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99–955 PDF 2016

S. HRG. 114–249 

UPDATE ON THE RECALLS OF DEFECTIVE 

TAKATA AIR BAGS AND NHTSA’S 

VEHICLE SAFETY EFFORTS 

HEARING 

BEFORE THE

COMMITTEE ON COMMERCE, 

SCIENCE, AND TRANSPORTATION 

UNITED STATES SENATE 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

JUNE 23, 2015 

Printed for the use of the Committee on Commerce, Science, and Transportation 

( 

(II) 

SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

JOHN THUNE, South Dakota, Chairman 

ROGER F. WICKER, Mississippi 

ROY BLUNT, Missouri 

MARCO RUBIO, Florida 

KELLY AYOTTE, New Hampshire 

TED CRUZ, Texas 

DEB FISCHER, Nebraska 

JERRY MORAN, Kansas 

DAN SULLIVAN, Alaska 

RON JOHNSON, Wisconsin 

DEAN HELLER, Nevada 

CORY GARDNER, Colorado 

STEVE DAINES, Montana 

BILL NELSON, Florida, Ranking 

MARIA CANTWELL, Washington 

CLAIRE MCCASKILL, Missouri 

AMY KLOBUCHAR, Minnesota 

RICHARD BLUMENTHAL, Connecticut 

BRIAN SCHATZ, Hawaii 

EDWARD MARKEY, Massachusetts 

CORY BOOKER, New Jersey 

TOM UDALL, New Mexico 

JOE MANCHIN III, West Virginia 

GARY PETERS, Michigan 

DAVID SCHWIETERT, Staff Director 

NICK ROSSI, Deputy Staff Director 

REBECCA SEIDEL, General Counsel 

JASON VAN BEEK, Deputy General Counsel 

KIM LIPSKY, Democratic Staff Director 

CHRIS DAY, Democratic Deputy Staff Director 

CLINT ODOM, Democratic General Counsel and Policy Director 

(III) 

C O N T E N T S 

Page 

Hearing held on June 23, 2015 ............................................................................... 1 

Statement of Senator Thune ................................................................................... 1 

Statement of Senator Nelson .................................................................................. 3 

Report dated June 22, 2015 entitled ‘‘Danger Behind the Wheel: The 

Takata Airbag Crisis and How to Fix Our Broken Auto Recall Process’’ 

by Minority Staff Office of Oversight and Investigations .......................... 4 

Statement of Senator McCaskill ............................................................................. 64 

Written statement of the American Car Rental Association and Consumers for Auto Reliability and Safety ....................................................... 65 

Statement of Senator Klobuchar ............................................................................ 68 

Statement of Senator Blumenthal .......................................................................... 71 

Statement of Senator Markey ................................................................................. 73 

Statement of Senator Peters ................................................................................... 75 

Statement of Senator Heller ................................................................................... 77 

Statement of Senator Daines .................................................................................. 78 

WITNESSES

Hon. Mark R. Rosekind, Ph.D., Administrator, National Highway Traffic Safety Administration, U.S. Department of Transportation ................................... 43 

Prepared statement .......................................................................................... 45 

Hon. Calvin L. Scovel III, Inspector General, U.S. Department of Transportation ..................................................................................................................... 48 

Prepared statement .......................................................................................... 51 

Kevin M. Kennedy, Executive Vice President of North America, TK Holdings 

Inc. (‘‘Takata’’) ...................................................................................................... 82 

Prepared statement .......................................................................................... 83 

Scott Kunselman, Senior Vice President and Head of Vehicle Safety and 

Regulatory Compliance, FCA US LLC ............................................................... 88 

Prepared statement .......................................................................................... 89 

Rick Schostek, Executive Vice President, Honda North America ....................... 90 

Prepared statement .......................................................................................... 92 

APPENDIX

Response to written questions submitted to Hon. Mark R. Rosekind by: 

Hon. John Thune .............................................................................................. 107 

Hon. Bill Nelson ............................................................................................... 109 

Response to written question submitted to Hon. Calvin L. Scovel III by: 

Hon. John Thune .............................................................................................. 112 

Response to written questions submitted to Kevin M. Kennedy by: 

Hon. John Thune .............................................................................................. 113 

Hon. Bill Nelson ............................................................................................... 114 

Hon. Richard Blumenthal ................................................................................ 115 

Response to written questions submitted to Scott Kunselman by: 

Hon. John Thune .............................................................................................. 116 

Hon. Roy Blunt ................................................................................................. 117 

Hon. Ron Johnson ............................................................................................. 118 

Hon. Bill Nelson ............................................................................................... 118 

Response to written questions submitted to Rick Schostek by: 

Hon. John Thune .............................................................................................. 119 

Hon. Roy Blunt ................................................................................................. 121 

Hon. Ron Johnson ............................................................................................. 121 

Hon. Bill Nelson ............................................................................................... 121 

(1) 

UPDATE ON THE RECALLS OF DEFECTIVE 

TAKATA AIR BAGS AND NHTSA’S 

VEHICLE SAFETY EFFORTS 

TUESDAY, JUNE 23, 2015 

U.S. SENATE, 

COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION, 

Washington, DC. 

The Committee met, pursuant to notice, at 10:06 a.m., in room 

SR–253, Russell Senate Office Building, Hon. John Thune, Chairman of the Committee, presiding. 

Present: Senators Thune [presiding], Blunt, Ayotte, Heller, Fischer, Moran, Gardner, Daines, Nelson, McCaskill, Klobuchar, 

Blumenthal, Markey, Booker, Manchin, and Peters. 

OPENING STATEMENT OF HON. JOHN THUNE, 

U.S. SENATOR FROM SOUTH DAKOTA 

The CHAIRMAN. Good morning. Welcome, everyone. This hearing 

will come to order. 

We have called this hearing for a very somber reason. Some defective airbags are hurting, rather than helping, people. We still 

haven’t figured out exactly why, and we need to figure out how to 

prevent these issues from occurring in the future. 

This is a pivotal time in vehicle safety. It is welcome news that 

cars are generally safer than they have ever been. Advances in vehicle technologies and safety innovations, as well as robust safety 

initiatives, have reduced the number of deaths on the road. Still, 

tragically, more than 30,000 people die every year due to motor vehicle accidents. 

Airbags are one of the most important vehicle safety innovations, 

and that is why it is so alarming that tens of millions of cars have 

potentially defective airbags. Today, we will be asking witnesses for 

an update on recall and remedy efforts for Takata airbag inflators, 

which have been allegedly linked to 8 deaths and over 100 injuries. 

The large number of vehicles recalled covers 11 auto manufacturers. The complexity of the different types of inflators, the lack of 

an identified root cause to date, and the age of the vehicles affected 

have made remedying this problem exceedingly difficult. But these 

challenges do not excuse the responsibilities of auto manufacturers, 

suppliers, and the National Highway Traffic Safety Administration, 

NHTSA, from their shared obligation to ensure vehicles are safe. 

The first priority should be fixing the recalled vehicles as soon 

as possible. NHTSA has also taken an unprecedented role, inserting itself in overseeing this process. Takata and other alternative 

2 

suppliers have ramped up production of replacement parts to increase supply, and the autos are seeking to contact affected vehicle 

owners and working with dealerships on swift repairs. 

Nevertheless, questions exist about whether the currently available replacements are truly safe. Takata is phasing out certain 

types of inflators, and testing is ongoing to determine the root 

cause or causes of the inflator defects. This testing will help to assess the scope of the recalls and safety of the replacement parts. 

These alarming recalls underscore the importance of clear and 

accurate information for consumers. NHTSA’s dedicated Takata recall website is an important step, but recall fatigue and confusion 

are growing. The large number of vehicles involved has resulted in 

delays for some consumer notice, and the number of times the 

same vehicle may be subject to recall may further perplex consumers. 

As we all know, completing a recall is not easy. With an all-time 

record last year of nearly 64 million automobiles subject to recall, 

I appreciate that NHTSA and the auto industry are looking for 

ways to improve the process. 

Identifying safety problems early is another key issue for both 

the industry and NHTSA. I look forward to hearing more about the 

Inspector General’s audit report, which raises serious questions 

about the agency’s abilities in this area. The audit identifies many 

instances in which the agency repeatedly dropped the ball in handling issues related to General Motors’ ignition switch defect. 

Weaknesses in NHTSA’s ability to conduct accurate data analysis and provide necessary training and supervision call into question whether the agency can effectively identify and investigate potential safety problems and carry out its safety mission. These findings are especially disconcerting given the scale and complexity of 

the Takata defects. 

I am pleased to know that Administrator Rosekind has concurred 

with all 17 of the Inspector General’s recommendations and has 

committed to implement them. 

There have been far too many troubling recalls throughout the 

agency’s existence. That is why I have worked with Senator Nelson 

to pass our Motor Vehicle Safety Whistleblower Act. This legislation seeks to encourage employees to report safety concerns before 

they become larger problems and to prevent loss of life and serious 

injuries resulting from safety defects. 

Despite a long vacancy with a Senate-confirmed leader, under 

Administrator Rosekind’s leadership, NHTSA has also been looking 

for ways to improve. There have been assessments of NHTSA and 

a plan for a path forward, but now is the time for accountability. 

The agency, automakers, their suppliers and dealers, and Congress 

must work together to reduce deaths and injuries on our Nation’s 

roadways. 

This committee will continue to conduct oversight of the Takata 

recalls and NHTSA’s vehicle safety efforts. I appreciate Takata’s 

general cooperation with the Committee’s requests to date. In fact, 

we just received another large production of documents from the 

company a few days ago. Some automakers are also producing documents to the Committee. And I am sure we will have more questions for NHTSA. 

3 

It is also important for consumers to check to see if their vehicle 

is subject to this or any recall. NHTSA has a vehicle identification 

number, or VIN, lookup tool online at safercar.gov. If you determine your vehicle is subject to a recall, please schedule an appointment to get it fixed with your closest dealership as soon as possible. 

Now I am pleased to welcome Administrator Rosekind to his first 

appearance before the Committee since his confirmation as the 

NHTSA Administrator last December. 

I also want to welcome Inspector General Scovel back to the 

Committee and our auto witnesses for this, our second full committee hearing on this important issue. 

So I want to thank all of our witnesses for being here today. I 

look forward to your testimony. 

And we will start with this first panel with Mr. Rosekind, followed by Mr. Scovel. 

Mr. Rosekind, please proceed. 

Oh, I am sorry. Excuse me. I apologize. My mistake. 

The Senator from Florida, our distinguished Ranking Member, 

please make your opening statement before we proceed to the 

panel. 

STATEMENT OF HON. BILL NELSON, 

U.S. SENATOR FROM FLORIDA 

Senator NELSON. Thank you, Mr. Chairman. 

And, if I may, we have had an investigation done, ‘‘Danger Behind the Wheel: The Takata Airbag Crisis and How to Fix Our Broken Auto Recall Process,’’ done by our minority committee staff. If 

I may have that entered into—— 

The CHAIRMAN. Without objection. 

Senator NELSON.—the record. 

[The report follows:] 

4 


623RPT1.eps
5 

TABLE OF CONTENTS

Executive Summary 

I. Background 

II. Timeline of the Takata Airbag Crisis 

III. Media Reports and Takata’s Internal Documents Raise Questions Regarding the 

Company’s Knowledge of Serious Safety and Quality Control Issues as Early as 

2001 

IV. Media Reports and Takata’s Internal Documents Illustrate Takata’s Efforts to 

Address the Impact of Moisture and Humidity on its Inflators 

V. Proposed Policy Changes to Quickly Detect and Address Future Auto Safety Defects 

A. NHTSA Improvements 

1. Increase Civil Penalty Authority 

2. Provide Enhanced and Independent Testing Capability 

3. Improve Recall Completion Rates 

4. Enact Whistleblower Legislation 

B. Safety Measures NHTSA, Takata, and Auto Manufacturers Should Undertake to Improve Recall Effectiveness 

1. Increase Ability to Effectively Respond to Safety Defects/Recalls 

2. Offer Loaner/Rental Cars When Recalls Involve Serious Safety Issues 

VI. Conclusion 

Appendices and Exhibits 

Appendix I: Chronology of Takata Airbag Events 

Appendix II: List of Vehicles Affected by Takata Airbag Recalls 

Exhibit A: March 22—April 5, 2011 E-mail Thread with Subject: ‘‘GPS audit’’ 

Exhibit B: March 30, 2011 E-mail with Subject: ‘‘Defects and defects and defects!!!!’’ 

Exhibit C: March 31, 2011 E-mail with Subject: ‘‘Reworking station 100 parts to 

120’’ 

Executive Summary 

Following reports of serious injury and death from airbags manufactured by TK 

Holdings Inc. (Takata) in numerous makes and models of vehicles—and claims of 

a delayed response from Takata, the automakers, and regulators—the Senate Commerce Committee held a hearing in November 2014 to determine the scope, potential cause, and appropriate Congressional response to this serious safety issue. After 

the hearing, then Commerce Committee Chairman Jay Rockefeller and Senator Bill 

Nelson requested briefings and documents from Takata, automakers, and the National Highway Traffic Safety Administration (NHTSA). Among other things, the 

documents provided to the Committee by Takata detailed the airbag inflator production process, the types of propellant used in these inflators, inflator failure modes 

analyses, and the alleged deaths and injuries caused by defective Takata airbags. 

Earlier this year, Chairman John Thune and Ranking Member Nelson made two additional requests for documents, mainly pertaining to airbag inflator testing programs and internal Takata safety inspections. To date, Committee minority staff 

has reviewed more than 13,000 documents provided by Takata that total more than 

90,000 pages. 

As further detailed in this report, it appears that Takata was aware, or should 

have been aware, of serious safety and quality control lapses in its manufacturing 

plants as early as 2001. Documents reviewed by Committee minority staff also indicate that Takata was informed of three serious incidents involving faulty inflators 

in the first half of 2007. Nonetheless, the first recall was not issued until November 

2008—more than a year later. 

In addition, internal e-mails obtained by the Committee suggest that Takata may 

have prioritized profit over safety by halting global safety audits for financial reasons. The report also sheds light on Takata’s effort to address the impact of moisture and humidity on its inflators, which has now been reported to play a role in 

causing inflator ruptures. Further, it appears that NHTSA, by not opening an invesVerDate Nov 24 2008 08:11 May 04, 2016 Jkt 075679 PO 00000 Frm 00009 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\99955.TXT JACKIE
6 

1Takata Saw and Hid Risk in Airbags in 2004, Former Workers Say, New York Times 

(Nov. 6, 2014). 2 National Highway Traffic Safety Administration, Air Bag Deployment (online at 

www.safercar.gov/Vehicle%20Shoppers/Air%20Bags/Air%20Bag%20Deployment). 3Takata, All About Airbags (online at www.takata.com/en/around/airbag01.html). 4 Car Industry Struggles to Solve Air Bag Explosions Despite Mass Recalls, Reuters (June 22, 

2014). 5 Id. 

6Takata Saw and Hid Risk in Airbags in 2004, Former Workers Say, supra n. 1. 7 49 Fed. Reg. 28962 (July 17, 1984). 

8Pub. L. No. 102–240 (1991). 

9Takata, Airbags (online at www.takata.com/en/products/airbag.html); Special Report: Deadly 

Airbags Backfire on Firm that Crossed ‘Dangerous Bridge,’ Reuters (Jan. 13, 2014). Autoliv and 

TRW are the other top three airbag manufacturers. Airbag Inflator Shortage Plagues Industry, 

Automotive News (Nov. 24, 2014). 

tigation until June 11, 2014, failed to promptly investigate Takata’s defective airbags. NHTSA conducted an investigation related to Takata airbag inflators in November 2009, but the investigation only dealt with the scope and timeliness of two 

previous recalls, and it was closed in May 2010. 

After more than 100 injuries and eight deaths allegedly caused by shrapnel from 

its rupturing airbags—over a period of more than 10 years—Takata cannot identify 

a root cause of these ruptures. Yet, Takata is currently producing hundreds of thousands of replacement inflators each month that may not completely eliminate the 

risk of airbag rupture. Overall, the Committee minority staff’s ongoing investigation 

reveals a pattern of failures and missteps that did not quickly or effectively respond 

to a serious safety defect. 

The recall process must be strengthened to address future defects that could cause 

serious injury or death. The Moving Ahead for Progress in the 21st Century Act 

(MAP–21), which was enacted in July 2012, took some important steps forward in 

this area by incentivizing employees to voluntarily share important safety information and protecting them from retaliation when they do so. Proposals that could 

strengthen NHTSA’s ability to prevent and respond to future safety recalls include 

increasing the agency’s civil penalty authority and expanding its ability to conduct 

independent testing. Steps must also be taken to improve recall completion rates 

and the automakers’ ability to appropriately respond when recalls are necessary. 

I. Background 

An airbag is a vehicle occupant restraint system that consists of a fabric cushion 

or envelope that opens rapidly in the event of a collision. When a crash is detected, 

a signal is sent to the inflator, which is composed of a steel canister that houses 

a propellant,1 and initiates a chemical reaction that causes the propellant to burn.2

The burning propellant emits a gas that rapidly inflates and deploys the fabric cushion.3 In some cases, the propellant in airbags manufactured by Takata burns too 

quickly.4 This can cause the inflator to rupture, shooting metal fragments of the inflator canister at the car’s occupants.5

Figure I: Airbag Inflator and Parts6

In July 1984, NHTSA amended Federal Motor Vehicle Safety Standard 208 to 

phase in a requirement that cars offer automatic occupant protection, such as airbags or automatic seatbelts.7 In 1991, Congress passed the Intermodal Surface 

Transportation Efficiency Act, which required cars built after September 1, 1997, to 

have airbags for the driver and right front passenger.8

Since 1987, Takata has supplied automakers with airbags and has become one of 

the three largest airbag manufacturers worldwide.9 In 1991, Takata began manufacturing airbag inflators in the U.S., and media reports suggest that in 2001 the company started using ammonium nitrate as the main ingredient in its propellant.10


623RPT2.eps
7 

10Takata’s Switch to Cheaper Airbag Propellant Is at Center of Crisis, New York Times 

(Nov. 19, 2014). 11 Id. 12TK Holdings Inc., Defect Information Report, PSDI, PSDI–4, and PSDI–4K Driver Air Bag 

Inflators (May 18, 2015), at 3. 13 Id. 14Takata Investigated Defective Air Bag Inflator as Early as 2003, Reuters (Dec. 3, 2014). 15Takata Saw and Hid Risk in Airbags in 2004, Former Workers Say, supra n. 1; TK Holdings 

Inc., Defect Information Report, PSDI, PSDI–4, and PSDI–4K Driver Air Bag Inflators, supra 

n. 12, at 3. 16 Air Bag Flaw, Long Known to Honda and Takata, Led to Recalls, New York Times 

(Sept. 11, 2014). 17TK Holdings Inc., Defect Information Report, PSDI, PSDI–4, and PSDI–4K Driver Air Bag 

Inflators, supra n. 12, at 3. 18Takata Saw and Hid Risk in Airbags in 2004, Former Workers Say, supra n. 1. 19 Id. 20 Id. 21Takata Narrative Response to Senate Commerce Committee (Dec. 12, 2014) at 5. 22 Air Bag Flaw, Long Known to Honda and Takata, Led to Recalls, supra n. 16. 23Letter from Kazuo Higuchi, Senior Vice President, Takata, to George Person, Chief, Recall 

Management Division, Office of Defect Investigation, National Highway Traffic Safety Administration, at 5 (Feb. 19, 2010) (online at www-odi.nhtsa.dot.gov/acms/cs/jaxrs/download/doc/ 

ACM13395661/INRL-RQ09004-39140P.pdf). 24Takata Response to Senate Commerce Committee, Exhibit A (Dec. 12, 2014); Takata Response to Senate Commerce Committee, Exhibit B (Mar. 27, 2015). 25 Air Bag Flaw, Long Known to Honda and Takata, Led to Recalls, supra n. 16. 26Letter from Higuchi to Person, supra n. 23, at 5–6. 27 Id. at 6. 

pany started using ammonium nitrate as the main ingredient in its propellant.10

Compared to its predecessor, tetrazole, ammonium nitrate allowed Takata to create 

smaller and cheaper airbag inflators that emit less toxic fumes, which, in turn, 

could reduce the risk of chemical burns or breathing problems when an airbag deploys.11 More than 14 years after the introduction of ammonium nitrate, however, 

this compound remains at the center of a safety crisis that has plagued Takata for 

more than a decade. 

II. Timeline of the Takata Airbag Crisis 

In 2003, the first known incident of a rupturing Takata airbag inflator occurred 

in a BMW vehicle in Switzerland.12 Takata’s investigation of the incident determined that the inflator, which was 17 months old at the time of the incident, ruptured as a result of an ‘‘overloading of propellant in the assembly of the inflator.’’ 13

Takata stated that this was an isolated event and unrelated to subsequent incidents.14

In 2004, the airbag in a 2002 Honda Accord ruptured in Alabama.15 Honda filed 

an early warning report with NHTSA, which was one of 245 reports filed that year 

about incidents that resulted in injury or death.16 Takata tentatively concluded that 

a compromised seal on the inflator or an overloading of propellant into the inflator 

might have caused the rupture.17 Honda said it was assured by Takata in 2004 that 

this incident was an anomaly.18 According to two former Takata employees interviewed by the New York Times, in the aftermath of this incident, Takata secretly 

conducted tests on 50 airbag inflators that were collected from vehicles sent to 

scrapyards.19 After two of these inflators cracked during testing, engineers began 

designing possible fixes in anticipation of a recall. The testing was suddenly shut 

down, however, and Takata executives ordered technicians to delete the testing 

data.20 In Takata’s response to the Committee’s request for more information about 

this testing, Takata stated that it never tested airbags recovered from scrapyards 

in 2004.21

The next known incidents of rupturing inflators did not occur until three years 

later.22 According to a 2010 letter from Takata to NHTSA, in 2007, Honda reported 

three additional episodes to Takata that occurred during the first half of 2007 23— 

all involved 2001 Honda Civics.24 According to media reports, Honda settled with 

the victims for undisclosed sums of money.25

Takata determined that all three rupture incidents involved inflators that were 

assembled between October 31 and November 15, 2000, and all contained propellant 

tablets manufactured in the same months.26 Focusing on the short time-frame in 

which these inflators and propellant were produced, Takata theorized that two manufacturing processes, which overlapped during this period, led to elevated moisture 

levels in the propellant.27 It appears Takata believed these elevated propellant 

moisture levels during the manufacturing process, when combined with the thermal 

cycling in vehicles, ‘‘could cause the propellant density to decline over time, and 

8 

28 Id. at 6. 29 Id. at 6. 30 Id. at 6–7 (TKH–SCS&T00002077–2078). 31 Id. at 7 (TKH–SCS&T00002078). 32 Id. at 7. 33This recall covered certain 2001 Honda Civics and Accords. Letter from William R. Willen, 

Managing Counsel, Product Regulatory Office, American Honda Motor Co., to Daniel C. Smith, 

Associate Administrator for Enforcement, National Highway Traffic Safety Administration (Nov. 

