Takada, who could not be reached directly for further comment, is the son of Juichiro Takada, who took his Tokyo-based family run business from seat belts into the production of air bags from the late 1980s.
Like other suppliers, Takata relies on auto manufacturers to make the final determination on the scope and timing of recalls and has typically left disclosure of defects to them.
Since the recalls in April and May last year, there have been at least six cases of Takata inflators exploding in the United States and two in Japan.
In August, an inflator ruptured in a 2005 Honda Civic in the United States, sending a "one-inch piece of shrapnel into the driver's right eye", according to a complaint filed with the NHTSA. In January, a 2002 Toyota Corolla in Shizuoka, Japan had its air bag explode, sending hot shrapnel into the car. The passenger seat was burned, Toyota has said.
The NHTSA said this month it was examining whether moisture from humidity could be seeping inside inflators designed to be airtight. That could make the volatile propellant inside the inflators unstable, experts have said.
The agency is also looking at Takata inflators supplied after 2002. Its probe includes an examination of air bag explosions in a 2005 Mazda 6, a 2006 Dodge Charger and a 2004 Nissan Sentra.
Chrysler, maker of the Dodge Charger, had not previously been involved in the Takata recall. The Sentra had previously only been recalled for the 2002 and 2003 model years.
Air bags, including those made by Takata, have saved thousands of lives since their widespread adoption in the 1990s, automakers, regulators and safety advocates agree.
But in order to work, air bags need to inflate in less than half the time it takes to blink an eye, just 40 milliseconds on the passenger side, according to Takata. That requires the use of powerful and potentially dangerous explosives in inflators which require careful handling and precise calibration.
In March 2006, Takata's air bag plant in Monclova was rocked by a series of explosions that sent a fireball into the air.
Takata uses ammonium nitrate in its inflators, Honda has said. That explosive compound is volatile and highly sensitive to moisture. Other air bag makers, including Takata's larger Swedish rival, Autoliv Inc (ALV.N), have kept their inflator designs a proprietary secret.
Takata identified several manufacturing problems with its inflators, including some at a plant in Moses Lake, Washington, and at Monclova, where the ammonium nitrate was exposed to too much moisture inside the air-conditioned plant.
The manufacturing glitches meant the inflator propellant could burn too fast and blow apart the metal casing surrounding it, sending out hot gas and shrapnel. [ID:nL2N0KJ2QB]
The recalls have been most costly for Honda. In May 2009, 18-year-old Ashley Parham was driving a 2001 Honda Accord when she bumped into a car in her high school parking lot outside Oklahoma City. The Accord's air bag exploded and metal shrapnel sliced Parham's carotid artery. She bled to death, one of two deaths linked to Takata air bags. Honda and Takata settled with Parham's family out of court and details were not disclosed.
Sean Kane, president of Safety Research and Strategies and a researcher and consultant for plaintiffs' lawyers, said it was clear past Takata recalls, which began in 2008, had fallen short. "What's very troubling is that they haven't resolved this thing once and for all," he said.
In Japan, drivers who began to respond to recall notices this week were sent home from Toyota dealerships with a yellow warning label on the window visor.
"Warning: Passenger Air Bag Inoperative," the warning reads. "We recommend you sit in the back seat. If you must sit in the front seat, push it all the way back and use a seatbelt."
Tomoki Nakagawa, 52, said he was stunned to find his mechanic had turned off the passenger air bag on his silver Noah minivan. He was told to avoid carrying passengers, advice that puzzled and frustrated him.
"I bought a minivan because I need to carry many people. If there is an accident and the injury gets more serious because there was no air bag, how is Toyota going to respond?" he said.
Toyota took the step of disabling passenger-side air bags after consulting with Japan’s transport ministry, which approved the action. The automaker has told regulators it expects to have replacement parts available around September.
"We temporarily suspended the air bag function on vehicles in Japan until the parts are available because (the ministry) requires a remedy at the time of recall filing," Toyota spokesman Brian Lyons said. "We considered the lead time of remedy parts preparation, and we prioritized the customer's safety."
Additional reporting by Maki Shiraki, Minami Funakoshi in Tokyo, Edward Taylor in Frankfurt, Paul Lienert and Bernie Woodall in Detroit; Editing by Kevin Krolicki, Mark Bendeich and Ian Geoghegan