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The Japanese auto-parts supplier Takata took a defiant stand against lawmakers at a hearing on Capitol Hill today. The company is facing pressure from federal regulators to expand a recall of its defective airbags, but so far, Takata has refused.
Exploding Takata airbags that send metal shards flying inside the vehicle have been linked to at least five deaths. Long-term exposure to humid air can cause the airbag's inflators to burn faster than they're supposed to.
More than 11 million cars with Takata airbags have already been recalled in the U.S., but it's been limited to hot, humid states like Hawaii and Florida and some U.S. territories.
But now, federal regulators want more. The National Highway Traffic Safety Administration gave Takata a deadline of midnight last night to expand the recall to all 50 states.
At a House committee hearing today, Takata executive Hiroshi Shimizu wasn't ready to comply.
"Takata continues to believe that the public safety is best served if the area of high absolute humidity remain the priority for the replacement of suspect inflators," Shimizu told lawmakers.
Shimizu says his company is sorry for any injuries caused by its airbags, but the company maintains it shouldn't be subjected to the government's demand to expand the recall.
Rep. Jan Schakowsky, a Democrat from Illinois, questioned Takata's argument that only the manufacturer was responsible for conducting a recall.
Rep. Schakowsky: "Do you agree that Takata is not required to decide in good faith whether your products contain a safety related defect?"
Shimazu: "Congresswoman, I agree with the statement that based on the data we have it doesn't support to change from regional recall to national recall at this moment."
Executives from Toyota, BMW and Honda also testified. Honda's Rick Schostek said it would do what Takata hasn't.
"We want to inform you that Honda is going to expand our existing regional safety improvement campaign on affected driver airbag inflators to a national campaign. Why are we doing this? Our customers have concerns and we want to address them," Schostek said.
But expanding to a national recall won't be easy for Honda or the industry.
"We believe this expansion, and acceleration of current action, we believe there there will be a part shortage that may occur despite Takata's effort to increase the supply of inflators," Schostek said.
Takata's Hiroshi Shimizu says the company is making 350,000 replacement kits a month. He says by January, production should go up to 450,000 kits. Republican Joe Barton from Texas says at that rate, getting millions of airbags replaced would take a year and a half or longer.
Barton: "Do you think that's acceptable?"
Schostek: "It's not speedy enough. We understand the issues, so that's why we are discussing to add to capacity of the productions but we do everything we can do at this moment."
Barton: "But what does a driver do with a vehicle that's in a recall that's not going to be repaired for another year and a half or two years? Do you just disconnect the airbag? Just hope you don't have an accident?"
Shimizu: "On driver side, no, that's impossible."
Shimizu says by focusing its recall on humid areas, the company can keep up. But no matter how Takata responds, it faces a difficult and expensive road ahead. Scott Upham, who heads Valient Market Research, says Takata's situation is precarious.
"A large part of that is due to the liability, as well as cost implications," Upham said. "Really, they're going to be on the hook to produce millions and millions of replacement parts, which right now they really haven't shown an ability to come up with a game plan on how to produce those parts within their own production facilities."
Takata faces fines of up to $35 million if it doesn't comply the government's order.
The National Highway Traffic Safety Administration's David Friedman says Takata hasn't yet gotten to the root cause of the airbag failures.
"That is a critical step and we will continue to push ourselves and industry to get to the bottom of this," Friedman said.
If Takata doesn't act, Friedman said the government could bring the company to court.
"It is clear to us we need a bigger stick," he said.
This segment aired on December 3, 2014.
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