11, 2008) (online at www-odi.nhtsa.dot.gov/acms/cs/jaxrs/download/doc/ACM10641506/ 

RCDNN-08V593-1511.pdf). 34Letter from Higuchi to Person, supra n. 23, at 8. 35 Id. at 8–9 (TKH–SCS&T00002079–2080). 36 National Highway Traffic Safety Administration, ODI Resume, Recall Query, Close Resume, 

RQ09–004 (Nov. 2, 2009–May 6, 2010) (online at www-odi.nhtsa.dot.gov/acms/cs/jaxrs/ 

download/doc/ACM13978206/INCLA-RQ09004-5021.pdf). 37Letter from Higuchi to Person, supra n. 23, at 11 (TKH–SCS&T00002082). 38 Id. at 11–12. 39This recall involved certain 2001 Honda Civics and Accords, certain 2002 Honda Accords, 

and certain 2002 Acura 3.2TLs. Letter from William R. Willen, Managing Counsel, Product Regulatory Office, American Honda Motor Co., to Daniel C. Smith, Associate Administrator for Enforcement, National Highway Traffic Safety Administration (July 29, 2009) (online at 

www.autosafety.org/sites/default/files/09V259%20Part%20573.pdf). 40Letter from Higuchi to Person, supra n. 23, at 2. 41Takata Response to Senate Commerce Committee, Exhibit A (Dec. 12, 2014); Takata Response to Senate Commerce Committee, Exhibit B (Mar. 27, 2015). 42 National Highway Traffic Safety Administration, ODI Resume, Recall Query, Opening Resume, RQ09–004 (Nov. 2, 2009). 43 Id. 44Letter from Higuchi to Person, supra n. 23, at 12. 45Letter from Higuchi to Person, supra n. 23, at 12 (TKH–SCS&T00002083). 

such a decline in density could lead to overly energetic combustion during deployment of the air bag.’’ 28 This analysis was shared with Honda in September 2007, 

but a recall was not issued until more than a year later.29

To test this hypothesis, Takata conducted additional testing on inflators recovered 

from salvage yards and inflators provided by Honda, but the analysis was inconclusive.30 After the conclusion of Takata’s testing, the company learned of a fourth rupture incident.31 In October 2008, Takata recommended that Honda recall all vehicles equipped with propellant from the four suspect lots of inflators.32 The following 

month, in November 2008, Honda issued its first recall of vehicles with Takata airbags, which covered driver-side airbags in 3,940 cars in the U.S.33

Based on its testing of additional inflators, Takata shifted its focus from the assembly of the inflator to the production of the propellant.34 In 2009, Takata realized 

that its methodology for calculating propellant density in 2000 and 2001 could have 

led to invalid results.35 The density of the propellant in inflators recovered from 

Honda’s November recall that were produced on Takata’s Stokes press, a specific 

compression press used to form the propellant into tablets, was found to be low, 

which could leave the propellant ‘‘more susceptible to overly aggressive combustion.’’ 36 Takata also learned of additional malfunctions of inflators produced outside 

the range of the November 2008 recall.37

Takata presented this information to Honda in June 2009 and recommended expanding the recall to include all vehicles containing propellant manufactured on the 

Stokes press through February 2001.38 The following month, Honda announced its 

decision to recall approximately 440,000 vehicles in the U.S. due to a potential defect in driver-side airbags.39 Takata explained to NHTSA that it did not provide any 

inflators that were the same or substantially similar to those covered by the two 

recalls to any auto manufacturer other than Honda.40 Among the nine alleged incidents of rupturing inflators that occurred in 2009, all involving Honda vehicles, 

were two incidents in which the shrapnel from the airbag inflator appears to have 

killed the driver of the car.41

In November 2009, NHTSA opened an investigation related to Takata’s rupturing 

airbags.42 The agency explained that it needed ‘‘additional information from Honda 

and Takata to more fully evaluate the scope and timeliness’’ of the previous recalls.43

The second Honda recall covered approximately 10,000 vehicles outside the range 

that Takata had identified as containing the potentially defective inflators—primarily inflators with propellant produced after February 28, 2001—to allow Takata 

to assess whether the second recall addressed all potentially dangerous inflators.44

Testing of these inflators determined that the density of some of the propellant that 

was manufactured outside the period covered by the existing recalls was also low.45

In February 2010, Honda issued another recall, which expanded its second recall to 

9 

46Letter from Higuchi to Person, supra n. 23, at 13. 47 NHTSA, Close Resume, RQ09–004, supra n. 36. 48Letter from Jay Joseph, Senior Manager, Product Regulatory Office, American Honda Motor 

Co., Inc., to Claude Harris, Acting Administrator for Enforcement, National Highway Traffic 

Safety Administration (Apr. 27, 2011) (online at www.autosafety.org/sites/default/files/ 

imcelstaffluploads/Honda%20Airbag%2011V-260.pdf). 49 Id. 50Letter from Jay Joseph, Senior Manager, Product Regulatory Office, American Honda Motor 

Co., Inc., to Nancy Lewis, Acting Administrator for Enforcement, National Highway Traffic Safety Administration (Dec. 1, 2011) (online at www-odi.nhtsa.dot.gov/acms/cs/jaxrs/download/ 

doc/ACM19786131/RCDNN-11V260-5849.pdf). 51Takata Response to Senate Commerce Committee, Exhibit A (Dec. 12, 2014); Takata Response to Senate Commerce Committee, Exhibit B (Mar. 27, 2015). 52Letter from Kazuo Higuchi, Senior Vice President, TK Holdings, Inc., to Nancy Lewis, Associate Administrator of Enforcement, National Highway Traffic Safety Administration (Apr. 11, 

2013) (online at www-odi.nhtsa.dot.gov/acms/cs/jaxrs/download/doc/UCM436445/RCDNN13E017-5589.pdf). 53 Id. An ‘‘auto-reject’’ function can ‘‘detect and reject propellant wafers with inadequate compression by monitoring the compression load that had been applied.’’ Id. 54 Id. 55 Id. 56 Id. 57 Id. 58 Honda, Toyota, Nissan, Mazda, and BMW issued recalls. See Timeline—Takata Air Bag Recalls, Reuters (Nov. 25, 2014). 59Takata Response to Senate Commerce Committee, Exhibit A (Dec. 12, 2014); Takata Response to Senate Commerce Committee, Exhibit B (Mar. 27, 2015). 60Letter from Mike Rains, Government Affairs Specialist, TK Holdings, Inc., to Frank Borris, 

Director, Office of Defects Investigation, National Highway Traffic Safety Administration 

(June 11, 2014) (online at www-odi.nhtsa.dot.gov/acms/cs/jaxrs/download/doc/UCM457251/ 

INLE-PE14016-59600.pdf). 61TK Holdings Inc., Defect Information Report, SPI Passenger Air Bag Inflators (May 18, 

2015) at 4. 62 Id. 

include all vehicles with driver-side inflators containing propellant manufactured on 

the Stokes press.46 In May 2010, NHTSA closed its investigation into rupturing 

Takata airbags after determining that Honda did not fail to make timely defect decisions and that the scope of the previous recalls was appropriate.47

In April 2011, Honda expanded its three previous recalls because it was unable 

to account for approximately 2,400 replacement inflators that may have been installed in vehicles covered by previous recalls.48 To capture the entire population 

of vehicles in which these replacements could have been installed, Honda recalled 

833,277 vehicles.49 In December 2011, this recall was expanded to include an additional 272,779 vehicles.50 Between 2011 and 2012, 16 additional alleged incidents 

occurred, although Takata may not have been aware of some of the incidents until 

years later.51

Between February and March 2013, Takata learned of two manufacturing problems affecting the propellant tablets within certain passenger-side airbag inflators.52

Takata explained that one manufacturing issue occurred at its Moses Lake, Washington plant between April 13, 2000, and September 11, 2002, where some propellant tablets may not have been adequately compressed because the auto-reject function on the machine that pressed the propellant into tablets had been turned off by 

the machine operator.53 The other issue occurred at Takata’s Monclova, Mexico 

plant between October 4, 2001, and October 31, 2002, where some propellant tablets 

may have been exposed to moisture.54 Due to these manufacturing problems, Takata 

found that the propellant could potentially deteriorate, leading to over-aggressive 

combustion, which could cause the inflator to rupture.55 At the time, Takata was 

aware of six ruptures—four in the U.S. and two in Japan.56 Takata informed 

NHTSA in April 2013 that, based on these two manufacturing problems, a defect 

may exist in certain passenger-side airbag inflators in certain Honda, Toyota, Nissan, Mazda, GM, and BMW vehicles.57 In light of Takata’s defect report, most of 

these automakers issued recalls, but NHTSA did not reopen its investigation into 

rupturing Takata airbags.58 In 2013, 18 additional alleged incidents occurred.59

By May 2014, Takata was aware of six rupture incidents that occurred in vehicles 

in Florida and Puerto Rico that were not covered by previous recalls.60 In June 

2014, Takata notified automakers that some of its traceability records were incomplete, meaning Takata ‘‘could not identify with absolute certainty the propellant lots 

from which the propellant wafers in a specific inflator were taken.’’ 61 As a result, 

it was possible that propellant wafers had been stored at the Monclova plant for 

up to three months before being used in inflators.62 Based on these conclusions, 

10 

63 Id. The automakers who expanded existing recalls include Toyota, Honda, Nissan, Mazda, 

and BMW; Subaru issued a new recall. 64Letter from Rains to Borris, supra n. 60. 65 Id. Takata agreed to support regional recalls replacing driver-side airbags manufactured between January 1, 2004, and June 30, 2007, and passenger-side airbags manufactured between 

June 2000 and July 31, 2004. 66 Id. 67Letter from Mike Rains, Government Affairs Specialist, TK Holdings, Inc., to Frank Borris, 

Director, Office of Defects Investigation, National Highway Traffic Safety Administration (June 

25, 2014) (online at www-odi.nhtsa.dot.gov/acms/cs/jaxrs/download/doc/UCM457659/INLEPE14016-59647.pdf). 68The three ruptures include a driver-side airbag rupture in a 2005 Honda Civic (report received Aug. 2013), a passenger-side airbag rupture in a 2003 Toyota Corolla (report received 

Mar. 2014), and a driver-side airbag rupture in a 2005 Mazda 6 (report received Apr. 2014). 

National Highway Traffic Safety Administration, ODI Resume Investigation: PE 14–016 (June 

11, 2014) (online at www-odi.nhtsa.dot.gov/acms/cs/jaxrs/download/doc/UCM456824/INOAPE14016-9724.PDF). 69 Id. The three rupture incidents occurred in the following: a passenger-side airbag in a 2004 

Nissan Sentra; a driver-side airbag in a 2006 Dodge Charger; and a passenger-side airbag in 

a 2002 Toyota Corolla. 70 Id. 71Letter from Rains to Borris, supra n. 60. 72 NHTSA originally issued an alert on October 20, 2014, but this alert included erroneous 

entries of vehicle models. NHTSA released an updated consumer advisory on October 22, 2014. 

National Highway Traffic Safety Administration, Consumer Advisory: Vehicle Owners with Defective Airbags Urged to Take Immediate Action (Oct. 22, 2014) (online at www.nhtsa.gov/ 

About+NHTSA/Press+Releases/Vehicle-owners-with-defective-airbags-urged-to-take-immediateaction). See also NHTSA Releases Updated Takata Airbag Recalled Cars List, But It Still Has 

Errors, AutoBlog (Oct. 22, 2014). 73 Consumer Advisory: Vehicle Owners with Defective Airbags Urged to Take Immediate Action, 

supra n. 72. Auto manufactures covered under the recalls include Toyota, Honda, Mazda, BMW, 

Nissan, Mitsubishi, Subaru, Chrysler, Ford and General Motors. 74 Id. 75See e.g., Letter from David J. Friedman, Deputy Administrator, National Highway Traffic 

Safety Administration to Jay Joseph, Assistant Vice President, American Honda Motor Co. (Oct. 

Takata recommended expanding the recall of vehicles with certain passenger-side 

airbag inflators, which led five automakers to expand their 2013 recalls and one 

automaker to issue a new recall.63

Also in June 2014, officials from NHTSA’s Office of Defects Investigation (ODI) 

requested that Takata support field actions—essentially regional recalls—of suspect 

inflators in vehicles registered in humid areas.64 Even though, according to Takata, 

there was no evidence identifying a particular safety defect in inflators not recalled 

at the time, Takata agreed to support the requested regional recalls of driver-side 

and passenger-side airbag inflators in vehicles in Florida, Puerto Rico, Hawaii, and 

the Virgin Islands.65 Takata identified that certain Honda, Toyota, Nissan, Mazda, 

Ford, Chrysler, and BMW vehicles contained the inflators.66 Later that month, 

Takata determined that certain Subaru and Mitsubishi vehicles also contained the 

suspect inflators, increasing the number of automakers impacted by the potential 

defect to nine.67

On June 11, 2014, after receiving complaints of three Takata airbag ruptures 68— and then learning from Takata of three additional ruptures 69—NHTSA’s ODI 

opened an investigation ‘‘in order to collect all known facts from the supplier and 

the vehicle manufacturers that it believes may have manufactured vehicles 

equipped with inflators produced during the same period as those that have demonstrated rupture events.’’ 70 Because all six incidents occurred in the high absolute 

humidity climates of Florida and Puerto Rico, Takata theorized that humidity, in 

conjunction with potential manufacturing issues, might influence the stability of the 

propellant as it ages and thus contribute to the possibility of a rupture.71

On October 22, 2014, NHTSA released a consumer advisory urging owners of certain vehicle models made by the now ten affected automakers to respond to recall 

notices, some sent out 18 months prior, and act immediately to replace defective 

Takata airbags.72 The advisory noted that, from 2013 to 2014, approximately 7.8 

million vehicles were recalled as a result of faulty Takata airbags.73 David Friedman, NHTSA Deputy Administrator, stated, ‘‘Responding to these recalls, whether 

old or new, is essential to personal safety and it will help aid our ongoing investigation into Takata airbags and what appears to be a problem related to extended exposure to consistently high humidity and temperatures.’’ 74

On October 29, 2014, Deputy Administrator Friedman sent letters to the ten affected automakers urging them to ‘‘take aggressive and proactive action to expedite 

[their] remedy of the recalled vehicles and to supplement Takata’s testing with 

[their] own.’’ 75 He also asked for information on the steps the automakers were takVerDate Nov 24 2008 08:11 May 04, 2016 Jkt 075679 PO 00000 Frm 00014 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\99955.TXT JACKIE
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29, 2014) (online at www-odi.nhtsa.dot.gov/acms/cs/jaxrs/download/doc/UCM465685/INIMPE14016-14351.pdf). 76 Id. 77 National Highway Traffic Safety Administration, Special Order Directed to TK Holdings, 

Inc. (Oct. 30, 2014) (online at www-odi.nhtsa.dot.gov/acms/cs/jaxrs/download/doc/ 

UCM465855/INLM-PE14016-60576.pdf). A Special Order is issued pursuant to 49 U.S.C. 

§ 30166(g). It is equivalent to a subpoena and requires that the response be signed under oath 

by a responsible officer of the company. 78 Id. See also U.S. Regulator to Takata: Give Us Faulty Air-Bag Documents, Reuters (Oct. 30, 

2014). 79 National Highway Traffic Safety Administration, USDOT Calls for National Recall of Defective Takata Driver Side Air Bags (Nov. 18, 2014) (online at www.nhtsa.gov/About+NHTSA/ 

Press+Releases/DOT-calls-for-national-recall-of-takata-driver-air-bags). 80 National Highway Traffic Safety Administration, General Order Directed to Manufacturers, 

PE14–016 Air Bag Inflator Rupture (Nov. 18, 2014). 81 National Highway Traffic Safety Administration, Second Special Order Directed to TK Holdings, Inc., PE14–016 (Nov. 18, 2014). 82 USDOT Calls for National Recall of Defective Takata Driver Side Air Bags, supra n. 79. 83 Honda to Replace Airbags Throughout U.S., New York Times (Nov. 18, 2014). 84Senate Committee on Commerce, Science, and Transportation, Examining Takata Airbag 

Defects and the Vehicle Recall Process, 113th Cong. (2014). 85 Id. See also Frustrated Senators Blast Takata, Signal More Safety Legislation, Automotive 

News (Nov. 23, 2014). 86Letter from Chairman John D. Rockefeller, IV and Senator Bill Nelson to Shigehisa Takada, 

Chairman and Chief Executive Officer, Takata Corporation (Nov. 24, 2014). 87Letter from Frank S. Borris II, Director, Office of Defects Investigation, National Highway 

Traffic Safety Administration, to Kazuo Higuchi, Senior Vice President, TK Holdings, Inc. (Nov. 

26, 2014) (online at www-odi.nhtsa.dot.gov/acms/cs/jaxrs/download/doc/UCM467335/INRMPE14016-60978.pdf). 88 Id. at 3. 

ing to expedite production of replacements, including by obtaining additional airbag 

1suppliers, urging and incentivizing dealers to repair vehicles, and encouraging consumers to bring in vehicles for repair.76

The next day, NHTSA issued a Special Order to Takata demanding information 

on the defective airbags.77 The Special Order listed 36 requests, which covered documents that refer to manufacturing conditions and process changes, communications 

between Takata and its rivals as well as its customers, and a list of known deaths 

and injuries. The Special Order also requested documents cited in an October 17, 

2014, Reuters article, including a March 2011 e-mail from Takata supervisor Guillermo Apud with the subject ‘‘Defectos y defectos y defectos!!!!’’ 78

On November 18, 2014, NHTSA called for a national recall of certain driver-side 

airbags after learning of a rupture incident in a vehicle outside the existing regional 

recalls.79 NHTSA also issued a General Order to Takata and the ten affected automakers demanding a detailed report and production of documents related to the 

testing of Takata inflators outside the regional recall areas.80 NHTSA also issued 

a second Special Order to Takata, which compelled the company to provide documents and information related to the propellant within its inflators.81 NHTSA’s 

press release acknowledged Takata’s public concession that it had changed the 

chemical mix of its propellant in newly-designed inflators.82 Honda agreed to expand its recalls and replace defective inflators nationwide.83

On November 21, 2014, the Senate Commerce Committee held a hearing to examine the Takata airbag defects and the recall process.84 Hiroshi Shimizu, Senior Vice 

President of Global Quality Assurance, testified on behalf of Takata and apologized 

for the injuries and deaths caused by rupturing Takata airbags. At the hearing, Mr. 

Shimizu was unable to provide answers to important questions, including questions 

regarding the chemical compounds used in Takata’s airbags and the current production and safety testing of replacement airbags.85 Because Mr. Shimizu’s testimony 

left so many questions unanswered, then Chairman Rockefeller and Senator Nelson 

sent a letter to Takata requesting documents and information regarding the company’s defective airbags.86

On November 26, 2014, NHTSA sent Takata a Recall Request Letter formally demanding that Takata acknowledge the existence of a defect and issue a national recall for certain driver-side airbag inflators.87 Based on reports of ruptures outside 

the geographic areas covered under the regional recalls, NHTSA believed that an 

‘‘unreasonable risk posed by subject driver’s side airbag inflators may exist outside 

of the areas with high absolute humidity and therefore would not be mitigated by 

the current regional recall.’’ 88 On December 2, 2014, Takata responded to NHTSA’s 

12 

89Letter from Mike Rains, Director of Product Safety, TK Holdings Inc., to Frank Borris, Director, Office of Defects Investigation, National Highway Traffic Safety Administration (Dec. 2, 

2014) (online at www.autosafety.org/sites/default/files/imcelstaffluploads/Takata’s%20 

Dec%20%202%20response%20to%20NHTSA’s%20Nov%20%2026%20RRL.pdf). 90 Honda to Expand Airbag Recall Nationwide as Takata Resists, New York Times (Dec. 3, 

2014). 91 Honda, Mazda, BMW, Chrysler, and Ford expanded their recalls. See Id.; Mazda Says U.S. 

Recalls Over Takata Air Bags to be Expanded Nationwide, Reuters (Dec. 9, 2014); BMW Joins 

in Expansion of Takata Airbag Recalls, New York Times (Dec. 22, 2014); Chrysler Recalls 2.9 

Million U.S. Vehicles with Takata Airbags, Car and Driver (Dec. 19, 2014); Ford Recall of 

Takata Airbags to Extend Nationwide, New York Times (Dec. 18, 2014). 92 Automakers Choose Aerospace Firm to Run Takata Airbag Tests, Automotive News (Feb. 26, 

2015). 93 Automakers Select Orbital ATK to Lead Independent Review of Takata Airbag Inflators, 

Reuters (Feb. 26, 2015). 94 Id. 95 Each Special Order is subject to a civil penalty of $7,000 per day. Because, according to 

NHTSA, Takata was in violation of two Orders, it was fined $14,000 per day. See 49 U.S.C. 

§ 30165(a)(3); 49 C.F.R. § 578.6(a)(3). Letter from O. Kevin Vincent, Chief Counsel, National 

Highway Traffic Safety Administration, to Steven G. Bradbury, Counsel, Takata, Re: Failure to 

Fully Respond to Special Orders in NHTSA’s Investigation in PE14–016, Takata Airbag Inflator 

Rupture (Feb. 20, 2015) (online at www.nhtsa.gov/staticfiles/communications/pdf/Takata-civilpenalty-demand-02202015.pdf); see also NHTSA to Fine Takata $14K a Day for Failing to ‘Fully 

Cooperate’ in Airbag Probe, Automotive News (Feb. 20, 2015). 96Letter from Vincent to Bradbury, supra n. 95. 97 Id. 98Takata Responds to U.S. DOT and NHTSA Statements, Business Wire (Feb. 20, 2015). 99 National Highway Traffic Safety Administration, U.S. Transportation Secretary Foxx Announces Order to Preserve Defective Takata Air Bag Inflators for Ongoing Federal Investigation 

(Feb. 25, 2015) (online at www.nhtsa.gov/About+NHTSA/Press+Releases/2015/takata-orderedto-preserve-defective-air-bag-inflators). 100 National Highway Traffic Safety Administration, Preservation Order and Testing Control 

Plan (Feb. 25, 2010) (online at www-odi.nhtsa.dot.gov/acms/cs/jaxrs/download/doc/ 

UCM477397/INOT-EA15001-1908.pdf). 101 Id. 

