Class Actions for Takata Air Bag Defects

29 Oct 2014 | Author: | No comments yet »

AutoNation Halting Sales of Cars Subject to Takata Airbag Warnings.

WHEN regulators sleep and auto companies place profits over safety, safety defects pile up. DETROIT (AP) — The head of the nation’s biggest car dealership chain says it won’t sell used cars being recalled for exploding air bags due to conflicting advice from automakers and lack of direction from the government.DETROIT (Reuters) – AutoNation Inc (AN.N), the largest U.S. auto retail group, has stopped selling cars equipped with Takata Corp (7312.T) air bags involved in a massive global recall involving more than 16 million vehicles, Chief Executive Mike Jackson said on Tuesday. “We as a company have made the decision not to retail any vehicle that is involved in this recall until it is repaired and the vehicles that do come in for service, we are advising the customer not to put a passenger in front of that air bag until it’s repaired,” Jackson said in an interview with Reuters.

A record number of vehicles — more than 50 million — have been recalled this year, a result of congressional hearings and Justice Department prosecutions, which exposed a mass of deadly defects that the auto industry had concealed. From the Ford Explorer rollovers in the 1990s and Toyotas’ issue with unintended acceleration in the 2000s to the recent fatal consequences of defective General Motors ignition switches and Takata airbags, the auto companies hid defects to avoid recalls and save money. The move comes amid complaints of uneven recall and safety campaigns by auto makers to deal with the 7.8 million older cars containing air bags that can explode with too much force during a crash, spraying drivers and passengers with metal and plastic debris. “We have a very difficult situation on our hands,” AutoNation Inc.

These and other major defects were first exposed by safety advocates who petitioned the government and by reporters in the tradition of Bob Irvin of The Detroit News, who wrote over 35 articles on Chevrolet engine mounts until General Motors agreed to recall 6.7 million vehicles in 1971. Earlier on Tuesday, Reuters reported that Takata is unlikely to be dumped by its automaker customers given the cost and disruption of such a move – for now. “There should be some entity that says to the industry: ‘Look, every individual manufacturer doesn’t get to make a decision here.

Jackson said his chain, the largest in the U.S., is dealing with a confusing array of directives from manufacturers and the National Highway Traffic Safety Administration. At the same time, some auto makers have advised drivers awaiting replacement parts to bar passengers from sitting in the front seats or disconnect the air bags to prevent them from inflating. Jackson said, some manufacturers are authorizing replacement of the air bag inflators, some are telling dealers to remove passenger side air bags, others are telling dealers just to inform customers of the potential problem or put a warning sticker in the cars. In order to prevent the risk of death or serious injury, Congress empowered the agency to oblige auto companies to use alternate suppliers and independent repair shops to manufacture parts and make repairs to expedite a recall fix.

Certain car makers such as Ford Motor Co. and Mazda Motor Corp. are providing replacements only for vehicles registered in a few high-humidity southern states, Puerto Rico and the U.S. Department of Transportation Secretary Anthony Foxx said at a workshop in New York that he has asked the DOT inspector general’s office to review NHTSA’s handling of the Takata issue. “I’ve also asked our team to do a due diligence review,” Foxx said. “I make no apologies for taking a look at our safety posture as an agency. Yet the N.H.T.S.A. has never used this authority — even though it took General Motors from February to October to get enough parts to dealers to repair all the recalled ignition switches. It’s like a check up, and I think it’s a good practice for us to do.” He said one automaker advised dealers to tell consumers to continue to drive the car because the chance of an incident was rare. Jackson said the NHTSA should issue orders for a uniform approach, but has instead been “a Tower of Babel.” NHTSA’s acting administrator David Friedman last week apologized for mistakes his agency made in identifying models affected by the Takata air bag problems.

Only after a lengthy delay was the agency prodded, in 2009, into opening an investigation into whether the first two Honda recalls of Takata airbags were adequate. The industry needs to sit down and talk about standardizing the recalls, Jackson says. “I think there needs to be a process when a component fails across multiple manufacturers, that there’s a coherent, coordinated recall effort. Although the agency asked tough questions, it quickly closed the investigation after Takata hired a former senior N.H.T.S.A. official to represent the company. On Monday, consumers filed a proposed class action suit in Florida against Takata and several automakers including Honda Motor Co (7267.T) and Toyota Motor Corp (7203.T), claiming the companies defrauded them by concealing crucial information. A couple of months ago, Michael Johnson received a notice from BMW AG saying the passenger-side air bag in his 2003 325i sedan was at risk of rupturing in a crash but saying parts weren’t then available.

The Los Angeles resident is waiting to have the repair performed. “You get this notice that says, ‘hey, there is a problem and it can send pieces of metal flying into you, but we’ll let you know when we get parts,’” he said. “I wouldn’t feel good about having someone else, or a child, in the passenger seat knowing I’m putting them at risk,” he said. So far NHTSA says it hasn’t found problems outside of the following areas: Florida, Puerto Rico, limited areas near the Gulf of Mexico in Texas, Alabama, Mississippi, Georgia, and Louisiana, as well as Guam, Saipan, American Samoa, Virgin Islands and Hawaii. Even now — after reports of a third death in the United States associated with the airbags — the N.H.T.S.A. refuses to order a national recall, as Senators Richard Blumenthal of Connecticut and Edward Markey of Massachusetts have urged. In a statement, the agency said it is still investigating the “full nature of the defect,” but because air bag replacement parts are limited, it has asked car companies to focus repair efforts on Florida, other Gulf Coast states and U.S. territories.

Glassman and Paul Jackson Rice, who all served as chief counsel to the agency — have gone on to become consultants, lawyers or expert witnesses for auto companies. Under an agreement with NHTSA officials earlier this year, Takata said it “would not be expected to admit that its products contain such a defect” and the same applies for its auto maker customers, according to documents filed with the agency. Karl Brauer, a senior analyst with Kelley Blue Book’s KBB.com, owns a Ford GT but lives in California—outside the region where Ford has said it would to conduct repairs on the car.

Although Congress has given the N.H.T.S.A. regulatory tools that the agency failed to use, Congress has not given it the two things it needs most: sufficient funding, and the power to bring criminal penalties against auto companies. Since the National Traffic and Motor Vehicle Safety Act was enacted in 1966, the industry has blocked any meaningful provision for criminal penalties that would make company executives who concealed defects or decided not to recall dangerous vehicles subject to prison sentences. All auto companies should have an independent, government-certified safety ombudsman to investigate complaints from whistle-blowers and to report defects directly to the chief executive and the agency.

They must demonstrate that they see auto companies as an industry to be regulated, rather than partners whose profits and sales must be protected at the public’s expense.

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