Recall Request Letter stating that it firmly believed that the data and currently 

available information did not support a nationwide recall.89

By December 2014, more than 11 million vehicles in the U.S. had been recalled, 

and five deaths were linked to the defective Takata airbags.90 In addition to Honda, 

four auto manufacturers responded to the pressure from NHTSA to expand their 

Takata airbag-related recalls nationwide.91

Also in the same month, the automakers affected by the Takata airbag recalls 

formed a consortium to conduct an independent investigation into the root cause of 

the airbag ruptures. The consortium’s ten members include Honda, Toyota, FiatChrysler, BMW, Mazda, Ford, Subaru, Mitsubishi, General Motors, and Nissan.92

In February 2015, the group of automakers appointed former NHTSA Acting Administrator David Kelly as the project manager and coordinator and selected aerospace and defense technology company Orbital ATK to lead the review and testing 

of Takata inflators.93 The automakers hope that this industry-wide testing initiative 

will supplement Takata’s own testing and provide answers to questions surrounding 

the defective airbags.94

In February 2015, NHTSA announced a $14,000 per day fine against Takata for 

failing to fully respond to NHTSA’s Special Orders regarding Takata’s defective airbags.95 According to NHTSA, Takata was not ‘‘being forthcoming with the information that it is legally obligated to supply’’ as well as not being ‘‘cooperative in aiding 

NHTSA’s ongoing investigation of a potentially serious safety defect.’’ 96 NHTSA also 

warned Takata that an incomplete response to the Special Orders and civil penalties 

could be referred to the Department of Justice, which could take action in Federal 

court to compel Takata to fully respond.97 Takata responded by stating that the 

company had provided the agency with almost 2.5 million pages of documents and 

that it strongly disagreed with NHTSA’s characterization of the company’s cooperation.98

On February 25, 2015, NHTSA issued a Preservation Order requiring Takata to 

preserve inflators recovered from recalled vehicles.99 According to the Order, Takata 

is prohibited from destroying or damaging recovered inflators except for testing purposes and is required to implement a control plan for the ‘‘inspection, testing, or 

analysis of those inflators.’’ 100 Takata is also required to set aside ten percent of 

the inflators for private plaintiffs and must submit a protocol for third-party testing.101 NHTSA will have access to all testing data from Takata, as well as all other 

independent testing data, while also reserving the right to collect inflators for its 

13 

102 Id. 103 U.S. Orders Takata to Preserve Evidence in Air-Bag Probes, Bloomberg (Feb. 25, 2015). 104Takata, Protocol Under NHTSA Preservation Order (Apr. 23, 2015) (online at www- odi.nhtsa.dot.gov/acms/cs/jaxrs/download/doc/UCM477398/INOT–EA15001–1909.pdf). 105 Id. The Protocol explains that Takata will not provide inflators for testing if fulfilling the 

request ‘‘would reduce the number of inflators that have been set aside in any classification 

below 70 percent of the number of inflators then remaining in the relevant set-aside at the time 

the request is fulfilled.’’ 106 Id. 107See Toyota, Part 573 Safety Recall Report 15V–286 (May 13, 2015) (online at wwwodi.nhtsa.dot.gov/acms/cs/jaxrs/download/doc/UCM478670/RCLRPT-15V286-6231.PDF); 

Toyota, Part 573 Safety Recall Report 15V–285 (May 13, 2015) (online at wwwodi.nhtsa.dot.gov/acms/cs/jaxrs/download/doc/UCM478665/RCLRPT-15V285-2813.PDF); 

Toyota, Defect Information Report 15V–284 (May 13, 2015) (online at www-odi.nhtsa.dot.gov/ 

acms/cs/jaxrs/download/doc/UCM478820/RCORRD-15V284-0712.pdf); Nissan, Defect Information Report 15V–287 (May 14, 2015) (online at www-odi.nhtsa.dot.gov/acms/cs/jaxrs/ 

download/doc/UCM479142/RCORRD-15V287-3274.pdf). 108Toyota, Defect Information Report 15V–284, supra n. 107. 109Toyota and Nissan Recall 6.5 Million More Vehicles Over Takata Airbags, New York Times 

(May 14, 2015). 110 National Highway Traffic Safety Administration, Consent Order, EA15–001 Air Bag Inflator Rupture (May 18, 2015) (online at www.safercar.gov/staticfiles/safercar/recalls/consentorder-takata-05182015.pdf). 111 National Highway Traffic Safety Administration, Department of Transportation Announces 

Steps to Address Takata Airbag Defects (May 19, 2015). The driver-side airbag inflator DIR 

notes that the defect potentially affects 17.6 million inflators. TK Holdings Inc., Defect Information Report PSDI, PSDI–4, and PSDI–4K, supra n. 12, at 2. The DIRs for passenger-side airbag 

inflators note that 16.2 million inflators may be affected by the defect. TK Holdings Inc., Defect 

Information Report SPI, supra n. 61, at 2 (7.7 million); TK Holdings Inc., Defect Information 

Report PSPI–L Passenger Air Bag Inflators (May 18, 2015) at 2 (5.2 million); TK Holdings Inc., 

Defect Information Report PSPI Passenger Air Bag Inflators, at 1 (3.3 million). 112TK Holdings Inc., Defect Information Report SPI, supra n. 61, at 3. Takata’s three other 

DIRs offer a similar explanation of the defect. See also TK Holdings Inc., Defect Information 

Report PSDI, PSDI–4, and PSDI–4K, supra n. 12, at 3; TK Holdings Inc., Defect Information 

Report PSPI–L, supra n. 111, at 2; TK Holdings Inc., Defect Information Report PSPI supra n. 111, at 2. 

own testing.102 In conjunction with announcing the Order, Secretary of Transportation Anthony Foxx revealed that NHTSA upgraded its investigation to an Engineering Analysis, a formal step in the defect investigation process which signals a 

belief in the existence of a safety defect.103

On April 23, 2015, NHTSA published the Protocol submitted by Takata, as demanded by the Preservation Order, to ‘‘establish a framework under which the ten 

vehicle manufacturers[,] . . . private parties to civil litigation, or a consortium of 

the [automakers] or private parties may apply for and potentially receive Takata inflators for testing provided they satisfy certain legal and safety requirements.’’ 104

Under the Protocol, automakers or private plaintiffs must submit an application 

that identifies the number of requested inflators and, if the applicant desires a specific category of inflators, also identifies the inflators by type, automaker, state from 

which the inflators were obtained, and vehicle year and model. Takata will then determine whether it has a sufficient supply of inflators in the relevant classification 

to fulfill the request. If a request will cause Takata’s supply of inflators within a 

classification to fall below a specified minimum,105 Takata will deny or modify the 

request, unless the party making the request has written approval from NHTSA to 

receive the inflators.106

On May 13, 2015, Toyota announced the recall of approximately 637,000 vehicles 

in the U.S., and Nissan announced the recall of approximately 263,000 vehicles in 

the U.S.107 According to Toyota’s Defect Information Report (DIR) filed with 

NHTSA, Toyota tested recovered recalled inflators and found that there was ‘‘insufficient air sealing at the initiator seal ring’’ in some of the inflators.108 Because the 

inflators were not airtight, moisture could potentially intrude over time.109

On May 18, 2015, Takata filed four DIRs with NHTSA and entered into a Consent 

Order.110 The DIRs estimated that more than 17 million driver-side inflators and 

more than 16 million passenger-side inflators have been installed in vehicles in the 

U.S. as both original and remedy parts.111 In the DIRs, Takata explained ‘‘that a 

defect related to motor vehicle safety may arise in some of the subject inflators.’’ 112

Takata’s explanation of the defect in one type of passenger-side airbag inflator 

states as follows: 

The propellant wafers in some of the subject inflators may experience an alteration over time, which could potentially lead to over-aggressive combustion in 

the event of an air bag deployment. Depending on the circumstances, this poVerDate Nov 24 2008 08:11 May 04, 2016 Jkt 075679 PO 00000 Frm 00017 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\99955.TXT JACKIE
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113TK Holdings Inc., Defect Information Report SPI, supra n. 61, at 3. See also TK Holdings 

Inc., Defect Information Report PSDI, PSDI–4, and PSDI–4K, supra n. 12, at 3; TK Holdings 

Inc., Defect Information Report PSPI–L, supra n. 111, at 2; TK Holdings Inc., Defect Information Report PSPI, supra n. 111, at 2. 114TK Holdings Inc., Defect Information Report SPI, supra n. 61, at 3. 115TK Holdings Inc., Defect Information Report SPI, supra n. 61, at 6. See also TK Holdings 

Inc., Defect Information Report PSDI, PSDI–4, and PSDI–4K, supra n. 12, at 4–5; TK Holdings 

Inc., Defect Information Report PSPI–L, supra n. 111, at 5; TK Holdings Inc., Defect Information Report PSPI, supra n. 111, at 4–5. 116See TK Holdings Inc., Defect Information Report PSDI, PSDI–4, and PSDI–4K, supra n. 12, at 5; TK Holdings Inc., Defect Information Report SPI, supra n. 61, at 7; TK Holdings Inc., 

Defect Information Report PSPI–L, supra n. 111, at 5–6; TK Holdings Inc., Defect Information 

Report PSPI, supra n. 111, at 5–6. 117TK Holdings Inc., Defect Information Report PSPI–L, supra n. 111, at 5. 118 National Highway Traffic Safety Administration, Consent Order, EA15–001 Air Bag Inflator Rupture (May 18, 2015) at 3–4. 119 Id. at 3. 120 National Highway Traffic Safety Administration, Department of Transportation Announces 

Steps to Address Takata Airbag Defects (May 19, 2015) (online at www.nhtsa.gov/ 

About+NHTSA/Press+Releases/DOT-action-on-takata-air-bag-defects). 121 Id. See also Flawed Takata Air Bags in 34 Million Vehicles Lead to Biggest Recall in History, Washington Post (May 19, 2015). 

tential condition could create excessive internal pressure when the air bag is 

deployed, which could result in the body of the inflator rupturing upon deployment. Based upon Takata’s investigation to date, the potential for such ruptures 

may occur in some of the subject inflators after several years of exposure to persistent conditions of high absolute humidity. In addition, Takata’s test results 

and investigation indicate that this potential for rupturing may also depend on 

other factors, including vehicle design factors and manufacturing variability. 

. . . In the event of an inflator rupture, metal fragments could pass through 

the air bag cushion material, which may result in injury or death to vehicle occupants.113

In addition, in certain passenger-side airbag inflators, Takata is aware of an issue 

with the inflators’ tape seals, which could allow leaks that increase the potential 

for moisture to seep into the inflators.114

The DIRs also reveal Takata’s preliminary conclusions from testing and investigation conducted by Takata and an independent research firm, Fraunhofer ICT. Based 

on testing thus far, Takata has reached some preliminary conclusions: 

It appears that the inflator ruptures have a multi-factor root cause that includes the slow-acting effects of a persistent and long term exposure to climates 

with high temperatures and high absolute humidity. Exposure over a period of 

several years to persistent levels of high absolute humidity outside the inflator, 

combined with the effects of thermal cycling, may lead to moisture intrusion in 

some inflators by means of diffusion or permeation. Fraunhofer ICT has identified the possibility in these climates for moisture intrusion into the inflator over 

time and a process by which the moisture may slowly increase the porosity of 

the propellant within the inflator. Fraunhofer ICT’s analysis also indicates that 

the design of the inflator and the grain (shape) of the propellant can affect the 

likelihood that the porosity change will occur, as can manufacturing variability. 

The results of the Fraunhofer ICT research to date are consistent with the geographic location and age of the inflators that have ruptured in the field and in 

Takata’s testing. Takata’s testing also indicates that the design of the vehicle 

and the design of the air bag module are associated with differences in outcomes.115

Takata’s DIRs describe prioritizing the replacement of defective inflators in four 

phases, generally based upon the risk that exists as a result of geographic location 

and age of the inflators.116 In addition, pursuant to the Consent Order, Takata 

plans to continue its testing of the defective inflators.117 Under the Consent Order, 

NHTSA’s investigation will remain open and may involve meeting with Takata employees, conducting depositions of Takata employees, requesting information, and 

reviewing all test results and data.118 The Order also explains that NHTSA will not 

be seeking civil penalties beyond those that are applicable before May 18, 2015.119

On May 19, 2015, NHTSA announced the events of the previous day, including 

the expansion of the number of vehicles to be recalled due to defective Takata airbag inflators.120 According to NHTSA, the recalls include nearly 34 million vehicles, 

potentially becoming the largest recall of any consumer product in U.S. history.121

15 

122 Exclusive: Confusion Clouds Count of Cars Hit by Takata Air Bag Recall, Reuters (June 

10, 2015). 123 National Highway Traffic Safety Administration, Notice of Intent to Open a Coordinated 

Remedy Program Proceeding for the Replacement of Certain Takata Air Bag Inflators, 80 Fed. 

Reg. 29791 (May 22, 2015) (Notice) (online at www.federalregister.gov/a/2015-12449). 124 Id. 125 Honda, Part 573 Safety Recall Report 15V–320 (June 1, 2015) (online at wwwodi.nhtsa.dot.gov/acms/cs/jaxrs/download/doc/UCM479494/RCLRPT-15V320-0154.PDF). 126 Id. 127 National Highway Traffic Safety Administration, Notice of Coordinated Remedy Program 

Proceeding for the Replacement of Certain Takata Air Bag Inflators, 80 Fed. Reg. 32197 (June 

5, 2015) (online at www.federalregister.gov/a/2015-13756). 128 Id. 129 Id. 130Takata Response to Senate Commerce Committee, Exhibit A (Dec. 12, 2014); Takata Response to Senate Commerce Committee, Exhibit B (Mar. 27, 2015). 131 Honda Confirms 7th Death from Takata Airbags, Automotive News (June 12, 2015); Statement from American Honda Motor Co., Inc., Confirmed Fatality Related to the Rupture of a 

Takata Airbag Inflator in Lafayette, Louisiana (June 12, 2015). 132 Honda Reports Eighth Death From Exploding Takata Air Bags, Associated Press (June 19, 

2015); Statement from American Honda Motor Co., Inc., Re: Confirmed Fatality Related to the 

Rupture of a Takata Airbag Inflator in Los Angeles, CA on September 7, 2014 (June 19, 2015). 133TK Holdings Inc., Defect Information Report SPI, supra n. 61; TK Holdings Inc., Defect 

Information Report PSDI, PSDI–4, and PSDI–4K, supra n. 12; TK Holdings Inc., Defect Information Report PSPI–L, supra n. 111; and TK Holdings Inc., Defect Information Report PSPI, 

supra n. 111. 

However, according to news reports, the number of vehicles affected may be less 

than half the approximately 34 million initially estimated by NHTSA.122

To prioritize and organize the various auto manufacturers’ recalls, on May 22, 

2015, NHTSA filed a notice of intent to open a coordinated remedy program for the 

replacement of defective Takata airbag inflators.123 The goal of the notice is to consider whether—and, if so, how—NHTSA will exercise its authority to organize and 

prioritize the recall and remedy programs. Specifically, as part of this proceeding, 

NHTSA requests comments on how to order sourcing of the replacement inflators, 

whether NHTSA should order the manufacturers to prioritize certain regions or vehicles, and whether NHTSA should order re-replacements for replacement inflators 

if Takata cannot demonstrate that its replacements are safe.124

On June 1, 2015, Honda announced a recall of driver-side airbag inflators in approximately 5.1 million vehicles, including 10 different Honda and Acura models.125

The recall covered inflators that were installed at the time of manufacture as well 

as replacement inflators that had been installed as part of prior recalls of Takata 

inflators.126

On June 5, 2015, NHTSA published a Notice of Coordinated Remedy Program 

Proceeding for the Replacement of Certain Takata Air Bag Inflators in the Federal 

Register.127 NHTSA explained that the agency is ‘‘considering issuing one or more 

administrative orders that would coordinate remedy programs associated with defective Takata air bag inflators.’’ 128 Coordination of the remedy programs could include 

acceleration, prioritization, organization, and/or phasing of the remedy programs.129

According to Takata’s responses to the Committee, as of the end of January 2015, 

Takata’s defective airbags had allegedly caused over 100 injuries and six deaths, 

with many of these alleged incidents occurring in Florida, followed by Puerto Rico, 

Texas, and California.130 In addition, on June 12, 2015, Honda confirmed a seventh 

death resulting from a Takata airbag that ruptured in a 2005 Honda Civic on April 

5, 2015, in Lafayette, Louisiana.131 Most recently, on June 19, 2015, Honda confirmed an eighth death, which occurred in September 2014 as a result of a rupturing airbag in a rented 2001 Honda Civic in Los Angeles.132 In Takata’s recent 

filings with NHTSA, the company reported 84 known rupture incidents.133

16 

134Law Office of Jason Turchin (online at www.floridapersonalinjuryattorneysblog.com/2015/ 

04/2003-honda-civic-airbag-rupture-victim-retains-airbag-attorney-jason-turchin.html). 135 Images provided to the Committee minority staff by Jason Turchin, Esq. 

Figure II: Piece of Metal Shrapnel From A Takata Airbag 134

Piece of metal shrapnel recovered from the neck of a Florida resident after the 

airbag ruptured in his 2003 Honda Civic on March 20, 2015. 

Figure III: Airbag Cushion With Holes Caused By Shrapnel 135

III. Media Reports and Takata’s Internal Documents Raise Questions 

Regarding the Company’s Knowledge of Serious Safety and Quality 

Control Issues as Early as 2001 

Media reports and internal Takata documents reviewed by Committee minority 

staff, including audit and engineering reports, internal presentations, and e-mails, 

raise questions regarding Takata’s commitment to ensuring the highest standards 

of quality controls. A Reuters investigation suggests that quality issues date back 

to 2001, when engineers in Takata’s Monclova, Mexico facility identified a range of 

problems that included rust and faulty inflator welding, which they said could have 

caused inflators to fail.136 In 2002, the plant tracked 60 to 80 defects per one million 

inflators shipped by Takata, which is six to eight times above the company’s quality 


623RPT3.eps 623RPT4.eps
17 

136Takata Engineers Struggled to Maintain Air Bag Quality, Documents Reveal, Reuters (Oct. 

17, 2014). 137 Id. 138Takata Saw and Hid Risk in Airbags in 2004, Former Workers Say, supra n. 1. 139 Id. 140 Id. 141 Id. 142Takata Engineers Struggled to Maintain Air Bag Quality, Documents Reveal, supra n. 136. 143Special Report: Plant with Troubled Past at Center of Takata Air Bag Probe, Reuters 

(Nov. 20, 2014). 144 Id. 145 Id. 146 Id. 147 Id. 148 Id. 149Takata Saw and Hid Risk in Airbags in 2004, Former Workers Say, supra n. 1. 150 Id. 151 Id. 152 Id. 153 Id. 154 Id. 155 Id. 

caused inflators to fail.136 In 2002, the plant tracked 60 to 80 defects per one million 

inflators shipped by Takata, which is six to eight times above the company’s quality 

control limit, according to an internal presentation.137

A New York Times review of internal Takata documents, e-mails, photos, videos, 

and regulatory filings uncovered instances of employees raising concerns that transportation mishaps were resulting in the delivery of wet or damaged airbag units to 

car manufacturers.138 One manager wrote an e-mail to colleagues in which he complained that quality checks that existed to ensure the inflators stayed dry, such as 

hosing down trucks to check for leaks, were being ignored.139 ‘‘The whole situation 

makes me sick,’’ he wrote.140 In addition, footage from closed-circuit television 

showed forklifts dropping stacks of airbag inflators, which at times were not properly examined to ensure they were not damaged, according to former quality-control 

managers.141 In 2005, a U.S. consulting firm found a pattern of bad welding, and, 

according to engineering presentations, on at least three occasions between 2005 

and 2006, Takata engineers identified leaks in inflators made in Monclova.142

According to a Reuters report based on interviews with 21 current and former 

Takata employees and consultants, managers within Takata raised concerns that 

workers were breaking quality rules to increase the output of inflators.143 Employees also expressed concerns over the pressures placed on them by managers.144 For 

example, Alejandro Perez, a former Takata facility manager, told Reuters the pressure to restart and make up for lost production after a March 2006 explosion at the 

Monclova plant was unrelenting, particularly from managers based in the U.S. who 

had been flown to Mexico.145

Takata workers also explained that employees were encouraged to meet certain 

quotas of inflators.146 ‘‘If you didn’t make it, you would be behind and they wouldn’t 

pay you a productivity bonus,’’ according to Jose Sanchez, a former Takata employee 

who made inflators from 2004 to 2010.147

Workers at Takata’s Moses Lake plant, which also manufactured inflators, told 

a similar story of managers who emphasized output quotas, especially as demand 

for cars and SUVs grew.148 Two former quality control managers at Takata’s main 

distribution center in Texas told the New York Times that a series of quality problems were encountered as Takata tried to fulfill the increasing demand for its airbags.149

Production facilities would resist taking back potentially damaged or wet inflators 

as Takata struggled to meet this increased demand.150 As automakers cut costs by 

implementing ‘‘just-in-time’’ production, meaning parts were only to arrive at assembly plants on an as-needed basis, pressure was placed on Takata to meet tight delivery schedules.151 Workers were told that if an automaker was forced to delay production due to a late shipment, the parts supplier would be fined tens of thousands 

of dollars for every minute of lost production.152 ‘‘That put a lot of pressure and incentive on us to never miss a shipment,’’ one of the former managers told the New 

York Times.153 ‘‘I’d argue, ‘what if my daughter bought the car with the bad airbag?’ 

But the plant would tell us, ‘Just ship it.’ ’’154

In April 2009, engineers reportedly scrambled to fix a flaw in a machine in 

Monclova that pressed the propellant into tablets.155 According to a June 2009 internal presentation reviewed by the New York Times, ‘‘inflaters tested from multiple 

18 

156 Id. 157 National Highway Traffic Safety Administration, Recall 08V–593 (Nov. 14, 2008); National 

Highway Traffic Safety Administration, Recall 09V–259 (July 8, 2009); National Highway Traffic 

Safety Administration, Recall 10V–041 (Feb. 11, 2010). 158Takata Engineers Struggled to Maintain Air Bag Quality, Documents Reveal, supra n. 136. 159Takata Response to Senate Commerce Committee (Mar.13, 2015) (TKH– 

SCS&T00045772lT0001). 160Takata Response to Senate Commerce Committee (Mar. 13, 2015) (TKH– 

SCS&T00045772lT0002). 161Takata Engineers Struggled to Maintain Air Bag Quality, Documents Reveal, supra n. 136. 162Takata Response to Senate Commerce Committee (Feb. 3, 2015) (TKH–SCS&T00011507). 163Takata Response to Senate Commerce Committee (Mar. 23, 2015) (TKH– 

SCS&T00060737lT0002). 164Takata Engineers Struggled to Maintain Air Bag Quality, Documents Reveal, supra n. 136. 165Takata Engineers Struggled to Maintain Air Bag Quality, Documents Reveal, supra n. 136. 166Plant with Troubled Past at Center of Takata Air Bag Probe, supra n. 143. 167 Id. 168 Id. 169 Id. 170 Id. 171 Id. 172 Id. 173Takata Response to Senate Commerce Committee (Mar. 23, 2015) (TKH–SCS&T00060922). 174Takata Response to Senate Commerce Committee (Mar. 13, 2015) (TKH–SCS&T00050595). 175Takata Response to Senate Commerce Committee (Mar. 13, 2015) (TKH–SCS&T00050617). 176Takata Response to Senate Commerce Committee (Mar. 23, 2015) (TKH–SCS&T00060924). 177Takata Response to Senate Commerce Committee (Mar. 23, 2015) (TKH–SCS&T00060923). 178Takata Response to Senate Commerce Committee (Mar. 23, 2015) (TKH–SCS&T00060922– 

TKH–SCS&T00060923). 

propellant lots showed aggressive ballistics.’’ 156 In March 2011—after three Takata 

airbag recalls had already been issued by one automaker 157—Guillermo Apud, a supervisor at the Monclova plant, sent an e-mail with the subject ‘‘Defectos y defectos 

y defectos!!!!’’ 158

In the full e-mail, which was reviewed by Committee minority staff, Mr. Apud explained that an automaker had reported receiving an improperly welded inflator 

and that 38 complete inflators had to be thrown out that day due to incorrect assembly.159 He wrote, ‘‘We cannot be faced with findings/defects of this sort and NOT 

do ANYTHING’’ 160 and ‘‘A part that is not welded = one life less, which shows we 

are not fulfilling the mission.’’ 161 A follow-up e-mail from a Takata quality engi- neer 162 reiterated Apud’s concerns: ‘‘We are in a very critical situation because of 

the most recent problems that we have detected on the line. Situations like this can 

give rise to a Recall.’’ 163 According to Reuters, after this incident, inspections at the 

plant were tightened.164

Nonetheless, according to media reports, serious lapses in quality control continued. In April 2011, Apud told fellow Takata supervisors that chewing gum had been 

found in an inflator, which he described as one of several ‘‘grave problems’’ in the 

Monclova plant’s inflator production.165 The following month, Apud reprimanded 

employees for attempting to fix defective parts on the inflator assembly line—a practice Takata had prohibited in order to reduce the likelihood of faulty parts being 

shipped to automakers.166 He wrote, ‘‘Rework on the line is PROHIBITED!!!!’’ 167

‘‘We can’t have leaders/materials people/operators REWORKING material left and 

right without ANY control, this is why we have defect upon defect,’’ he continued.168

‘‘We need to change NOW!’’ 169

According to Reuters, in 2012, Takata workers in Monclova used the wrong parts 

when assembling inflators, according to documents Takata and automakers filed 

with NHTSA.170 More than 1350,000 vehicles from three automakers were later recalled due to that defect.171 According to the explanation Takata provided to regulators in Japan, the mistake was possible because parts bins were kept too close together.172

E-mails reviewed by Committee minority staff also indicate that—due to financial 

reasons—Takata’s global safety audits were halted from 2009 until 2011.173 In a 

March 2011 e-mail, a Takata senior vice president in charge of inflators 174 asked 

the global director of inflator and propellant safety 175 when he planned to audit inflator operations at the Monclova and Moses Lake plants.176 When the safety director replied that the plan was to audit North America in the fall, the vice president 

said, ‘‘Don’t wait till Fall’’ and advised him to complete the audits soon, adding, 

‘‘Please help.’’ 177 The safety director replied, ‘‘I would like to perform a mini audit 

at Moses Lake (Propellant and Assembly), Monclova (Assembly and Propellant Handling/Storage not CAP), and Monterrey (Steering wheels)’’ and proposed dates in 

April and May 2011 to avoid conflicts with other scheduled audits.178

19 

179Takata Response to Senate Commerce Committee (Mar. 23, 2015) (TKH–SCS&T00060913); 

Plant with Troubled Past at Center of Takata Air Bag Probe, supra n. 143. 180Takata Response to Senate Commerce Committee (Feb. 3, 2015) (TKH–SCS&T00021010). 181Takata Response to Senate Commerce Committee (Mar. 23, 2015) (TKH– 

SCS&T00060731lT0005). 182Takata Response to Senate Commerce Committee (Mar. 23, 2015) (TKH– 

SCS&T00060731lT0003). 183 Id. 184Takata Response to Senate Commerce Committee (Mar. 13, 2015) (TKH–SCS&T00045775); 

Plant with Troubled Past at Center of Takata Air Bag Probe, supra n. 143. 185Takata Response to Senate Commerce Committee (Mar. 13, 2015) (TKH–SCS&T00045775). 186Takata Response to Senate Commerce Committee (Mar. 13, 2015) (TKH–SCS&T00045776). 187Takata Response to Senate Commerce Committee (Mar. 23, 2015) (TKH–SCS&T00060725); 

Plant with Troubled Past at Center of Takata Air Bag Probe, supra n. 143. 188Takata Response to Senate Commerce Committee (Mar. 23, 2015) (TKH–SCS&T00060839). 189Takata Response to Senate Commerce Committee (Mar. 23, 2015) (TKH– 

SCS&T00064854lT0002). 190Takata Response to Senate Commerce Committee (Mar. 23, 2015) (TKH– 

SCS&T00065182lT0001). 191Takata Response to Senate Commerce Committee (Mar. 23, 2015) (TKH– 

SCS&T00064854lT0001). 192 Id. 193Takata Response to Senate Commerce Committee (Mar. 13, 2015) (TKH–SCS&T00052964). 194Takata Response to Senate Commerce Committee (Mar. 23, 2015) (TKH– 

SCS&T00064854lT0001). 195Takata Response to Senate Commerce Committee (Mar. 23, 2015) (TKH–SCS&T00060839). 196Takata Response to Senate Commerce Committee (Feb. 3, 2015) (TKH–SCS&T00044269). 197Takata Response to Senate Commerce Committee (Feb. 3, 2015) (TKH–SCS&T00044271– 

44273). 

The Takata global safety director was then dispatched from the U.S. to Monclova 

in May 2011.179 A couple weeks before his visit, an e-mail was sent by the advanced 

product quality planning coordinator 180 instructing employees to close a series of 

items raised in prior audits: ‘‘All items in red must be closed this week without fail, 

as the time period for the same has already expired.’’ 181 The day before the safety 

director from the U.S. arrived, the facility conducted its own audit, which detected 

several quality concerns, including scales with disconnected cables, energetic material on the floor, and dispensers for energetic material on unidentified lines.182

These items were highlighted in an e-mail to Monclova employees prior to the 

Takata global safety director’s audit.183

Despite this preparation, an audit report dated May 16–18, 2011, from the Takata 

safety director faulted the plant for not properly closing bags of ammonium nitrate 

and for storing scrapped or contaminated propellant near good material, allowing 

for the possibility of a mix-up.184 The audit report also explained that materials dating back to 2007 were found in the staging area, even though this area was intended for 24-hour storage of materials and not for long-term storage.185 In addition, the audit found several instances of propellant on the assembly line floor.186

Notwithstanding these findings, the safety director noted that the audit report 

would not be shared with Takata’s headquarters in Tokyo.187

The same U.S. safety director conducted a follow-up audit of the Monclova plant 

in November 2011.188 E-mails exchanged among employees of the plant in the leadup to his visit discussed plant audit questions that needed to be addressed before 

the auditor arrived, including the question of whether a central safety committee 

exists.189 A week before the director arrived, a superintendent of environmental 

health and safety 190 wrote that ‘‘NO safety committee, as such, has been 

formed.’’ 191 He continued, ‘‘It can be made up by the Inflators managers, and we 

can mention the weekly staff meeting as evidence of meetings.’’ 192 The inflator assembly quality manager193 replied, ‘‘This is how we are going to answer and what 

we are going to have as support for a safety audit? GPS [Global Pyrotechnic Safety]? 

We need compelling responses and evidence so that there is no doubt and they don’t 

start asking for this and that . . .’’ 194 The follow-up audit report, dated November 

10–11, 2011, identified 14 tasks intended to improve concerns identified in the 

audit. For example, the audit report noted that, in the assembly area, various metal 

parts were found in an area open to the elements and that improvement was needed 

to separate and protect the parts from weather.195

Furthermore, a document from 2013 shows that Takata’s Monclova plant was not 

properly following the procedures that govern how changes are made to some aspects of the manufacturing process.196 Changes in the inflator assembly lines were 

implemented without receiving the prior approval of directors of quality, engineering, and safety, despite policies that required their approval.197 The document outVerDate Nov 24 2008 08:11 May 04, 2016 Jkt 075679 PO 00000 Frm 00023 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\99955.TXT JACKIE
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198Takata Response to Senate Commerce Committee (Feb. 3, 2015) (TKH–SCS&T00044269– 

44270). 199 Airbag Compound has Vexed Takata for Years, New York Times (Dec. 9, 2014). 200 Id. 201See Takata Response to Senate Commerce Committee (Feb. 3, 2015) (TKH– 

SCS&T00045446). 202Takata Response to Senate Commerce Committee (Feb. 3, 2015) (TKH–SCS&T00045419– 

45443). 203Takata Response to Senate Commerce Committee (Feb. 3, 2015) (TKH–SCS&T00045446). 204Takata Response to Senate Commerce Committee (Feb. 3, 2015) (TKH–SCS&T00045456). 205Takata Response to Senate Commerce Committee (Feb. 3, 2015) (TKH–SCS&T00008072– 

TKH–SCS&T00008095). In 2001, Takata changed the humidity specification from 30 percent to 

42 percent. Takata Response to Senate Commerce Committee (Feb. 3, 2015) (TKH– 

SCS&T00008072). In 2004, Takata changed the humidity specification from 42 percent to 35 

percent. Takata Response to Senate Commerce Committee (Feb. 3, 2015) (TKH– 

SCS&T00008082). In 2010, Takata changed the humidity specification from 35 percent to 30 

percent. Takata Response to Senate Commerce Committee (Feb. 3, 2015) (TKH– 

SCS&T00008095). 206Takata Response to Senate Commerce Committee (Feb. 3, 2015) (TKH–SCS&T00008082). 207Takata Response to Senate Commerce Committee (Feb. 3, 2015) (TKH–SCS&T00008098). 208TK Holdings Inc., Defect Information Report PSDI, PSDI–4, and PSDI–4K, supra n. 12. 209Takata Air-Bag Problems Linked to Several Factors, Wall Street Journal (June 2, 2015). 210Takata Response to Senate Commerce Committee (Mar. 23, 2015) (TKH–SCS&T00064623). 

lined updates to internal safety policies that were intended to end the practice.198

Had Takata implemented more robust safety programs, including outside auditing 

and verification, it is possible that these serious production issues might have been 

addressed much earlier. 

IV. Media Reports and Takata’s Internal Documents Illustrate Takata’s 

Efforts to Address the Impact of Moisture and Humidity on its Inflators 

Takata has attempted to understand the precise roles of moisture and humidity 

in the stability of its ammonium nitrate-based propellant for more than a decade— 

and questions still remain today. As reported by the New York Times, Takata’s patent applications demonstrate Takata’s general knowledge of moisture’s effect on the 

stability of ammonium nitrate. For example, in an October 2006 patent application, 

Takata explained that moisture could seep into the propellant during the manufacturing process as well as once the inflator was installed in a car.199 Similar concerns 

were raised in another patent application in December 2013, with Takata engineers 

cautioning that temperature changes inside the airbag inflator might cause the propellant to ‘‘lose density especially in the presence of moisture or humidity.’’ 200

Documents provided to the Committee by Takata show that the company frequently made adjustments in order to control moisture in the propellant during the 

manufacturing process. For example, Takata changed the moisture specification, 

which is the amount of allowable moisture present in the propellant,201 for one 

version of its propellant tablets in 2010 and 2014. Based on an internal presentation 

outlining process changes for this propellant from 2000 through 2014, it appears 

that Takata did not change moisture specification from 2000 through 2009.202 In 

2010, however, Takata changed the moisture specification from a maximum of 0.20 

percent to a maximum of 0.12 percent.203 In 2014, at Honda’s request, Takata again 

changed the moisture specification—this time from 0.12 percent to 0.07 percent.204

Takata also made changes to control the humidity in the manufacturing environment. For example, according to an internal Takata presentation, the company 

changed the humidity specification at the propellant loading station for the driverside inflator on at least three occasions between 2001 through 2010.205 Takata described that the reason for one of the changes was ‘‘to minimize the effects of moisture absorption on propellant.’’ 206 In addition, in 2011, Takata began controlling the 

humidity in the entire plant by installing high capacity dehumidifiers, instead of 

controlling the humidity at each propellant loading station.207 These process 

changes illustrate Takata’s efforts to regulate moisture and humidity during the 

manufacturing process of its airbag inflators. 

Currently, Takata continues to attempt to understand the impact of exposure to 

moisture over the life of the inflator. Analysis by Fraunhofer ICT, a research institute with expertise in airbag and pyrotechnic technology that was hired by Takata 

to test various aspects of its inflators and propellants, suggests that long-term exposure to a climate of persistent high heat and humidity is a significant factor in explaining the airbag ruptures.208 Ongoing testing has identified an O-ring seal as the 

possible point at which water is entering the inflator.209

Significant questions still remain, however. For example, it is not known why the 

same inflator can perform differently depending on the make and model of the vehicle in which it was installed.210 In addition, even when an inflator is subjected to 

21 

211Takata Response to Senate Commerce Committee (Mar. 23, 2015) (TKH–SCS&T00064697). 212 House Committee on Energy and Commerce, Testimony of Kevin Kennedy, Executive Vice 

President of North America, TK Holdings Inc., Hearing on An Update on the Takata Airbag 

Ruptures and Recalls (June 2, 2015). 213 Briefing by NHTSA to Bipartisan Commerce Committee Staff (June 17, 2015); Briefing by 

Takata to Bipartisan Commerce Committee Staff (June 18, 2015). 214Pub. L. No. 106–414 (2000); Inside the Ford/Firestone Fight, Time (May 29, 2001). 215Pub. L. No. 112–141 (2012); National Highway Traffic Safety Administration, RQ10003 

Summary (Feb. 16, 2010-Mar. 1, 2011) (online at www-odi.nhtsa.dot.gov/cars/problems/defect/ 

results.cfm?actionlnumber=RQ10003&SearchType=QuickSearch&summary=true). 216See, e.g., NHTSA’s fines of Honda ($70 million for failing to both submit early warning reports and warranty claims); Hyundai Motor America ($17.35 million for failing to issue a recall 

in a timely manner); and General Motors Company ($35 million for failing to issue a recall in 

a timely manner). National Highway Traffic Safety Administration, NHTSA Issues More Fines 

in 2014 Than in Agency’s Entire History (Jan. 8, 2015) (online at www.nhtsa.gov/ 

About+NHTSA/Press+Releases/2015/DOT-fines-Honda-$70-million). 

all variables that, according to the testing, appear to play a role in causing a rupture event, some of these inflators nonetheless perform properly.211 These unanswered questions are particularly troubling in light of the fact that Takata continues 

to produce hundreds of thousands of replacement inflators each month, with plans 

to increase production to one million inflators per month by September 2015.212

Nonetheless, Takata and NHTSA agree that, due to the critical role of time in degrading the propellant, it is best to continue replacing the old, defective inflators 

as quickly as possible—even though there is a distinct possibility that some of these 

replacements will eventually also be recalled.213

V. Proposed Policy Changes to Quickly Detect and Address Future Auto 

Safety Defects 

Over the past 20 years, Congress has periodically scrutinized NHTSA’s vehicle 

safety authority in the wake of high-profile vehicle defects that led to the needless 

deaths of American drivers. Twice Congress has responded with legislative reform 

efforts with the Senate Commerce Committee playing a leading role. In 2000, Congress passed the Transportation Recall Enhancement, Accountability, and Documentation (TREAD) Act in response to the Firestone tire recall that caused at least 

174 deaths and over 700 injuries.214 Subsequently, in 2012, Congress again legislatively addressed NHTSA’s regulatory authority with provisions in the comprehensive surface transportation reauthorization legislation—the Moving Ahead for 

Progress in the 21st Century Act (MAP–21)—with many of those provisions stemming from the lessons learned from sudden unintended acceleration defects in Toyota vehicles.215

While these laws were significant and helpful, they stopped short of reforms that 

would have provided NHTSA with sufficient resources and authority to better detect 

and address dangerous vehicle safety defects. The holes in the current NHTSA regulatory and enforcement process, combined with the failure of certain manufacturers 

to maintain robust internal safety and quality control programs, have manifested 

in several large recalls—including those involving defective GM ignition switches 

and Takata airbags. 

To that end, this report recommends numerous policy proposals to better enable 

NHTSA to protect the public from vehicle defects. Many of these proposals have 

been part of previously introduced bills—some in bills favorably reported by the 

Committee and some even in Senate-passed legislation. In addition, some of these 

proposals have been proffered by the Administration in its Fiscal Year (FY) 2015 

budget, which provides a comprehensive transportation proposal known as the Generating Renewal, Opportunity, and Work with Accelerated Mobility, Efficiency, and 

Rebuilding of Infrastructure and Communities throughout America (GROW AMERICA) Act. Furthermore, NHTSA should adopt reforms on its own in order to address 

deficiencies within ODI. 

A. NHTSA Improvements 

1. Increase Civil Penalty Authority 

The Takata airbag recalls confirm the urgent need for stronger enforcement mechanisms for NHTSA, including civil penalty authority that can sufficiently deter safety violations. In 2014, NHTSA issued over $126 million in civil penalties, which surpassed the total amount collected by the agency in its 43-year history.216 Despite 

the record year, NHTSA’s civil penalty authority is currently capped at $35 milVerDate Nov 24 2008 08:11 May 04, 2016 Jkt 075679 PO 00000 Frm 00025 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\99955.TXT JACKIE
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217 49 U.S.C. § 30165. The $35 million maximum limit was increased from $15 million by 

MAP–21. See Pub. L. No. 112–141, § 31203 (2012). 218 49 U.S.C. § 30118 (2000). 219See General Motors Company, 2014 Annual Report, at 22 (2014) (online at www.gm.com/ 

content/dam/gmcom/COMPANY/Investors/StockholderlInformation/PDFs/ 

2014lGMlAnnuallReport.pdf). 220See Department of Justice, Justice Department Announces Criminal Charge Against Toyota Motor Corporation and Deferred Prosecution Agreement with $1.2 Billion Financial Penalty 

(Mar. 19, 2014) (online at www.justice.gov/opa/pr/justice-department-announces-criminalcharge 

-against-toyota-motor-corporation-and-deferred). 221S. 3302, 111th Cong. (2010). 222S. 1449, 112th Cong. (2011). 223S. 1813, 112th Cong. (2012). 224S. 2559, 113th Cong. (2014). 225 H.R. 4364, 113th Cong. (2014). 226Department of Transportation, Generating Renewal, Opportunity, and Work with Accelerated Mobility, Efficiency, and Rebuilding of Infrastructure and Communities throughout America Act § 4110 (2014). 227Department of Transportation, Office of Inspector General, Inadequate Data and Analysis 

Undermine NHTSA’s Efforts to Identify and Investigate Vehicle Safety Concerns (June 18, 2015). 228 Id. 229 Auto Regulator Has 51 People Tracing 250 Million Cars, Bloomberg (Mar. 26, 2015). 230See Department of Transportation, Budget Estimates Fiscal Year 2015, National Highway 

Traffic Safety Administration (2015) (online at www.business.cch.com/plsd/FY2016-NHTSACBJ-Final.pdf). 

lion,217 severely limiting its ability to seek fines that are commensurate with, for 

instance, the seriousness of failing to report defects in a timely manner. The low 

cap has repeatedly demonstrated an inability to deter automakers from committing 

grave safety violations. This lack of deterrence is particularly apparent when companies fail to report important defect information to NHTSA as required under Section 

30118 of the National Traffic and Motor Vehicle Safety Act (NTMVSA).218 For example, NHTSA’s ‘‘record’’ $35 million fine of GM represented a miniscule fraction 

of the company’s annual revenue of $156 billion.219 In contrast, it is worth noting— and it is telling—that when Toyota agreed to pay a record fine of $1.2 billion for 

concealing information on sudden unintended acceleration, the auto giant did so in 

a settlement with the Department of Justice for violations of the Wire Act—not for 

violations of Section 30118 of NTMVSA.220

Over the past several years, lawmakers have proposed increasing or eliminating 

this cap. A Senate bill introduced in the 111th Congress would have increased the 

cap to $300 million,221 and legislation reported out of the Commerce Committee in the 112th Congress would have increased the cap to $250 million.222 The Senatepassed version of MAP–21 adopted the Committee-reported increase of $250 million 

before it was reduced to the current $35 million in Conference with the House.223

In the 113th Congress, a bill introduced in the Senate would have eliminated the 

cap,224 and a bill introduced in the House would have increased the cap to $200 million.225 The GROW AMERICA Act also would increase the limit on NHTSA’s civil 

penalties to $300 million.226 Substantially increasing or eliminating NHTSA’s civil 

penalty cap is critical to making NHTSA a stronger and more effective regulator. 

2. Provide Enhanced and Independent Testing Capability 

Improving NHTSA’s ability to conduct enhanced and independent testing would 

also greatly further motor vehicle safety. While Takata and the automakers have 

the responsibility to identify the root cause of the airbag ruptures, their regulator 

should have the ability to conduct its own independent tests to verify their findings. 

Furthermore, according to a new report issued by the Department of Transportation 

Inspector General’s office (DOTIG), NHTSA’s ability to aggressively and prophylactically identify and address defects before they cause greater harm is hampered by 

deficiencies in how ODI operates.227 Specifically, the DOTIG report found that ODI 

lacks (1) protocols and procedures to collect data that is accurate and useful, (2) the 

ability to statistically analyze data in order to discern trends that indicate the existence of safety defects, and (3) protocols that govern the conditions for conducting 

investigations. The report made 17 recommendations that ODI should adopt to address these deficiencies.228 Furthermore, NHTSA is plagued by a chronic lack of resources. Currently, the agency is underfunded and outmanned—only 51 employees 

are responsible for analyzing an overwhelming amount of data and conducting appropriate investigations therefrom.229 The President’s FY 2016 budget request pro- poses an overall NHTSA budget of $908 million, a nine percent increase from the 

agency’s current budget of $830 million.230 This includes increasing ODI’s budget to $31.3 million, up from $11 million in FY 2015, which would allow for the hiring 

23 

231 Id. See also Department of Transportation, U.S. Transportation Secretary Anthony Foxx 

Unveils President’s Bold $94.7 Billion Investment in America’s Infrastructure Future (Feb. 2, 

2015) (online at www.dot.gov/briefing-room/us-transportation-secretary-anthony-foxx-unveilspresident%E2%80%99s-bold-947-billion). 232 Id.; National Highway Traffic Safety Administration, U.S. Transportation Secretary Foxx 

Calls on Congress to Authorize New Enforcement Tools for NHTSA and Levis Fine on Takata 

(Feb. 20, 2015) (online at www.nhtsa.gov/About+NHTSA/Press+Releases/2015/DOT-wantsnew-enforcement-tools-for-nhtsa-and-fines-takata). 233 National Highway Traffic Safety Administration, U.S. DOT Hosts Workshop to Boost Recall 

Completion Rates (Apr. 28, 2015) (online at www.nhtsa.gov/About+NHTSA/Press+Releases/ 

2015/nhtsa-retooling-recalls-workshop-04282015). 234Government Accountability Office, Auto Safety: NHTSA Has Option to Improve the Safety 

Defect Recall Process, at 25 (June 2011). 235The Unsolved Mystery of the Exploding Air Bags, USA Today (Apr. 27, 2015). 236DOT Aims to Follow Record Recall Fines with Record Repair Rate, Politico Pro (Apr. 28, 

2015). 237See, e.g., S. 3302, 111th Cong. (2010); S. 2559, 113th Cong. (2014); and S. 921, 113th Cong. 

(2012). 238 U.S. Transportation Secretary Foxx Calls on Congress to Authorize New Enforcement Tools 

for NHTSA and Levis Fine on Takata, supra n. 233. 239Department of Transportation, Generating Renewal, Opportunity, and Work with Accelerated Mobility, Efficiency, and Rebuilding of Infrastructure and Communities throughout America Act § 4109 (2014). Previous proposals have also required that used car dealers notify purchasers of any outstanding safety recalls. See S. 3302, 111th Cong. (2010) and S. 2559, 113th 

Cong. (2014). 240 U.S. Transportation Secretary Foxx Calls on Congress to Authorize New Enforcement Tools 

for NHTSA and Levis Fine on Takata, supra n. 233. 241S. 921, 113th Cong. (2014). On June 19, 2015, Honda confirmed that the 2001 Honda Civic 

involved in the eighth death caused by a rupturing Takata airbag inflator was a rental car. 

Statement from American Honda Motor Co., Inc., Re: Confirmed Fatality Related to the Rupture 

of a Takata Airbag Inflator in Los Angeles, CA on September 7, 2014, supra n. 132. 

of an additional 57 personnel.231 Coupled with meaningful internal reforms, the increased budget for ODI would enhance NHTSA’s ‘‘ability to monitor data, find defects sooner, and strengthen [its] ability to conduct investigations of vehicles with 

suspected defects.’’ 232

3. Improve Recall Completion Rates 

Recall notifications are only effective when consumers act on the notices by actually bringing their vehicles to an authorized dealership to have them repaired. However, achieving high recall completion rates has proven to be a challenge. Secretary 

of Transportation Anthony Foxx has stated, ‘‘Recalls are only successful and can 

only save lives if they end up getting the cars fixed, but we know that 20 percent 

of vehicles that are recalled—and possibly more than that—go unrepaired.’’ 233 A 

2011 Government Accountability Office study found significant variation in recall 

completion rates: in any given year, some manufacturers have completion rates as 

low as 23 percent, while others have completion rates as high as 96 percent.234 By 

the end of 2014, of the 17 million vehicles that had been recalled for defective 

Takata airbags, reports suggested that only around 2 million vehicles—a mere 11 

percent of those recalled—had been repaired.235 In April 2015, NHTSA hosted a 

workshop with industry, safety advocates, policy makers, and researchers on improving recall completion rates. At the workshop, NHTSA Administrator Mark 

Rosekind said, ‘‘Getting to 100 percent is going to be a real challenge, but it has 

to be our ambition. And until the day we hit that mark, we have to think of new 

ways to get there.’’ 236

Lawmakers in recent years have attempted to bolster recall effectiveness by introducing legislation that would prohibit used car dealers and rental car companies 

from selling, leasing, or renting out vehicles subject to an open recall.237 Under current law, no such prohibition exists, constituting a major loophole in ensuring the 

safety of cars on the Nation’s roads and highways.238 The GROW AMERICA Act 

also proposes closing this loophole.239 Secretary Foxx stated, ‘‘Every vehicle under 

an open safety recall should be repaired as soon as possible.. . .Requiring rental car 

agencies and used car dealers to fix defective vehicles before renting is a commonsense solution that would make our roads safer.’’ 240 In September 2014, the Senate 

Commerce Committee favorably reported S. 921, the Raechel and Jacqueline Houck 

Safe Rental Car Act, which would have closed this loophole for rental cars.241

Numerous other ideas have been proposed to improve recall completion rates, including requiring consumers to fix open recalls before they are able to register their 

24 

242See S. 617 (2015). 243See, e.g., Takata Saw and Hid Risk in Airbags in 2004, Former Workers Say, supra n. 1; 

Exclusive: U.S. Federal Safety Regulators Seek Takata Whistleblowers, Reuters (Jan. 29, 2015). 244 Exclusive: U.S. Federal Safety Regulators Seek Takata Whistleblowers, supra n. 244. 245Pub. L. No. 112–141 § 30171; 49 U.S.C. § 30171. 246S. 304. The Bill is cosponsored by Senators Heller, McCaskill, Klobuchar, Ayotte, Moran, 

and Blumenthal. On February 26, 2015 the Commerce Committee considered the bill and ordered to be reported favorably, modified by a substitute amendment. 247Testimony of Kevin Kennedy, Hearing on An Update on the Takata Airbag Ruptures and 

Recalls (June 2, 2015), supra n. 213. 248 Id. 249See, e.g., Takata Air Bag Recall Stalls in Wisconsin Over Lack of Parts, Journal Sentinel 

(Mar. 30, 2015). 250 49 U.S.C. § 30120. 251 49 C.F.R. 573.14(b). 

vehicles or renew their registrations.242 Another idea is for auto manufacturers to 

provide direct in-vehicle notification to owners or lessees of open recalls. 

4. Enact Whistleblower Legislation 

As noted earlier, the Takata airbag recalls—as well as other high-profile safety 

recalls—highlight the need for stronger incentives for companies to report safety defects to NHTSA as soon as they become aware of them. In addition to increasing 

civil penalties for violations of Section 30118 of NTMVSA, bolstering incentives and 

protections for whistleblowers would also increase the likelihood that NHTSA receives critical safety information in a timely manner. Revealing information on the 

various issues surrounding the Takata airbag defects has often come from former 

Takata employees who have spoken to media sources in the aftermath of the crisis— 

often on the condition of anonymity.243 NHTSA has also urged potential whistleblowers to contact the Administration.244

Currently, MAP–21 provides whistleblower protections for employees of manufacturers, part suppliers, and dealerships by protecting them from discrimination or retaliation for engaging in certain protected activities, including providing information 

relating to any motor vehicle defect, noncompliance, or any violation to the Secretary of Transportation or an employer.245

In January 2015, Commerce Committee Chairman John Thune and Ranking 

Member Bill Nelson introduced the Motor Vehicle Safety Whistleblower Act (S. 304), 

which would enhance the protections in MAP–21 by incentivizing employees and 

contractors to voluntarily provide information to NHTSA.246 Under the bill, the Secretary of Transportation is authorized to share with the whistleblower up to 30 percent of any fines exceeding $1 million that NHTSA recovers as a result of the information that is reported. To help improve automobile safety, S. 304 incentivizes 

whistleblowers to report violations and provides the necessary protections for such 

actions. On April 28, 2015, the Senate passed S. 304. 

B. Safety Measures NHTSA, Takata, and Auto Manufacturers Should Undertake to 

Improve Recall Effectiveness 

Short of additional legislation, NHTSA and private stakeholders can also do a better job of effectuating recalls. Specifically, NHTSA should consider using its existing 

authority to accelerate the availability of replacement parts to the public and should 

further modify its public database to make it more user friendly. Lastly, auto manufacturers should make loaner cars more readily available to consumers affected by 

lengthy recalls. 

1. Increase Ability to Effectively Respond to Safety Defects/Recalls 

The defective Takata airbag crisis highlights the need for improvements in the 

auto industry’s ability to effectively respond to recalls. As of June 2015, Takata explained that production of replacement inflators had increased from approximately 

350,000 to 700,000 per month.247 At this rate of production, it would take Takata 

more than three years to produce replacement inflators for all recalled vehicles. By 

September 2015, Takata plans to be manufacturing one million inflators per 

month,248 but the slow pace at which Takata initially produced replacements, which 

has led to reports of customers being told that parts are not available,249 underscores the need for better planning for recalls, especially large recalls. 

Section 30120 of NTMVSA grants NHTSA the authority to improve the efficacy 

of recalls by expanding the sources of replacement parts and/or the number of authorized repair facilities.250 Granted under the TREAD Act, NHTSA can use this 

authority if it determines that the ‘‘manufacturer’s remedy program is not likely to 

be capable of completion within a reasonable time.’’ 251 Thus far, NHTSA has opted 

25 

252Pub. L. No. 112–141 § 31301. 253 NHTSA Updates Recall Website After Cars.com Probe, Cars.com (Apr. 23, 2015). 254 National Highway Traffic Safety Administration, U.S. Department of Transportation 

Unveils New, Free, Online Search Tools for Recalls Using Vehicle Identification Number (Aug. 

20, 2014) (online at www.nhtsa.gov/About+NHTSA/Press+Releases/2014/New-free-onlinesearch-tool-for-recalls-using-VIN-released); see also Demand Crashes Air Bag Recall Web Site 

Safercar.gov, Washington Post (Oct. 21, 2014). In addition, Honda’s VIN search tool, which allows consumers to determine whether a car is subject to recall, was providing false information 

in the months after millions of vehicles were recalled. Owners whose cars were subject to multiple recalls were only informed of the most recent recalls, and earlier recalls were shown as 

completed. See Senate Committee on Commerce, Science, and Transportation, Examining 

Takata Airbag Defects and the Vehicle Recall Process, 113th Cong. (Nov. 20, 2014). 255See S. 2559, 113th Cong. (2014); H.R. 1181. 256Senator Bill Nelson Statement, Senate Committee on Commerce, Science, and Transportation, Examining Takata Airbag Defects and the Vehicle Recall Process, 113th Cong. (Nov. 20, 

2014). 257 New Honda Ads: Fix Your Airbags, AutoBlog (Mar. 14, 2015). 

not to use its 30120 authority to accelerate the availability of replacements for defective Takata airbags, but it should not hesitate to do so if such an initiative would 

further public safety. 

Furthermore, the lack of accurate information available to consumers raises serious concerns when it comes to industry and the government’s readiness. To promote 

transparency and accountability, MAP–21 mandated that recall information be 

available on the Internet. Consumers are now able to search by vehicle make and 

model or enter their Vehicle Identification Number (VIN) into NHTSA’s vehicle safety database at www.safercar.gov to see if their vehicle is subject to a recall.252 The 

Takata airbag recalls have demonstrated that this search tool needs to be strengthened. NHTSA’s VIN search tool wrongly informed some consumers that their vehicles had either already been repaired or were not subject to a recall.253 Moreover, 

in October 2014, the overwhelming demand for NHTSA’s website caused it to 

crash.254 Bills introduced in Congress to improve NHTSA’s vehicle safety database 

include measures aimed at: improving website organization and functionality; allowing for data to be searched, aggregated, and downloaded; and improving 

searchability of specific vehicles and issues through standardization of commonly 

used search terms.255 However, NHTSA is capable of taking these steps on its own 

accord. Even without a legislative directive, the agency should take the initiative 

to make its database more user friendly and effective for consumers. 

2. Offer Loaner/Rental Cars When Recalls Involve Serious Safety Issues 

At the November 2014 Commerce Committee hearing regarding the defective 

Takata airbags, Senator Nelson called on automakers to provide loaner vehicles or 

rental cars to consumers who could not get their vehicles immediately fixed due to 

the unavailability of replacement parts.256 In March 2015, Honda launched a multimillion-dollar ad campaign to urge owners of vehicles affected by the Takata airbag 

recalls to get their vehicles fixed.257 The advertisements, printed in English and 

Spanish, promised consumers a rental car or loaner vehicle free-of-charge. To keep 

drivers and passengers safe when vehicles are subject to a recall, automakers should 

provide rental or loaner vehicles, especially in cases in which the defect in question 

poses a serious safety hazard or in which replacement parts are unavailable. 

VI. Conclusion 

Thus far, the Committee minority staff’s ongoing investigation reveals a series of 

failures by both Takata and NHTSA to timely address a defect that has now mushroomed into a recall crisis. Had Takata maintained a more robust culture of safety, 

it is likely that many of these defects could have been discovered much sooner. Similarly, had NHTSA promptly undertaken more aggressive steps to investigate the 

Takata airbag ruptures, it is possible that this defect could have been addressed 

years earlier. 

To restore consumer confidence in the safety of vehicles, it is imperative that Congress take action to enhance NHTSA’s regulatory and enforcement authorities. 

Similarly, automakers and part suppliers must redouble their internal safety efforts. 

As this report shows, it is not enough to merely conduct safety audits after problems 

are detected. Rather, safety must be built-in as a core component of a manufacturer’s internal culture. 

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Senator NELSON. And thank you for your cooperation on this. 

And you will recall, Mr. Chairman, last year we actually the 

started the hearings on these airbag defects. And the news was not 

good. At that point, last November, we had five deaths and dozens 

of injuries that were ties to the defective Takata airbags. 

And we had testimony from an Air Force lieutenant, Lieutenant 

Stephanie Erdman. She suffered severe facial injuries and almost 

lost one of her eyes when her airbag exploded after a relatively 

minor accident in the Florida panhandle near Eglin Air Force Base. 

But since then, the recalls have ramped up, appropriately, but 

unfortunately the tragedies have continued. January, this year, 

Houston, a man killed by a Takata airbag that exploded in his vehicle after a minor accident. And then April, a 22-year-old was involved in an accident, Lafayette, Louisiana. The wreck was serious, 

but, as you can see—look at this airbag. 

And do we have the pictures of the lady? 

That is the one from Florida, isn’t it? OK. Hold that back. Hold 

that one back. 

You can see—now, this is a normal airbag deployed. This is the 

front of what would be facing the driver in the steering wheel. And, 

of course, it deploys. And if it deploys normally, it is supposed to 

look like that. OK? 

This is what happened in this case that I just referenced in Louisiana. That is blood. But look at the tear in the airbag. You can 

see that it obviously has been punctured. And instead of it being 

like that, the shrapnel in the inflator—which is this device which 

is in the steering wheel, underneath the steering wheel, and this 

explodes, sending hot gas out and inflating the airbag. Well, when 

it is defective, it explodes with such force that it actually breaks 

open the metal, and the metal goes out. And then, of course, instead of the airbag saving lives, it is killing people. 

Let me show you. That is a piece of metal that actually came out 

on this lady, and this lady is in Miami last July. Look how big that 

is. Now, that hit her, and thank goodness it hit her there in a relatively superficial wound that is a permanent scar. But what if it 

had hit her there? Or what if it had hit her there? That is the piece 

that hit her. 

This is deadly serious business. Just last Friday, we learned of 

the eighth death, southern California, conclusively tied to a defective Takata airbag. And some of these victims’ families got recall 

notices—got recall notices after their loved ones were killed. And 

in addition to the eight deaths, this committee has learned of allegations of well over 100 serious injuries. 

Now, I got into this thing because there was a woman killed in 

Orlando. This was a year ago. That is how I got into it. When the 

police got to the car, they thought it was a homicide. They thought 

somebody had slashed her throat. And only afterwards did they 

find out that, in fact, this is what it was. 

And then I got into it because of a firefighter that lives in the 

Orlando area. He won’t be a firefighter again because he lost his 

eye now. 

And so I could go on and on about these incidents just in Florida 

alone, but the bottom line is we need to get these cars fixed. And 

we have been talking about this since last year. 

42 

Dr. Rosekind has been a breath of fresh air, and you have taken 

numerous actions to speed up the Takata recall process, but 

NHTSA still faces deep challenges. 

For one thing, as no doubt you will point out, it is underfunded. 

It lacks the necessary funding to make sure that automakers—and 

the sticks, as well as the carrots, it lacks to get the automakers to 

be forthcoming about the recalls. 

And, by the way, this isn’t the only thing. We are not just picking on Takata. Look how many deaths occurred from the GM defective steering ignition switches. GM hid a defect for over a decade, 

and at least 114 people died. This is awful. And for that, NHTSA 

could only fine GM a measly $35 million, and that is less than onehundredth of a percent of what GM makes in a quarter. 

And NHTSA also appears to have serious internal and managerial issues. These challenges were detailed in this Department of 

Transportation Office of Inspector General report released yesterday that revealed serious problems in NHTSA’s Office of Defects 

Investigation, especially related to the handling of the GM crisis 

last year. 

And so I can tell you, this Senator is going to fight for additional 

funding for NHTSA, but there also has to be accountability. And 

the IG report found severe deficiencies in NHTSA’s ability to effectively collect and analyze safety data as well as conduct investigations. The agency lacks proper protocols and procedures. And staff, 

apparently, are inadequately trained to do their job. We need accountability. 

And I look forward, Doctor, to hearing how you intend to respond 

to this report that has now been put in the record and how you 

continue to modernize the agency. 

And, finally, I look forward to hearing from the representatives 

of Takata. 

Yesterday, the staff issued a report detailing its initial findings 

in a months-long investigation of Takata. And for years, it is obvious that Takata did not put safety first. It appears that Takata 

knew, or should have known, as early as 2001—that is 14 years 

ago—that there were serious safety and quality lapses in its airbag 

production process. 

And you would think that they would have stepped up their safety efforts at these plants after discovering these issues. No. And, 

by the way, there are eight people dead. Instead, internal e-mails 

suggest they actually suspended global safety audits from 2009 to 

2011 for cost-cutting reasons. 

And now the same company responsible for this disaster is the 

one making nearly all of the replacement airbags for most of the 

recalled vehicles. That doesn’t sit well with a lot of Americans. And 

I think Takata has some serious explaining to do. 

So for everyone involved—NHTSA, to automakers, to the suppliers—we need to improve as fast as possible. And we need to get 

the recall completed but also make sure that the safety issues are 

spotted sooner so that dangerous vehicles are identified and fixed 

faster in order to do what we are supposed to do, which is help 

keep consumers safe. 

Mr. Chairman, if I sound that I am invested in this issue—when 

I saw the pictures of that woman in Orlando with her neck lacVerDate Nov 24 2008 08:11 May 04, 2016 Jkt 075679 PO 00000 Frm 00046 Fmt 6633 Sfmt 6601 S:\GPO\DOCS\99955.TXT JACKIE
43 

erated, I am invested. When I talked to that firefighter, with his 

little boy with him, that will never be a firefighter again because 

he doesn’t have an eye, I am invested. 

So thank you for calling this hearing. 

The CHAIRMAN. Thank you, Senator Nelson. 

We will now proceed to our panel and start with Administrator 

Rosekind. 

Please proceed. Thanks. 

STATEMENT OF HON. MARK R. ROSEKIND, PH.D., 

ADMINISTRATOR, NATIONAL HIGHWAY TRAFFIC SAFETY 

ADMINISTRATION, U.S. DEPARTMENT OF TRANSPORTATION 

Mr. ROSEKIND. Chairman Thune, Ranking Member Nelson, and 

members of the Committee, thank you for the opportunity to provide an update on NHTSA’s efforts to address vehicle safety defects, including defective Takata airbags. 

The recall of defective Takata airbags may represent the largest 

national consumer safety recall in history, and it is certainly one 

of the most complicated. 

All of NHTSA’s actions are targeted at achieving one goal, the 

only acceptable goal: a safe airbag in every American vehicle. 

On May 19, Secretary Foxx and NHTSA took a significant step 

toward this goal and announced that Takata, at the agency’s insistence, had filed four defect reports, launching national recalls of an 

estimated 33.8 million defective airbag inflators. 

The 11 affected auto manufacturers have now made available individual Vehicle Identification Numbers so that vehicle owners can 

go to safercar.gov and use NHTSA’s VIN lookup tool to determine 

if their vehicle is under recall. 

Affected consumers should contact their dealers to arrange a replacement airbag as soon as possible. Consumers may also request 

a free loaner or rental vehicle from the dealer while they wait for 

a replacement airbag. 

After reviewing automaker filings, our current estimate is that 

there are about 34 million defective airbags in 32 million affected 

vehicles. 

NHTSA has issued a consent order to Takata that, among other 

things, gives NHTSA the ability to ensure the adequacy of the remedy. For the first time ever, NHTSA is using authority provided by 

the TREAD Act and other authorities for a coordinated remedy program to prioritize and organize recall and remedy efforts. 

Late last week, NHTSA sent information requests to all of the 

affected automakers, Takata, and other potential suppliers of replacement parts, seeking information as part of our coordinated 

remedy program. 

In addition, we have had initial discussions with the affected 

companies on a protective order that would allow these companies 

to share confidential business information with NHTSA and one 

another so that confidentiality concerns do not interfere with our 

safety efforts. 

In a separate action, NHTSA is in the process of determining 

whether Fiat Chrysler Automobiles is in violation of the Safety 

Act’s requirements to remedy safety defects adequately and within 

44 

a reasonable time. NHTSA has scheduled a July 2nd hearing to examine 22 recalls that affect more than 11 million vehicles. 

At NHTSA, we are determined to use every tool available to protect the traveling public, and one critical tool is self-evaluation. At 

the urging of Secretary Foxx, with the full support of NHTSA’s 

staff and leadership, and before I arrived, NHTSA was involved in 

tough self-examination after one of the most challenging years in 

the agency’s history. 

On June 5, NHTSA released two reports that are essential in our 

efforts to improve our own effectiveness. The first report, ‘‘NHTSA’s 

Path Forward,’’ provides the results of a year-long due diligence review of our defect investigation process. Our review found weaknesses in processes for identifying and addressing defects. We are 

addressing those weaknesses with improvements already underway 

and within existing resources. 

The second report is a workforce assessment that details how the 

President’s Fiscal Year 2016 budget request specifically requests 

NHTSA’s mission needs. In addition, the report examines NHTSA’s 

workforce, given the 265 million vehicles we monitor, compared to 

the safety investigation workforces in other modes of transportation. It provides one possible path toward matching NHTSA’s 

workforce to those challenges. 

At Secretary Foxx’s request, the Department of Transportation’s 

Inspector General performed an audit of NHTSA’s investigation of 

the GM ignition switch defect. NHTSA thanks Inspector General 

Scovel and his staff for their diligence. Their report is a helpful 

contribution to our efforts, and we have concurred with all 17 of 

the report’s recommendations. 

To give you a sense of NHTSA’s commitment to improving efforts 

to identify and address safety defects, to date we have implemented 

or initiated 44 separate changes to improve our effectiveness. That 

includes efforts to address 10 of the 17 recommendations from the 

IG’s audit that were underway before the audit’s release. 

Two factors outside the scope of the IG’s audit are essential to 

NHTSA achieving its mission. The first is GM’s concealment of critical safety information from NHTSA. If I could sum up our process 

improvements in a single phrase, it would be, ‘‘Question assumptions.’’ Question the information NHTSA gets from industry, and 

question our own assumptions. 

The second factor also outside the scope of the Inspector General’s audit is available resources. The same 51 people managing 

the Takata recall include 8 that analyze 80,000 consumer complaints; 8 others oversee more than 1,200 recall campaigns now underway; and 16 others continue to investigate scores of potential 

defects. 

The agency must accomplish this task with a defects investigation budget that, when adjusted for inflation, is 23 percent lower 

than 10 years ago. The President’s Fiscal Year 2016 budget request 

would provide the people and technology needed to keep Americans 

safe. 

Secretary Foxx has proposed the GROW AMERICA Act, which 

would provide stable increased funding and important safety authorities to help NHTSA in our mission. It is clear that gaps in 

available personnel and authority represent known safety risks. 

45 

The members of this committee and your colleagues in Congress 

can help NHTSA address those risks and keep the traveling public 

safe. 

Thank you for this opportunity to testify, and I look forward to 

your questions. 

[The prepared statement of Mr. Rosekind follows:] 

PREPARED STATEMENT OF MARK R. ROSEKIND, PH.D., ADMINISTRATOR, NATIONAL

HIGHWAY TRAFFIC SAFETY ADMINISTRATION, U.S. DEPARTMENT OF TRANSPORTATION

Chairman Thune, Ranking Member Nelson, and members of the Committee, 

thank you for the opportunity to provide an update on NHTSA’s efforts to address 

vehicle safety defects, including defective Takata air bags. 

Let me first address Takata. The recall of defective Takata air bags may represent the largest national consumer recall in history. It is certainly one of the most 

complicated. 

You and the American people should know: Air bags save lives. Frontal air bags 

saved 2,388 lives in 2013 alone and 39, 886 lives since 1987. We need to make sure 

that people trust their air bags. All of our actions are targeted at achieving our goal, 

the only acceptable goal: a safe air bag in every American vehicle. 

On May 19, Secretary Foxx and NHTSA took a significant step toward ensuring 

that air bags in all vehicles are safe. As part of NHTSA’s ongoing investigation, 

NHTSA announced that Takata, at the agency’s insistence, had filed four Defect Information Reports (DIR) covering an estimated 33.8 million defective air bag inflators. This action launched national recalls for all of the named air bag inflators and 

significantly expanded the universe of vehicles with Takata air bag inflators that 

were subject to recall. 

The 11 affected auto manufacturers have scoured their records and state registrations to determine exactly which vehicles are affected, and have provided NHTSA 

with specific make and model information. As they have provided that information, 

NHTSA has posted updates on a special website within safercar.gov, informing consumers about make and model information. We strongly encourage vehicle owners 

to check their VIN numbers on Safercar.gov to see if their vehicle is included in the 

expansion. In fact, this is a good practice for all vehicle owners to engage in regularly, at least weekly. 

Automakers are legally responsible for informing consumers, via a mailed notice, 

that their vehicle is subject to a recall. In addition, under the Consent Order announced on May 19 Takata must, within 60 days, provide NHTSA with plans for 

how it, alone and in concert with automakers, will use traditional media, new media 

and individual contacts to inform consumers and boost completion rates. 

On May 19 and 20, after the Department of Transportation/NHTSA announcement, more than 1.5 million people conducted VIN lookup searches on Safercar.gov, 

including nearly 1 million on May 20 alone. At one point, Safercar.gov was the most 

visited website in the Federal Government. 

Understandably, consumers will want to know what this expanded recall means 

for them and what actions they should take. If a vehicle has an open recall, consumers should call their dealer to arrange for a replacement air bag as soon as one 

is available. Because of the size and scope of the recall, a replacement may not be 

immediately available. In order to mitigate and control the risk, and to organize and 

prioritize the availability of replacement air bags, NHTSA is taking steps to coordinate the remedy process among Takata, the auto manufacturers, and other air bag 

suppliers—something NHTSA has never done before in its history. 

In the meantime, consumers whose air bags are under recall may continue to 

drive their vehicles and should stay in contact with their dealers in order to replace 

their air bag as soon as replacements are available. Consumers may also check with 

the dealer for a free loaner or rental vehicle, as offered by some auto manufacturers, 

while they wait for a replacement air bag. 

The four defective air bag inflator models and affected automakers included in 

these recalls are as follows: 

Expanded Recalls 

The first DIR Takata filed declares a defect in all PSDI, PSDI–4, and PSDI–4K 

model driver inflators. Five automakers are affected (Honda, BMW, Chrysler, Ford, 

and Mazda). Takata estimates that this recall covers 17.6 million inflators, 9.7 million of which are already subject to prior recalls and safety campaigns. 

46 

The second DIR declares a defect in all SPI model passenger inflators made between 2000 and 2008. Eight automakers are affected (Chrysler, Ford, GM, Daimler 

Trucks, Mitsubishi, Nissan, Subaru, and Toyota). Takata estimates the recall covers 

7.7 million inflators, 2.8 million of which are already under recall. 

The third DIR covers PSPI–L model passenger inflators in cars manufactured by 

Honda and Toyota. Model years vary by automaker. GM is also affected because it 

sold the Toyota-made Pontiac Vibe. Takata estimates 5.2 million inflators are covered, 1.1 million of which are already under recall. 

The fourth DIR covers PSPI model passenger inflators in certain Honda models. 

Takata estimates this covers 3.3 million inflators, 2.1 million of which are already 

subject to prior recall. 

As you know, it is the responsibility of individual automakers to remedy defective 

components. Takata’s filing of Defect Information Reports has led to subsequent 

DIR filings by each of the affected automakers. After receiving those filings, reviewing them and asking for clarifications from the automakers, our current estimate 

is that there are about 32 million defective inflators on American roads that must 

be replaced. 

It is important to note that this number is an estimate, and will be refined as 

automakers gather additional information. We know that there are almost certainly 

vehicles that are counted twice, because they are equipped with two inflators—driver and passenger-side—that must be replaced. In addition, we know that some inflators will have to be replaced more than once. We do not yet know how many vehicles are in that category because Takata and automakers have not yet provided us 

in all cases with information to establish that they have identified a remedy that 

is safe for the lifetime of the vehicle—information NHTSA is seeking as part of our 

coordinated remedy process. We have asked all the affected automakers to provide 

us with a comprehensive list of makes, models and model years affected by the 

Takata recalls, and have provided that list to the public through the Takata 

microsite on safercar.gov. 

Coordinated Remedy 

To deal with the extraordinary complexity of the Takata recall, NHTSA is using 

all of the tools at its disposal to prioritize and organize these national recalls, and 

to ensure the adequacy of the remedy. In addition to the defect notifications, 

NHTSA has issued a Consent Order to Takata. This Consent Order, among other 

things, gives NHTSA oversight into the company’s testing, requires the company’s 

full cooperation with NHTSA’s investigation, and, importantly, gives NHTSA the 

ability to ensure the adequacy of the remedy so that there will be a safe air bag 

in every vehicle. 

Additionally, NHTSA has begun its own testing for oversight and to verify if the 

remedy is effective. 

Fifteen years ago, Congress provided authority in the TREAD Act that gives 

NHTSA the ability to address the challenges and circumstances now faced in this 

recall. For the first time ever, NHTSA is using this authority, in conjunction with 

other authority under the Safety Act, to open a coordinated remedy proceeding to 

prioritize and organize vehicle manufacturers’ recall and remedy programs related 

to the defective Takata air bag inflators. 

On Friday, May 22, 2015, the Federal Register published NHTSA’s notice of intent to open this proceeding. A supplementary notice published on June 5 opened 

a docket for public comment on a variety of issues related to the replacement of the 

air bag inflators. NHTSA will obtain relevant information from any and all sources 

regarding the availability and implementation of remedy parts and programs in a 

process that will be public and transparent. NHTSA also plans to hold a series of 

meetings to collect additional information from Takata, auto manufacturers, and air 

bag suppliers. 

It is NHTSA’s expectation that this process will provide the necessary data on 

which to develop a plan to prioritize and organize replacement inflators. 

Root Cause 

By now, everyone had hoped to have a more clear understanding of the root cause 

of these air bag inflator failures. There are several factors that, based on incidents 

in the field and from lab test data, are known to lead to an increased risk of an 

inflator rupture. 

Prolonged exposure to persistent levels of high absolute humidity outside the inflator, combined with the effects of thermal cycling, may lead to moisture intrusion 

in some inflators over time. As a result of moisture intrusion, the propellant wafers 

in some of the subject inflators may experience an alteration over time, which could 

lead to over-aggressive combustion in the event of an air bag deployment. 

47 

Takata is also aware of a potential issue with internal tape seal leaks in some 

inflators that could also be a source of moisture intrusion. Takata’s test results and 

investigation indicate that the potential for rupturing may also depend on other factors, including vehicle design factors and manufacturing variability. 

So while NHTSA’s analysis of the data shows that prolonged exposure to hot, 

humid climates is associated with greater risk, the full story is not yet known and 

a definitive root cause has not been identified. In my recent experience as a Member 

of the National Transportation Safety Board, I know there may not be a single root 

cause, and we may in fact never know the root cause. But Boeing did not wait to 

find a remedy for the lithium battery in its 787 Dreamliner despite not knowing the 

root cause of the fire and smoke incidents that grounded the fleet. NHTSA must 

act to protect the driving public and ensure their air bags are safe. That is why 

NHTSA is taking aggressive action to keep people safe on the road now, rather than 

waiting, perhaps indefinitely, to determine the root cause. 

Fiat Chrysler recall issues 

In addition to our efforts regarding Takata, NHTSA is in the process of determining whether Fiat Chrysler Automobiles is in violation of the Safety Act’s requirements to remedy safety defects adequately and within a reasonable time. NHTSA 

has scheduled a July 2 hearing as part of that process. That hearing will examine 

22 recalls that affect more than 10 million vehicles, and will evaluate the timeliness 

and effectiveness of remedies and the adequacy of the company’s consumer notifications. 

In each of those 22 recalls, NHTSA has significant concerns about Fiat Chrysler’s 

performance. On June 18, NHTSA published a notice in the Federal Register that 

outlines those concerns. They include slow repairs on vehicles responsible for loss 

of control and fatal fires; remedy repairs that failed to prevent dangerous roof liner 

fires; and failure in at least eight cases to notify owners of recalls in a timely fashion, including recalls of Takata air bags for which Fiat Chrysler to date still has 

not provided notification to owners. The company also has on several occasions provided NHTSA with inaccurate or incomplete information on defects and communications with owners and dealers. 

Based on information gathered from the public and from Fiat Chrysler, NHTSA 

will make a final determination as to whether Fiat Chrysler has failed to meet its 

obligations under the Safety Act, and take any actions that are appropriate based 

on that determination. 

Internal reviews and the Inspector General’s audit 

At NHTSA, as I have said repeatedly, we are determined to use every tool available to protect the traveling public. And one critical tool is self-evaluation. While 

we are focused on holding the entities we regulate accountable, we have also looked 

for every way we can find to improve our own performance. 

That is not something new. Before I arrived, at the urging of Secretary Foxx and 

with the full support of NHTSA’s staff and leadership, NHTSA was involved in 

tough self-examination after one of the most challenging years in the agency’s history. NHTSA’s approach to Takata, Fiat Chrysler and the scores of other defect-related issues we deal with every day has been informed by the lessons learned in 

that process. 

On June 5, NHTSA released two reports that are essential elements in our efforts 

to improve our performance. In addition, we announced two initiatives—one involving some of the top safety experts in the country, the other tapping NHTSA’s internal strengths—to help us turn the lessons of our self-scrutiny into concrete safety 

gains. 

The first internal report, ‘‘NHTSA’s Path Forward,’’ provides the results of a yearlong due diligence review of our defect investigation process in the wake of the GM 

ignition switch investigation. Our review found weaknesses in our process for identifying and addressing defects, and we are making changes to address those weaknesses. The report addresses six major process improvements to do a better job of 

holding the industry and ourselves accountable. With small exceptions, all of these 

improvements are under way and we intend to make them within existing resources. Whatever resources are provided to our agency, we are committed to doing 

better with what we have. 

The second report is a workforce assessment that stems from a 2011 recommendation by the Department of Transportation’s Inspector General in the wake of the 

Toyota unintended acceleration case. At the heart of that recommendation was the 

question of whether NHTSA had enough staff with sufficient expertise to assess defects in an increasingly complex U.S. vehicle fleet. As we have said since its release, 

the President’s 2016 budget request for NHTSA reflects the lessons of the GM invesVerDate Nov 24 2008 08:11 May 04, 2016 Jkt 075679 PO 00000 Frm 00051 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\99955.TXT JACKIE
48 

tigation, and this workforce assessment provides significant detail on how the FY16 

budget request would help us complete our mission. But in addition, the report examines NHTSA’s defects investigation workforce in light of the size of the fleet we 

monitor, the scope of the safety risk to the American public, and in light of safety 

investigation workforces in other modes of transportation, and provides one possible 

path, in what would be a several-year process, toward matching NHTSA’s workforce 

to those challenges. 

When we released our internal reports, we made two additional announcements 

on initiatives that will help us improve our performance. 

The first is the creation of an outside Systems Safety Team to help us implement 

our enhanced systems safety approach. In Drs. Joe Kolly, Vic Lebacqz and Jim 

Bagian, we have three of the most respected safety professionals in the world to 

help us implement our improvements. 

Complementing this external team is an internal effort designed to tackle our 

toughest safety challenges. That effort will use multi-disciplinary teams from across 

NHTSA to address safety risks or problems that cut across our various lines of 

work. 

In addition to our own efforts, the Department of Transportation’s Inspector General has, at Secretary Foxx’s request, performed an audit of NHTSA’s investigation 

of the GM ignition switch defect. Let me take this opportunity to thank Inspector 

General Scovel and his staff for their diligence. We believe the report is a helpful 

contribution to our efforts to better identify and address safety defects, and we have 

concurred with all 17 of the report’s recommendations. In fact, many of the Inspector General’s findings reinforce the findings of our internal examinations. We will 

aggressively implement the Inspector General’s recommendations, and anticipate 

implementation of all 17 recommendations within one year, with the understanding 

that at least two recommendations may require rulemaking, which could extend 

that timeline. 

Two factors outside the scope of the Inspector General’s audit are essential to 

achieving NHTSA’s mission. The first is a hard lesson from the GM experience, in 

which, as GM has acknowledged, the company concealed critical safety information 

from NHTSA that would have radically changed the agency’s understanding of its 

ignition switch affected air bag deployment. While GM’s deception was not within 

the scope of the Inspector General’s audit, NHTSA cannot ignore the fact that manufacturers may seek to intentionally deceive us. If I could sum up our process improvements in a single phrase, it would be: question assumptions. Question the information we get from industry, and question our own assumptions. 

The second factor, also outside the scope of the Inspector General’s audit, is available resources. Fixing problems such as the Takata recalls and Fiat Chrysler’s recall 

performance is a monumental task. Yet the agency must manage this enormous and 

necessary task with its existing people, technology, and authorities. NHTSA must 

accomplish this task with a defects investigation budget of $10.6 million, a figure 

that, when adjusted for inflation, is actually 23 percent lower than its budget 10 

years ago. 

We need your support to help us protect the safety of the American traveling public. The President has submitted a budget request that would fund significant improvements in NHTSA’s defect investigation efforts, providing the people and technology needed to keep Americans safe. Secretary Foxx has proposed the GROW 

AMERICA Act, which would provide stable, increased funding for our agency and 

important safety authorities to help us in our mission, such as raising the maximum 

civil penalty to $300 million. 

At NHTSA, we address safety risks every day. In my judgment as a safety professional, gaps in our available personnel, technology and authority are a known risk. 

I urge the members of the Committee and your colleagues in Congress to help us 

address that risk and keep the traveling public safe on America’s roadways. Thank 

you for this opportunity to testify and I look forward to your questions. 

The CHAIRMAN. Thank you, Administrator Rosekind. 

Mr. Scovel? 

STATEMENT OF HON. CALVIN L. SCOVEL III, INSPECTOR 

GENERAL, U.S. DEPARTMENT OF TRANSPORTATION 

Mr. SCOVEL. Chairman Thune, Ranking Member Nelson, members of the Committee, thank you for inviting me to discuss 

NHTSA’s vehicle safety oversight. 

49 

As you know, strong oversight is critical for taking timely action 

against vehicle defects, such as GM’s faulty ignition switch. As of 

this month, this defect has been linked to more than 110 fatalities 

and 220 injuries. 

Airbag nondeployments prompted NHTSA’s Office of Defects Investigation to look at certain GM vehicles as early as 2007, but 

ODI ultimately determined an investigation was not warranted. 

We now know that the faulty ignition switch can unexpectedly disable the vehicle’s power steering, power brakes, and airbags. 

Today, I will discuss the weaknesses we identified relating to 

ODI’s procedures for collecting and analyzing vehicle safety data 

and for determining which issues warrant further investigation. I 

will also show how the weaknesses we identified affected ODI’s 

handling of the GM ignition switch defect. 

We identified three areas of weakness in NHTSA’s vehicle safety 

procedures that undermine its efforts to identify and investigate 

vehicle safety concerns. 

First, ODI lacks the procedures needed to collect complete and 

accurate vehicle safety data. The use of ODI’s early warning aggregate data is limited due to the inconsistencies in how manufacturers categorize safety incidents. ODI guidance specifies 24 categories 

for reporting potential defects related to an average of over 15,000 

vehicle components, leaving manufacturers to use broad discretion 

when reporting these data. 

Consumer complaints, ODI’s primary source for identifying safety concerns, similarly lack information to correctly identify the vehicle systems involved, due in large part to the lack of guidance to 

consumers. Further, ODI does not adequately verify manufacturers’ 

data or take timely action to enforce manufacturers’ compliance 

with reporting requirements. 

Second, ODI does not follow standard statistical practices in analyzing early warning reporting data. Consequently, it cannot identify statistically significant trends or outliers that may indicate a 

safety issue should be pursued. 

In addition, despite the volume of consumer complaints, which 

averaged roughly 330 a day in 2014, ODI relies on one initial 

screener in the first phase of its two-tiered screening process. This 

process leaves the office vulnerable to a single point of failure, and 

it runs the risk that complaints with potential safety significance 

may not be selected for further review. Inadequate training and supervision of screeners further increase this risk. 

Third, ODI emphasizes investigating issues that are most likely 

to result in recalls, which has blurred the line between pre-investigative and investigative duties. Investigative duties, such as research and engineering analysis work, are being performed during 

the pre-investigative phase, often by screeners who are not trained 

to carry out these responsibilities. 

In addition, stakeholders within ODI have not reached consensus 

on the amount and type of information needed to open investigations. And ODI does not always document the justifications for its 

decisions not to investigate potential safety issues. This lack of 

transparency and accountability in ODI’s investigation decisions 

further undermines NHTSA’s efforts to identify needed recalls and 

other corrective actions. 

50 

These three procedural weaknesses impeded ODI’s handling of 

the GM ignition switch defect. From 2003 through 2013, GM submitted over 15,000 non-dealer field reports and about 2,000 death 

and injury reports on vehicles that would ultimately be subject to 

the ignition switch recall. 

However, inconsistently miscategorized reports may have masked 

potential safety defect trends. For example, GM did not assign a 

component code to a death and injury report—not airbags, not electrical, not ignition—even though a state trooper’s report indicated 

that the ignition switch was involved in the accident and a possible 

cause of airbag nondeployment. 

In addition, at least 12 GM non-dealer field reports categorized 

by GM under ‘‘airbags’’ and that may have been related to the ignition switch defect were not reviewed before the recall because 

NHTSA’s analytical tools could not read the report format used by 

GM, a fact ODI staff did not note until after the recall. 

ODI staff also missed opportunities to connect the GM ignition 

switch defect to airbag nondeployments. For example, ODI employees overlooked documentation on a fatal accident involving a 2005 

Cobalt that linked the ignition switch defect to the vehicle’s airbag 

nondeployment, including a state trooper’s accident investigation 

report and a NHTSA special crash investigation report. 

Calls for investigation were similarly overlooked. For example, in 

2007, NHTSA’s Associate Administrator for Enforcement noted 

that an investigation proposal, quote, ‘‘looks like one we want to 

jump on and learn as much as we can quickly.’’ While a screener 

was assigned to monitor the issue, the Defects Assessment Division 

Chief did not reassign responsibility after the screener left NHTSA 

in 2008. 

In 2010, an ODI screener suggested revisiting the 2007 investigation proposal on airbag nondeployments because of new consumer complaints. However, the airbag investigator identified a 

downward rate of consumer complaints for the vehicles, so the 

screener decided that the issue did not present enough of a safety 

trend to warrant proposing another investigation. 

According to ODI staff, there were no discussions of the ignition 

switch defect that, in fact, caused airbag nondeployment prior to 

GM’s February 2014 recall. In hindsight, ODI officials told us that 

they did not understand the safety consequences of the ignition 

switch defect and had a flawed understanding of airbag technology. 

NHTSA has committed to taking aggressive action to implement 

the 17 recommendations we made to strengthen vehicle safety 

oversight. According to the Administrator, extensive changes to the 

agency’s processes have been implemented, and more are underway. 

OIG’s audits and investigations support NHTSA’s vehicle safety 

oversight mandate. Our agents played a critical role in the multiagency criminal probe of Toyota and continue to actively pursue allegations of criminal conduct related to vehicle safety. Our auditors 

are currently assessing NHTSA’s actions to implement recommendations we made in 2011 and plan to report our findings 

later this year. 

Mr. Chairman, with your permission, I would like briefly to address those who have been injured and the families of those who 

51 

1 Identifying and Investigating Vehicle Safety Defects (OIG Testimony CC–2014–015), Apr. 2, 

2014. OIG testimonies and reports are available on our Website: www.oig.dot.gov. 2 Recalled vehicles include Chevrolet Cobalts and HHRs, Saturn Ions and Skys, and Pontiac 

G5s and Solstices that were manufactured between 2003 and 2011. 3 Inadequate Data and Analysis Undermine NHTSA’s Efforts To Identify and Investigate Vehicle Safety Concerns (OIG Report No. ST–2015–063), June 18, 2015. 

have been lost in crashes involving GM’s defective ignition switches. 

When testifying before this committee last year, I promised you 

that my staff and I would work relentlessly to determine what 

NHTSA knew of the defect, when it knew it, and what actions 

NHTSA took to address it. Our audit report issued last week and 

my testimony today fulfill that promise. I offer you again my deepest sympathy. 

This concludes my prepared statement. I would be happy to answer any questions that you, Mr. Chairman, and other committee 

members may have. 

[The prepared statement of Mr. Scovel follows:] 

PREPARED STATEMENT OF HON. CALVIN L. SCOVEL III, INSPECTOR GENERAL, 

NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION, U.S. DEPARTMENT OF

TRANSPORTATION

NHTSA’s Efforts to Identify Safety-Related Vehicle Defects 

Chairman Thune, Ranking Member Nelson, and Members of the Committee: 

Thank you for inviting me to this important hearing on your ongoing efforts to 

examine the National Highway Traffic Safety Administration’s (NHTSA) vehicle 

safety oversight program. In April 2014, I testified at this Committee’s hearing 1 on 

the General Motors Corporation’s (GM) delay in recalling 8.7 million vehicles 2 for 

a faulty ignition switch—a defect, which as of this month, has been linked to more 

than 110 fatalities and 220 injuries—and committed to determining what NHTSA 

knew of this safety defect, when the Agency knew it, and what actions were taken 

to address it. In addition, the Secretary of Transportation requested that we examine NHTSA’s current safety defect investigation processes and make recommendations for improvement. 

My testimony today highlights our findings, which we recently reported 3—specifically, our assessment of the procedures NHTSA’s Office of Defects Investigation 

(ODI) uses to (1) collect vehicle safety data, (2) analyze the data and identify potential safety issues, and (3) determine which issues warrant further investigation. 

Summary 

ODI lacks the procedures needed to collect complete and accurate vehicle safety 

data. Notably, ODI guidance specifies 24 categories for reporting potential vehicle 

defects related to an average of over 15,000 vehicle components, leaving manufacturers to use broad discretion in reporting early warning data. Further, ODI does 

not adequately verify the data manufacturers submit. Consumer complaints—ODI’s 

primary source for identifying safety concerns—similarly lack information to correctly identify the vehicle systems involved. 

When analyzing early warning reporting data, ODI does not follow standard statistical practices. Consequently, it cannot differentiate outliers and trends that represent random variation from those that are statistically significant. In addition, 

ODI does not thoroughly screen consumer complaints or adequately train or supervise its staff in screening complaints. Collectively, these weaknesses have resulted 

in significant safety concerns being overlooked. 

ODI’s process for determining when to investigate potential safety defects further 

undermines efforts to identify needed recalls and other corrective actions. ODI emphasizes investigating issues that are most likely to result in recalls, which has led 

to considerable investigative duties being performed during the pre-investigative 

phase, often by screeners who are not trained to carry out these responsibilities. In 

addition, ODI does not always document the justifications for its decisions not to 

investigate potential safety issues and does not always make timely decisions on 

opening investigations. 

52 

4Pub. L. 106–414. 

5Title 49, Code of Federal Regulations (CFR), Part 579. 

6The Early Warning Division currently has four staff including two safety defects analysts, 

one statistician, and one safety defects engineer. 7The Defect Assessment Division currently has nine staff including eight screeners and a Division Chief. 8ODI has three investigative divisions: the Vehicle Control Division, Vehicle Integrity Division, and the Medium and Heavy Duty Vehicle Division. 9Process Improvements Are Needed for Identifying and Addressing Vehicle Safety Defects, (OIG 

Report Number MH–2012–001), Oct. 6, 2011. OIG reports are available on our Website at 

www.oig.dot.gov. 

Background 

ODI is responsible for reviewing vehicle safety data, identifying and investigating 

potential vehicle safety issues, and requiring and overseeing manufacturers’ vehicle 

and equipment recalls (see table 1). NHTSA reports that it has influenced, on average, the recall of nearly 9 million vehicles every year since 2000. 

Table 1.—ODI’s Vehicle Safety Oversight Process 

Phase Number 

of Staff Description 

Pre-Investigation 13 ODI collects and analyzes vehicle safety data to identify and 

select potential safety issues for further investigation. 

Investigation 20 ODI investigates the potential safety issue to determine 

whether a recall is warranted. 

Recall management 8 ODI ensures that manufacturer recalls comply with statutory 

requirements. 

Source: OIG analysis 

ODI’s pre-investigative phase includes four key elements: 

• Collect and analyze early warning reporting data. The Transportation Recall 

Enhancement, Accountability, and Documentation (TREAD) Act 4 of 2000 authorized NHTSA to require manufacturers to report on a variety of early warning data. This data includes property damage claims, consumer complaints, 

warranty claims, and field reports from incidents involving certain vehicle components and conditions defined in NHTSA regulations.5 In addition, manufacturers are required to report all death and injury claims and notices. ODI’s 

Early Warning Division staff 6 are responsible for verifying that manufacturers 

submit these data, prioritizing the data using statistical tests, and identifying 

and referring potential safety trends to the Defects Assessment Division for further analysis. 

• Collect and analyze consumer complaints. ODI receives consumer complaints 

through a variety of sources including letters, vehicle safety hotline calls, and 

submissions through NHTSA’s safercar.gov Website. ODI’s Defects Assessment 

Division screens all complaints and forwards ones with potential safety significance for additional review.7

• Identify potential safety issues. If a potential safety issue is identified, the Defects Assessment Division researches and analyzes available safety data and 

prepares an investigation proposal for ODI’s investigative division chiefs to review.8

• Select potential safety issues to investigate. ODI’s investigative division chiefs review investigation proposals and recommend to the Director of ODI whether to 

open an investigation, decline an investigation, or refer the proposal to the Defects Assessment Panel for further review. 

In October 2011, we reported on NHTSA’s vehicle safety oversight and made 10 

recommendations for improving ODI’s processes for identifying and addressing safety defects.9 As of May 29, 2013, ODI had taken action to address nine recommendations; at the end of April 2015, NHTSA completed a workforce assessment, our remaining recommendation. We are conducting a separate audit to assess these actions and plan to report our findings later this year. 

ODI Lacks Effective Procedures for Collecting Complete and Accurate 

Vehicle Safety Data 

ODI lacks effective guidance and verification procedures to obtain complete and 

accurate early warning reporting data and take timely action to correct identified 

53 

10 According to ODI staff, such guidance would require additional rulemaking. 11 In 2006, ODI initiated an evaluation of its early warning reporting system, with support 

from Volpe. 12 Non-dealer field reports are communications between consumers, authorized service facilities, and manufacturers regarding the failure, malfunction, lack of durability, or other performance problem related to a vehicle or vehicle part. 13Title 49 United States Code (U.S.C.) Section 30166 establishes NHTSA’s subpoena power 

and its authority to inspect manufacturers’ records and require recordkeeping to assess compliance with early warning reporting requirements. 

inaccuracies and omissions. ODI received some early warning reporting data and 

consumer complaints related to the GM ignition switch defect more than a decade 

before GM notified ODI of the recall. 

ODI Lacks Detailed Guidance and Verification Processes to Obtain Complete and 

Accurate Early Warning Reporting Data 

The TREAD Act and related regulations require vehicle and equipment manufacturers to report quarterly to NHTSA on a variety of early warning reporting data 

that could indicate a potential safety defect. Such data include warranty and property damage claims, consumer advisories, and foreign recalls of vehicles substantially similar to ones sold in the United States. 

Regulations specify 24 broad vehicle codes that manufacturers assign to reported 

early warning safety data. However, ODI notes that an average vehicle may have 

over 15,000 components, and categorizing them can be open to interpretation. For 

example, ODI staff told us that a manufacturer could assign one of three vehicle 

codes to a malfunction of an air bag component located in a seat: air bags, seats, 

or electrical system. Additionally, the regulations allow manufacturers to decide if 

an incident not included in the 24 defined codes should be reported, with the exception of incidents related to death and injury claims, which must be reported. 

Despite this complexity, ODI does not provide detailed guidance to help ensure 

manufacturers appropriately interpret and apply the codes.10 ODI investigative 

chiefs and vehicle safety advocates told us that ODI’s early warning aggregate data 

are ultimately of little use due to the inconsistencies in manufacturers’ categorizations of safety incidents. 

According to ODI staff and a January 2008 report issued by the Volpe National 

Transportation Systems Center,11 non-dealer field reports 12 are the most important 

source of early warning reporting data because they can provide a specific, technical 

basis for launching investigations. However, lacking guidance on what information 

should be reported, manufacturers submit reports of varying usefulness. For example, one manufacturer’s non-dealer field reports include detailed information—such 

as the technician’s analysis of the condition, root cause analysis, corrective actions 

taken, and whether the action resolved the condition—while another manufacturer’s 

reports contain brief descriptions of consumers complaints. 

ODI staff check that manufacturers submit early warning reporting data on time 

and may request underlying documentation for aggregate data—particularly if they 

identify an anomaly in the data—and for death and injury data. However, ODI staff 

noted that their requests for such documentation have declined, from an average of 

23 annually between 2006 and 2009 to an average of 4 annually between 2010 and 

2014, as a result of their increased workload. 

Moreover, ODI does not verify that manufacturers’ early warning reporting data 

are complete and accurate. Although ODI has the authority to inspect manufacturers’ records for compliance with early warning reporting requirements,13 NHTSA officials told us the Agency has never used this authority. In addition, the ODI has 

no processes in place for systematically assessing the quality of early warning reporting data or internal guidance on using oversight tools to enforce data reporting 

requirements. The Agency also has not established best practices for providing early 

warning reporting data and does not periodically review manufacturers’ early warning reporting procedures. Instead, the Director of ODI told us ODI relies on the 

‘‘honor system.’’ However, according to ODI staff, manufacturers routinely 

miscategorize safety incidents. For example, staff told us that some manufacturers 

avoid using the word ‘‘fire’’ in non-dealer field reports and instead use phrases such 

as ‘‘strange odor’’ to avoid categorizing an incident as fire-related. Miscategorizations such as these compromise ODI’s efforts to quickly identify potential safety defect trends. 

Yet even in cases where ODI suspects noncompliance, it has not taken prompt enforcement action. For example: 

• ODI officials told us they were aware that a vehicle manufacturer was ‘‘conservative’’ in reporting early warning reporting data. According to a November 2014 

54 

14The manufacturer officials did not follow up with ODI to provide a full explanation of the 

inconsistencies. 15 In addition to the Cobalt, ODI analyzed consumer complaints and death and injury data 

categorized as air bag-related for 21 other passenger vehicles from GM and other manufacturers. 16 49 CFR §§ 579.21(b)(1)-(2). 

audit prepared for the manufacturer, two ODI employees called the manufacturer’s officials in late 2011 or early 2012 to ask about inconsistencies between previously reported early warning reporting data and reported death and injury incidents pertaining to an air bag recall.14 However, ODI took no enforcement action to address this issue until the manufacturer self-reported the omission of 

about 1,700 death and injury claims in October 2014. NHTSA subsequently required the manufacturer to describe its procedures for complying with early 

warning reporting requirements and provide the Agency with supporting documentation for all third-party audits of its reporting. 

• In November 2004, ODI discovered that a major recreational vehicle manufacturer did not report required death and injury data and other early warning reporting data. However, ODI did not take action until nearly a decade later, 

when the office opened an investigation into the manufacturer’s reporting following a suspected recall noncompliance issue. During the investigation, the 

manufacturer stated that it failed to report the early warning reporting data 

because of internal miscommunications and a software failure. 

ODI Does Not Provide Sufficient Guidance to Consumers on the Type of Information 

To Include When Submitting Complaints 

ODI relies primarily on consumer complaints—most of which are submitted 

through NHTSA’s safercar.gov Website—to identify potential safety defects. The online complaint form requires consumers to select up to 3 affected parts from a dropdown list of 18 options, such as air bags and electronic stability control. Additionally, the Website provides a text field for consumers to describe the incidents underlying their complaints. 

ODI’s initial screener estimates that 50 to 75 percent of complaints incorrectly 

identify the affected parts, and roughly 25 percent do not provide adequate information to determine the existence of safety concerns. These data quality issues occur 

in part because ODI does not provide consumers with detailed guidance on submitting complaints. For example, safercar.gov does not define the 18 affected parts categories—some of which may be unfamiliar to consumers, such as ‘‘adaptive equipment.’’ Furthermore, safercar.gov does not allow consumers to submit, or encourage 

them to retain, supporting documentation (such as photographs or police reports), 

which ODI’s screeners and management have indicated are valuable in identifying 

potential safety concerns. In contrast, the U.S. Consumer Product Safety Commission’s complaint Website (saferproducts.gov) allows consumers to upload as many as 

25 documents or photos related to their complaints. 

ODI Received Early Warning and Consumer Complaint Data Related to GM’s 

Ignition Switch Defect 

From 2003 through 2013, GM submitted about 15,600 non-dealer field reports and 

about 2,000 death and injury reports on vehicles subject to the ignition switch recall. A 2011 ODI analysis of early warning reports for 22 vehicles with potential air 

bag issues ranked the 2005 to 2010 Chevrolet Cobalt models fourth for fatal incidents and second for injury incidents involving air bags.15

However, GM’s categorization of early warning reporting data related to the faulty 

ignition switch may have masked potential trends. Specifically, GM assigned different codes to non-dealer field reports describing ignition switch problems. For example, GM assigned the ‘‘Engine and Engine Cooling’’ code to a non-dealer field report on a 2005 Chevrolet Cobalt that concluded a minor impact to the ignition key 

could easily cause the engine to shut off. In another case, GM assigned the ‘‘Electrical’’ code to a non-dealer field report on a 2006 Pontiac Solstice that described 

the vehicle ignition system turning off several times while driving when his knee 

hit the key ring. 

Moreover, underlying documentation did not support GM’s categorization of the 

early warning reporting data. NHTSA regulations require manufacturers to identify 

each vehicle system or component that allegedly contributed to incidents related to 

death and injury claims and notices.16 Documentation underlying a death and injury report related to a fatal accident involving a 2005 Chevrolet Cobalt included 

a Wisconsin State trooper’s report indicating that the ignition switch and air bags 

were both involved in the accident. However, GM categorized the death and injury 

55 

17From January 1, 2003, through February 7, 2014, ODI received 9,266 complaints involving 

the vehicles subject to the GM ignition switch recall—including 72 complaints indicating at least 

1 injury and 3 complaints indicating at least 1 fatality. The majority of these complaints involved the 2005 to 2010 Chevrolet Cobalt and the 2003 to 2007 Saturn Ion. 18The statistical experts we consulted with are from academia and research institutes. 

report as not involving any of the systems, components, or conditions defined in regulations. 

Some consumer complaints were also miscategorized or lacked sufficient detail to 

link them to the ignition switch defect.17 For example: 

• ODI contractors used the codes ‘‘Unknown or Other’’ and ‘‘Exterior Lighting: 

Headlights: Switch’’ when entering a September 2003 complaint into Artemis— 

ODI’s primary database for storing data used to identify and address potential 

safety defects. However, the complaint described engine shutoffs in a 2003 Saturn Ion when the driver’s knee accidently hit the car keys, so the incident that 

should have been coded as ‘‘Electrical Systems: Ignition: Switch’’ 

• A June 2005 complaint related to an accident involving a 2005 Chevrolet Cobalt 

did not specify whether the accident occurred on or off the road, or whether the 

impact was to the front, side, or back of the vehicle—essential details to ODI’s 

analysis of air bag non-deployment in these vehicles. Instead, the complaint 

only stated that an accident had destroyed the vehicle and injured one person 

and that the air bags did not deploy. 

Weak Data Analyses and Reviews Undermine ODI’S Efforts to Identify 

Vehicle Defects 

ODI does not follow standard statistical practices when analyzing early warning 

reporting data, conduct thorough reviews of consumer complaints, or provide adequate supervision or training for staff responsible for reviewing these data and complaints. As a result, it cannot reliably identify the most statistically significant safety issues to pursue. In the case of GM, ODI missed multiple opportunities to link 

the ignition switch defect to air bag non-deployments because ODI staff lacked technical expertise and did not consider all available information. 

ODI Does Not Follow Standard Statistical Practice When Analyzing Early Warning 

Reporting Data 

ODI uses four statistical tests to analyze aggregate early warning reporting data 

(such as consumer complaints, warranty claims, and property damage claims)—as 

well as a fifth test to analyze non-dealer field reports (see table 2). 

Table 2.—ODI’s Statistical Tests for Analyzing Early Warning Reporting Data 

Statistical test Description 

Crow-AMSAA Trend analysis used to analyze aggregate data 

Mahalanobis distance Test used to analyze aggregate data 

Probability measure Test used to analyze aggregate data 

Logistic regression Regression test used to analyze death and injury aggregate data 

CRM–114 Filter used to analyze non-dealer field reports 

Source: OIG analysis 

While the statistical experts we consulted 18 note that conducting multiple tests 

provides a sound basis for analysis, ODI does not follow standard statistical practices when implementing tests of aggregate data. Specifically, ODI does not consistently identify a model (a set of assumptions) for the aggregate data to establish a 

base case—that is, what the test results would be in the absence of safety defects. 

Without a base case, ODI cannot differentiate outliers that represent random variation from trends that are statistically significant and indicate a safety issue should 

be pursued. 

ODI has missed opportunities to update and improve its statistical methods for 

analyzing early warning reporting data. For example: 

• ODI does not regularly assess the performance of its aggregate data tests. According to the statistical experts, out-of-sample testing—a standard statistical 

assessment practice—would allow ODI to determine whether potential safety 

issues identified in one portion of its aggregate data turn up in the remaining 

portion. However, ODI performed out-of-sample testing on only one aggregate 

56 

19We independently verified that, in 1 week of review, the initial screener forwarded about 

10 percent of complaints to advanced screeners. 

data test and only when the test was first implemented. ODI also conducted 

out-of-sample tests on non-dealer field reports, but it has not done so since 

2009. 

• Despite recent developments in data analytics, ODI has not updated its statistical tests from initial implementation in 2006 through 2009, so it has not taken 

advantage of recent methodological advances. Although ODI has periodically recalibrated some of its tests using current data, it has not updated the analytical 

methodologies it uses. 

• Volpe conducted the only external review of ODI’s aggregate data tests since 

their implementation. According to its January 2008 report, Volpe reported that 

the review’s scope was limited because of concerns about the informational burden on ODI and manufacturers. As a result, Volpe was unable to reach any conclusions about the tests’ effectiveness. ODI has not requested any other external 

reviews of its statistical tests. 

ODI similarly lacks procedures to promote timely screening of early warning reporting data. For example, ODI’s Early Warning Division staff review non-dealer 

field reports based on the results they receive from a statistical test; however, there 

is no process for ensuring that all non-dealer field reports are included in the universe from which the sample is drawn. ODI has overlooked non-dealer field reports 

for months or even years if, for example, manufacturers submit the reports in formats that ODI’s statistical test cannot process. 

In addition, advanced screeners, who are responsible for proposing safety defect 

investigations, told us that they are less likely to rely on early warning reporting 

data because of the data’s lack of timeliness. The information in early warning reporting data can be delayed by months because manufacturers submit the reports 

quarterly. 

ODI Does Not Thoroughly Screen Consumer Complaints 

In 2014, ODI received nearly 78,000 consumer complaints—or roughly 330 complaints each day. Despite the volume of complaints, ODI’s two-tiered screening process leaves the office vulnerable to a single point of failure and the risk that complaints with potential safety significance may not be selected for further review. 

Currently, one employee reviews all submitted consumer complaints, determines 

which complaints have potential safety implications, and forwards those complaints 

to eight advanced screeners who perform more in-depth reviews. Determinations of 

whether complaints warrant further review are made within a matter of seconds— 

in part because the initial screener spends roughly half of the day carrying out other 

work responsibilities. According to the initial screener and our independent 

verification, about 10 percent of complaints are forwarded to advanced screeners for 

in-depth reviews,19 leaving no assurance that the remaining 90 percent of complaints receive additional review. ODI recently completed a workforce assessment to 

determine the number of staff required to meet ODI’s objectives and determine the 

most effective mix of skill sets, a recommendation we made in 2011. 

ODI also lacks formal guidance for screening complaints. The initial screener relies on professional experience and judgment, as well as informal guidance and 

precedent to determine which complaints to forward to the advanced screeners. He 

noted that some complaint categories automatically warrant further analysis—including most air bag non-deployments and seatbelt issues—and that he prioritizes 

incidents that occur suddenly, with little warning for the consumer. He also noted 

that he assigns lower priority to engine, transmission, and vehicle body issues and 

generally does not forward certain incidents that most likely do not lead to investigations, such as sharp door edges. The initial screener does not forward complaints 

he believes are covered by existing recalls. 

Like the initial screener, ODI’s eight advanced screeners have access to a variety 

of data sources—such as technical service bulletins and special crash investigation 

reports—and have the authority to reach out to consumers and perform field inspections to augment their research. However, three advanced screeners said they rely 

mainly on consumer complaints to identify safety concerns, and four advanced 

screeners said they only occasionally use other sources of data. While screeners are 

encouraged to query all complaints for issues in their areas of concentration, four 

screeners told us they do not consistently do this—in some cases because it takes 

too much time. Advanced screeners also have access to early warning reporting 

data; however, four advanced screeners told us that they are less likely to rely on 

these data because they are untimely. Two screeners were also concerned about the 

57 

20 An event data recorder is a device installed in a vehicle to record technical vehicle and occupant information for a brief period of time (seconds, not minutes) before, during, and after a 

crash. 

early warning reporting data’s lack of usefulness because they felt the data provided 

no significant additional detail. 

In 2013, ODI began requiring advanced screeners to annotate the complaints they 

review by documenting the condition that led to the incident and their reasons for 

deciding not to pursue potential issues. According to the Defects Assessment Division Chief, the annotations are intended to identify and correct inconsistencies and 

inaccuracies in complaints—and thereby enable ODI to properly link them to relevant safety concerns—and provide a record of review. However, an ODI internal 

audit found that roughly half the complaints were incorrectly annotated or lacked 

critical information. Additionally, we analyzed annotations for complaints received 

in the fourth quarter of 2013 and found that about 57 percent of the complaints that 

screeners determined did not warrant further review lacked justifications. Advanced 

screeners told us that annotating complaints is time consuming. 

ODI’s Pre-Investigation Staff Lack the Training and Supervision to Effectively 

Analyze Vehicle Safety Data 

NHTSA has not adequately prepared ODI staff who review early warning reporting data and consumer complaints to carry out their responsibilities. For example: 

• ODI staff charged with interpreting statistical test results for early warning reporting data told us they have no training or background in statistics. 

• Three screeners assigned to analyze air bag incidents lacked training in air 

bags. One screener who was originally hired to review child seat restraint 

issues was assigned in 2008 to review air bag issues—without any air bag training and without an engineering or automotive background. 

• Screeners told us that training to maintain professional certifications—such as 

the Automotive Service Excellence certification for automotive mechanics—must 

be completed on their own time and generally at their own expense. 

• Screeners also noted that ODI lacked the funding to allow them to attend training to stay abreast of the latest developments in vehicle technology. 

In addition, ODI has not established an adequate supervisory review process to 

evaluate the quality of screeners’ work in identifying potential safety issues. For example, the Defects Assessment Division Chief characterized his oversight of the initial complaint screener’s work as ‘‘minimal’’ and acknowledged that he does not provide much guidance to the initial screener. Advanced screeners agreed that supervisory review is often informal and that the Defects Assessment Division Chief does 

not regularly review their complaint annotations. In addition, ODI staff told us that 

their data analysis and screening efforts were generally not reviewed and that they 

received little feedback on the quality of their work. 

Inadequate training and supervisory review have led to deficient analyses of early 

warning reporting and complaint data. For example, the developer of one statistical 

test that ODI uses to analyze early warning reporting data stated that the test 

should produce the same results every time for the same data input in the same 

order. However, ODI staff told us that different test runs produce different results, 

and management has not considered this to be a problem. 

ODI Staff Overlooked Documentation Pointing to the GM Ignition Switch Defect 

In their reviews of non-dealer field reports and death and injury and special crash 

investigation reports, ODI staff missed opportunities to connect the GM ignition 

switch defect to air bag non-deployments. For example, ODI employees overlooked 

documentation on a fatal accident involving a 2005 Chevrolet Cobalt that linked the 

ignition switch defect to the vehicle’s air bag non-deployment: 

• A Wisconsin State Trooper’s report that identified the ignition switch defect as 

a possible cause of air bag non-deployment during the accident. 

• Event data recorder data 20 that showed the vehicle’s power mode status had 

been in the ‘‘accessory’’ position during the accident—a key indicator of the ignition switch defect. 

• A NHTSA special crash investigation report that concluded the vehicle’s air 

bags failed to deploy possibly due to ‘‘power loss due to movement of the ignition switch just prior to the impact.’’ 

Between the second quarter of 2012 and the fourth quarter of 2013, ODI received 

13 non-dealer field reports on the 2005 to 2010 Chevrolet Cobalts that GM catVerDate Nov 24 2008 08:11 May 04, 2016 Jkt 075679 PO 00000 Frm 00061 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\99955.TXT JACKIE
58 

21To determine which non-dealer field reports were related to the ignition switch recall, we 

limited this analysis to vehicle models, model years, facts, and circumstances that would make 

an incident eligible for compensation through the GM ignition switch compensation fund. 22The rate of complaints is the number of relevant complaints received by NHTSA divided 

by the number of vehicles in production. 

egorized as air bag-related and that we determined may be related to the ignition 

switch defect.21 However, ODI staff reviewed only one of these non-dealer field reports before the February 2014 recall. According to ODI staff, they did not review 

the majority of these reports because in the second quarter of 2012, GM began using 

a new file format for most of their document submissions, which could not be read 

by the statistical test ODI uses to analyze these reports. ODI staff acknowledged 

that they did not notice the reports were not analyzed until after the recall. 

ODI also received 9,266 consumer complaints between January 1, 2003, and February 7, 2014, that involved GM vehicles subject to the ignition switch recall. Because ODI’s screeners were not required to annotate their reviews of complaints 

until 2013, ODI cannot establish a full picture of why it did not investigate complaints related to the GM ignition switch and air bag non-deployment issues prior 

to 2013. From the time that the annotations were required to the date of the recall, 

ODI received 926 consumer complaints involving the recalled vehicles. ODI’s initial 

screener advanced 27—or 3 percent—of these complaints for further review, compared to the average of 10 percent that are typically forwarded. ODI’s advanced 

screeners noted in their annotations that 11 of the 27 complaints included allegations of front air bag non-deployment, but they did not advance these complaints 

for further consideration because they concluded there was either ‘‘no actionable 

trend indicated’’ or ‘‘minimal hazard.’’ ODI staff did not thoroughly understand 

when air bags were supposed to deploy in these vehicles, which prevented them 

from linking the ignition switch defect to the air bag non-deployment. This may be 

explained by ODI staff’s acknowledged lack of training on air bags. 

ODI prepared three proposals for investigating the loss of power steering and air 

bag non-deployment in the Chevrolet Cobalt and Saturn Ion. While each proposal 

was supported by early warning reporting referrals, ODI staff did not establish the 

ignition switch defect as a potential root cause for these issues. ODI officials told 

us that they did not understand the safety consequences of the ignition switch defect before the GM recall. 

ODI Initiates Investigations Without Assurance That the Most Significant 

Safety Defects are Targeted 

ODI’s decisions on whether to open an investigation are not backed by guidance 

for applying the factors it established for opening an investigation. In addition, decisions lack transparency and accountability. This was the case with ODI’s decision 

not to investigate the GM air bag non-deployment defect. 

ODI Lacks Consensus and Detailed Guidance on the Amount and Type of 

Information Needed To Open Investigations 

According to ODI’s Defects Assessment Division Chief, ODI considers three factors 

when proposing a vehicle safety defect investigation: (1) rate of consumer complaints,22 (2) severity of the potential safety issue, and (3) identification of a potentially defective vehicle component or root cause. However, ODI has not developed 

specific guidance on how screeners should apply these factors, and there is a lack 

of consensus among ODI leadership on the factors necessary to open an investigation—leaving screeners uncertain about how much support is needed to propose an 

investigation. 

Attorneys in NHTSA’s Office of Chief Counsel state that while NHTSA must establish severity for all cases, it can establish either frequency or root cause to force 

a manufacturer to initiate a recall. The Director of ODI prefers screeners to focus 

on establishing the safety consequences of a potential defect rather than determining root cause, and ODI’s two investigative chiefs agree that establishing a pattern of safety concerns is more important than identifying root cause. However, 

ODI’s Defects Assessment Division Chief expects advanced screeners to find the root 

cause in order to build a compelling proposal for an investigation. 

The Director of ODI can also unilaterally decide not to open an investigation after 

discussion with Defects Assessment Panel participants. For example, the Director 

of ODI decided not to pursue two investigative proposals after concluding that they 

presented minimal hazards. The first proposal, made in June 2014, related to 2007 

to 2011 vehicles that suddenly lost steering power assist; the second, made in July 

2014, related to 2012 model vehicles that experienced intermittent loss of electrical 

59 

23The Defects Assessment Panel is a body chaired by the Director of ODI that is intended 

to meet monthly to review investigation proposals and decide whether to open an investigation. 

power. Both proposals established the rate of complaints, severity of the issue, and 

the defective components. 

Without specific guidance on the amount and type of information needed to 

launch an investigation, screeners largely rely on precedent and professional judgment to determine which issues merit investigation. One screener told us he uses 

his ‘‘gut feeling’’ when reviewing complaints to gauge the ‘‘appetite’’ of the office for 

specific issues. Another screener told us he only proposes investigations that have 

the greatest chance of being selected to avoid the extra work of proposing investigations that are ultimately denied. Three screeners said they are hesitant to propose 

investigations if similar proposals have been rejected in the past. 

In general, ODI officials prefer to open investigations that are most likely to result in a manufacturer recall—an assertion echoed by four of the eight screeners we 

spoke with. In 2011 and 2012—the most recent years for which ODI has actionable 

data—about 70 percent of the investigations eventually resulted in recalls. According to an ODI investigative division chief, repeatedly opening investigations that do 

not result in a recall could cause ODI to lose credibility with manufacturers. However, ODI’s focus on issues most likely to result in recalls creates the potential for 

missed opportunities to investigate issues that have serious safety implications. 

Targeting potential safety defects that most likely lead to recalls also blurs the 

line between pre-investigative and investigative duties. Considerable investigative 

duties—such as research and engineering analysis work—are being performed in 

the pre-investigative phase, often by screeners who are not adequately trained to 

perform this work. In one case, a screener told us he could not detect any exhaust 

odor in a vehicle, but subsequent work by investigative staff found that the carbon 

monoxide level reached Consumer Product Safety Commission thresholds for noticeable headache, fatigue, and nausea, and exceeded Occupational Safety and Health 

Administration standards if exposure exceeded 8 hours. 

In addition, screeners may not have access to the data needed to prompt an investigation, such as manufacturer data. While NHTSA’s Office of Chief Counsel stated 

that ODI may compel information from manufacturers during the pre-investigative 

stage, the Defects Assessment Division Chief told us they generally do not compel 

this information without first launching an investigation. Regardless, three screeners were unaware that their division has the authority to compel information from 

manufacturers without launching an investigation. These added duties not only take 

time away from the advanced screeners’ primary duty of screening safety data, 

which can result in backlogs of those data, but can cause potential safety defects 

to be overlooked. 

ODI’s Investigation Decision Process Lacks Transparency and Accountability 

ODI’s investigation decision process involves several steps. First, the Defects Assessment Chief provides a list of proposals to ODI’s investigative division chiefs— 

along with supporting documentation, such as consumer complaints and warranty 

claims. The division chiefs then review the proposals and decide whether to open 

an investigation, decline to investigate, or send the proposal to ODI’s Defects Assessment Panel for further review.23 According to ODI’s written policy, division 

chiefs have 2 weeks to complete their review. However, the investigative division 

chiefs consider the 2-week requirement to be a suggested time-frame that should be 

balanced against other competing priorities. 

If a proposal is sent to the Defects Assessment Panel, investigation decisions are 

frequently delayed. The panel often reschedules meetings, and according to some 

screeners, the meetings tend to be pro forma. For example, one screener stated the 

meetings focus on the reasons for not opening an investigation rather than reasons 

for opening one. The panel also repeatedly delays decisions on proposals to obtain 

additional information. For example: 

• In August 2014, the panel reviewed a proposal to investigate a side air bag nondeployment that resulted in a fatality. At that meeting, the Director of ODI, 

who sits on the panel, requested additional information. By October, the manufacturer had responded to ODI’s questions, but an investigative division chief 

requested that an investigation not be opened until his team had completed an 

on-site inspection of the vehicle involved in the accident. As of the most recent 

panel meeting in February 2015—5 months after the panel first reviewed the 

potential defect—a decision to investigate this issue remains pending. 

• In January 2014, the panel discussed a proposal on a vehicle’s steering failure. 

However, the panel has delayed the decision whether to investigate this issue 

60 

24 According to GM, frontal air bag deployment takes into consideration factors such as speed 

of the vehicle, severity and location of the impact, and rate of deceleration. Air bags are programmed not to deploy in non-accident circumstances, such as driving over potholes or rough 

terrain. 

for over a year—despite a recommendation from the investigative division to 

open an investigation. 

In addition to delays, ODI’s decisions are not transparent. Of the 56 investigation 

proposals for light vehicle safety defects in 2013, 32 were not investigated—18 of 

which lacked documented justifications for not investigating. While the panel may 

provide a reason for declining an investigation, such as ‘‘minimal hazard,’’ it does 

not document the evidence that supports its decision. In addition, a proposal may 

be rejected by investigation divisions, which do not always document reasons for declining to investigate. Lack of transparency exacerbates the problems created by reliance on precedent because screeners do not learn what management deems worthy 

of investigation. 

Transparency and accountability are especially critical since ODI generally does 

not revisit proposals once they are declined for investigation. Screeners told us that 

there is a need for ever increasing numbers of incidents to consider reopening previously rejected investigative proposals. While ODI lists declined proposals in 

Artemis as being ‘‘monitored,’’ it does not track who monitors these issues. Half of 

the advanced screeners consider monitored proposals to be essentially denied and 

rarely resubmit proposals unless there is a new angle or ‘‘smoking gun.’’ One screener said resubmitting a proposal is like ‘‘beating a dead horse.’’ 

ODI Did Not Investigate or Adequately Monitor the GM Air Bag Non-Deployment or 

Ignition Switch Issues 

At a November 2007 Defects Assessment Panel meeting, ODI management and 

staff discussed a proposal to investigate frontal air bag non-deployments related to 

the Chevrolet Cobalt and Saturn Ion. ODI ultimately declined the proposal but did 

not document its justification for doing so. According to ODI staff, the decision not 

to investigate was based on a flawed understanding of air bag technology. Specifically, the Defects Assessment Panel believed the air bags did not deploy because the 

drivers were not wearing their seatbelts and because the vehicles left the road during the accidents.24 At the same panel meeting, an ODI air bag investigator advocated against opening an investigation because he had concluded, based on his analysis of complaints, that the rate of air bag non-deployment complaints for the Cobalt 

and Ion was similar to that of peer vehicles. 

According to ODI staff who attended the 2007 panel meeting, the Defects Assessment Panel had requested that the potential safety defect be monitored to identify 

future air bag non-deployments occurring on the road, where air bag deployment 

would be expected. In addition, NHTSA’s Associate Administrator for Enforcement, 

who did not attend the panel discussion, told the Director of ODI and the Defects 

Assessment Division Chief that ‘‘given the reports of fatal crashes, this 

[investigation proposal] looks like one we want to jump on and learn as much as 

we can quickly.’’ The ODI screener who prepared the investigation proposal was initially assigned to monitor the issue. However, the Defects Assessment Division 

Chief did not reassign that responsibility after the screener responsible for monitoring the issue left NHTSA in 2008. 

ODI missed other opportunities to investigate the air bag non-deployment issue. 

For example, in April 2009, the Defects Assessment Division Chief requested a special crash investigation of a collision involving air bag non-deployment in a 2005 

Chevrolet Cobalt. However, ODI did not follow up on the investigation’s results, and 

the Defects Assessment Division Chief had no explanation for why ODI did not pursue the issue. Two ODI staff members reviewed the findings of the special crash 

investigation in February 2010, but neither reported the results of their reviews. 

The first, an investigator, told us he did not report the results because he was not 

responsible for screening safety issues. The second, an advanced screener, told us 

that while he does not recall reviewing the report, he would only have noted issues 

in his area of concentration: engine, power train, and speed control. 

According to ODI officials, in 2010, an ODI screener suggested revisiting the 2007 

investigation proposal on air bag non-deployments in the Chevrolet Cobalt because 

of new consumer complaints. However, after the air bag investigator updated his 

analysis of consumer complaints and identified a downward rate of complaints for 

the vehicles, the screener decided that the issue did not present enough of a safety 

trend to warrant renewing the investigation proposal. 

While ODI identified air bag non-deployments as a potential safety issue, it did 

not identify or propose an investigation of the GM ignition switch issue. According 

61 

to ODI staff, there were no discussions of the ignition switch defect prior to the February 2014 recall. 

This concludes my prepared statement. I will be happy to answer any questions 

you and other Committee Members may have for me. 

The CHAIRMAN. Thank you, Mr. Scovel. 

Administrator Rosekind, I know you only took the helm here at 

NHTSA at the end of last year, and I know you have been working 

to improve NHTSA’s handling of vehicle defects. And I would say 

you have your work cut out for you. 

The Inspector General’s report reaches some serious conclusions 

regarding NHTSA’s ability to detect vehicle defects, highlighting 

things like failure to review information provided by both industry 

and consumers, botched data analysis, inadequate training and supervision as major problems for the agency. All of these have to 

concern you. 

And while we have to ensure that automakers properly report 

safety violations, it doesn’t help if NHTSA’s staff are not even reviewing the information or if, when they do, they aren’t employing 

proper statistical analyses to detect defects. 

NHTSA isn’t following basic best practices, and these are process 

issues that can’t be solved just by throwing additional resources at 

the problem. So my question is, how do you propose to address 

these issues? 

Mr. ROSEKIND. Thank you for acknowledging the challenges that 

exist in our head. 

We have concurred with all 17 of the recommendations. They 

validate and are consistent with our two reports, as well. 

So I would like to provide to the Committee a list of 44 actions 

that we already have underway. Ten of the 17 are addressed in 

those. And they get exactly to detailed action on each of these elements, from communication to case management to statistical 

tests, to make sure that every one of those—and I am just highlighting. 

There were 17 in their report. Our total actions are already up 

at 44. We will continue to look for every place possible that we can 

make changes. 

I will just add, I think we will look for all the internal changes 

we can, but what is also critical about the report, though it is outside their report to talk about the resources, so many people have 

heard me discuss: 80,000 complaints. We are literally looking at an 

individual screener having to have five reports analyzed every 

hour. Each of those reports actually takes an hour. 

So when the IG report says it is inadequate, I agree. And we 

have to change those. 

The CHAIRMAN. Inspector General Scovel, you identified three 

general areas of concern in your audit of the pre-investigation practices of NHTSA’s Office of Defects Investigations. In your opinion, 

what does NHTSA need most? More information? More expertise? 

Better practices for reviewing and analyzing data they already receive? 

Mr. SCOVEL. Thank you, Mr. Chairman. 

Right now, I would say the onus is on NHTSA to press forward 

with the process changes that we have outlined in our audit report 

and in my testimony today. 

62 

We are very pleased to understand that the Administrator has 

concurred in all 17 of our recommendations and, in fact, in his response to our audit report last week, indicated a very aggressive 

schedule, signaling his intent to press forward as quickly as possible. 

I understand the Administrator’s request for resources. That ultimately represents a policy decision between the administration and 

the Congress. I am fully cognizant of that and respect my role. 

However, I would have to say that allocating more resources to an 

effort or to an agency whose processes are not in line in the first 

place does not seem like a good idea. 

We would urge the Administrator to press forward with his aggressive timeline to address our recommendations, as well as his 

own process improvements that he has identified, in order to best 

position himself for success no matter what the policy decision may 

be regarding additional resources. 

The CHAIRMAN. Mr. Rosekind, you have recently taken some unprecedented steps with regard to NHTSA’s handling of the defective Takata inflators, including issuing a preservation order and a 

consent order and announcing efforts to facilitate a coordinated 

remedy program. 

How does the agency plan to implement this program? 

Mr. ROSEKIND. And thank you for acknowledging the effort there. 

It was this committee that really helped focus for the entire country and the needed actions ahead. That all changed on May 19. We 

went from denying a defect to having acknowledgment of not only 

a defect but national recalls, the consent order, which allows us to 

actually help evaluate the remedy, as well as the coordinate remedy program, which is not just acceleration but even more advanced prioritization. 

So, right now, we have actually already been in touch with all 

11 manufacturers, 7 potential supply folks, and have sent them a 

letter that outlines all the information we need to determine how 

this has to proceed. So the first meetings are already scheduled for 

July 1 with each of those individual groups. There will be both individual and group meetings through July, with our hope that August will be—we will take all that information, put it together. 

Planning for a public hearing in September that would allow us to 

lay out the program, which is very complicated. 

The CHAIRMAN. Good. 

And, very quickly, Mr. Scovel, could you just please discuss some 

of the difficulties that NHTSA has encountered or experienced in 

receiving consumer complaints? And how would clearer guidelines 

benefit the public? 

Mr. SCOVEL. In receiving complaints, Mr. Chairman, we would 

highlight a couple of things for the Committee’s attention. 

First, in the way that NHTSA collects its data. Data quality has 

to be an ultimate concern for NHTSA in its effort to identify vehicle safety defects, because if that data is not of the highest quality, 

then essentially defects will be missed and resources may be 

squandered. So the accuracy and the completeness and the timeliness of those data submissions is essential. 

And that data comes from a number of different sources. The 

early warning reporting data from the manufacturer, that process 

63 

needs to be improved. As we have shown and NHTSA has acknowledged, the broad discretion allowed to manufacturers in categorizing potential problems or defects means that the data quality is 

diluted, it is diffuse. And the best analysts at NHTSA or anywhere 

in the world will not be able to reach a proper conclusion based on 

data that is unsupportable. 

We also would note that—and I commend the Administrator for 

his attention to that and his remarks this morning, too, that they 

intend to follow up with manufacturers more often. 

In our interviews of every single employee in the Office of Defects Investigation and a representative of each of the contractors 

that works in that effort, we learned from the highest sources in 

that office that they generally employ what he called an honor system in order to determine whether manufacturers are meeting 

their requirements to submit this early warning reporting data. 

For a safety regulator to take that approach, sir, we think is not 

keeping the best safety interests of the public in mind. 

Consumer complaints, Mr. Chairman, which historically has been 

the primary source for NHTSA to identify safety concerns, are also 

diffuse, have also been watered down, in effect, because of a lack 

of guidance from the agency to consumers who are seeking to report accidents and defects to the agency but who find themselves 

at a loss when confronting on the website 18 different category 

codes in a vehicle that has 15,000 components and they themselves 

are not automotive experts. 

Certainly, some consumers are going to get it wrong. But, in 

many others, the most well-meaning and those who have themselves or their families have been impacted by vehicle safety defects will read the guidance and attempt to follow it as best they 

are able. The agency performance will improve as a result. 

The CHAIRMAN. Thank you, Mr. Scovel. 

Senator Nelson? 

Senator NELSON. You know, there is a pattern here among these 

regulatory agencies that are supposed to be looking out for the consumer. We saw this about 10 years ago with the Consumer Product 

Safety Commission when we had all of that Chinese drywall problem, the defective Chinese toys, and so forth, and a card table was 

their research department. So, too, we are now hearing stuff about 

the agency that you are trying to straighten out, Mr. Rosekind. 

Tell me, you all came up with 33.8 million vehicles to be recalled 

on this Takata matter. How did you come up with that number? 

Mr. ROSEKIND. So our estimate is that there are about 34 million 

inflators that are defective, and they are in about 32 million vehicles. So that is acknowledgment that some vehicles have both driver and passenger airbags that need to be replaced. It also includes 

that some cars have interim remedies. They need to come back 

again. 

Senator NELSON. Right. 

Mr. ROSEKIND. So that is why 34 million inflators in 32 million 

vehicles. 

Senator NELSON. Do you have the Vehicle Identification Number 

for all of those? 

Mr. ROSEKIND. Yes. Those have been provided by all of the 11 

auto manufacturers at this point. 

64 

Senator NELSON. All right. 

Now, you have heard what the Inspector General said about this 

Office of Defect Investigations. What do you think you need to do 

to ensure that ODI does not miss the next GM ignition defect or 

the next Takata airbag crisis? 

Mr. ROSEKIND. This is why we have fully concurred with all 17 

recommendations. They all need to be addressed. That is why I am 

going to submit to you our list of 44 total actions that are going 

on that really get to all of these processes that we are discussing. 

But it is also an ongoing evaluation. That is part of the issue 

here. We can’t stop looking. So I am going to give you 44 different 

areas. I can give you plenty of examples if you want. I would rather 

just give you the list for the moment. But part of it also has to be 

not just that list but an ongoing evaluation to make sure that on 

a continual basis we are looking for ways that we can improve the 

processes and do it faster and better. 

Senator NELSON. OK. 

I want to suggest to you one area. In this ODI, as the Inspector 

General has just talked about, get about 80,000 complaints each 

year. Yet there is one person who conducts the first review of these 

complaints. And this particular person has other duties, so spending 50 percent of that person’s time doing other things. 

So, if you do the math, that person, who spends 4 hours a day 

on this, would have to review, process, and follow on and flag over 

80 complaints an hour. That is less than one complaint a minute. 

So how in the world can you get it done? 

Mr. ROSEKIND. You can’t. And that is why I agree with the IG’s 

report. It specifically called out the scanning of those reports as 

being inadequate. It is. 

And you have just pointed out that that is a resource issue. You 

have too many complaints and not enough people. 

That original person is a triage point to try and get it somewhere 

else, but it is just overwhelming. 

Senator NELSON. All right. 

I am going to yield the rest of our time because I want our members to go on and get a chance to get into this. 

The CHAIRMAN. Thank you, Senator Nelson. 

Senator McCaskill is up next. 

STATEMENT OF HON. CLAIRE MCCASKILL, 

U.S. SENATOR FROM MISSOURI 

Senator MCCASKILL. Thank you. Thank you, Mr. Chairman, and 

thank you, Senator Nelson, for your incredible focus on this issue. 

As the Chairman and the Ranking know, we obviously did a lot 

of hearings around the GM recall and a lot of hearings around the 

failures of NHTSA. 

I want to first begin with rental car safety. Honda confirmed on 

Friday that the eighth death linked to a faulty airbag occurred last 

September in California. This was a rental car from Sunset Car 

Rental in San Diego that never made the repairs after the recall. 

I, along with Senator Schumer and others, have legislation pending that would prohibit a car from being rented at a rental car 

agency until open safety recalls are in fact remedied. We have the 

65 

support of the rental car industry, the consumer and safety advocates, the insurance companies, and General Motors. 

But, unfortunately, many auto manufacturers are blocking this 

legislation right now. The Alliance of Automobile Manufacturers 

has opposed this legislation, and they are saying that they should 

only be grounded if there is a do-not-drive recall. 

Let me ask you, Dr. Rosekind, have any of the 11 manufacturers 

issued a do-not-drive recall related to the faulty airbags? 

Mr. ROSEKIND. Not that I am aware of. And, annually, that number is very small. 

Senator MCCASKILL. And what about NHTSA? Do you support 

the efforts that we have ongoing to try to ground rental cars that 

have not been repaired? 

Mr. ROSEKIND. Absolutely. 

Senator MCCASKILL. OK. 

I would like to put into the record the American Car Rental Association and Consumers for Auto Reliability and Safety, their 

written statements for the record, if I might, on that subject. 

The CHAIRMAN. Without objection. 

[The information referred to follows:] 

WRITTEN STATEMENT OF THE AMERICAN CAR RENTAL ASSOCIATION AND CONSUMER

FOR AUTO RELIABILITY AND SAFETY

Introduction 

Good morning, Chairman Thune, Ranking Member Nelson and Members of the 

Committee on Commerce, Science, and Transportation. The American Car Rental 

Association (ACRA) and Consumers for Auto Reliability and Safety (CARS) respectfully submit this joint written statement as part of the Committee’s hearing entitled 

‘‘Update on the Recalls of Defective Takata Air Bags and NHTSA’s Vehicle Safety 

Efforts.’’ ACRA and CARS ask that this statement be made a part of the official 

record of the hearing. 

ACRA is the national representative for over 98 percent of our Nation’s car rental 

industry. ACRA’s membership is comprised of more than 300 car rental companies, 

including all of the brands you would recognize such as Alamo, Avis, Budget, Dollar, 

Enterprise, Hertz, National and Thrifty. ACRA also has as members many mid-size, 

regional car rental companies as well as smaller, ‘‘Mom & Pop’’ operators. ACRA 

members have over two million registered vehicles in service, with fleets ranging 

in size from one million cars to ten cars. 

CARS, based in Sacramento, California, is a national award-winning non-profit 

auto safety and consumer advocacy organization dedicated to preventing motor vehicle-related injuries, fatalities and economic losses. CARS has spearheaded promulgation of several Federal motor vehicle safety standards, and successfully advocated 

for numerous landmark bills signed into law by Governors from both major parties. 

CARS has been working to enact safe rental car legislation in close collaboration 

with Cally Houck, whose two daughters were killed in a crash caused by a safety 

defect in an unrepaired rental vehicle that was under a safety recall. 

ACRA and CARS applaud this Committee for its continued interest in the Takata 

air bag and other recent automobile recalls. We have come together in an unusual 

partnership of an industry trade group and a consumer safety organization to urge 

Congress to pass the ‘‘Raechel and Jacqueline Houck Safe Rental Car Act,’’ which 

was recently introduced as bipartisan legislation in the House and Senate and has 

been referred to this Committee. We believe that passing this bipartisan bill is one 

important step that Congress can and should take immediately to help get unsafe 

recalled vehicles off the roads. 

The Car Rental Industry and Consumer Safety 

In 2004, Raechel and Jacqueline Houck were killed by a rental car that had been 

recalled due to a defective steering component that was prone to causing an underhood fire and a loss of steering. The car had been rented to them prior to being repaired. The legislation named in their memory, the ‘‘Raechel and Jacqueline Houck 

Safe Rental Car Act’’ (S. 1173/H.R. 2198), was introduced in the House and the Senate on May 1, 2015. The Senate bill is authored by Senators Charles Schumer (DVerDate Nov 24 2008 08:11 May 04, 2016 Jkt 075679 PO 00000 Frm 00069 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\99955.TXT JACKIE
66 

NY) and Barbara Boxer (D–CA), and co-sponsored by Commerce Committee Ranking Member Nelson (D–FL) and by Committee members Senators Claire McCaskill 

(D–MO) and Richard Blumenthal (D–CT). The House bill is sponsored by Representatives. Lois Capps (D–CA), Walter Jones (R–NC), G.K. Butterfield (D–NC) and Jan 

Schakowsky (D–IL). 

The Safe Rental Car Act would prohibit rental companies from renting or selling 

cars subject to a Federal safety recall unless they have been repaired. The only exception to this rule would be if the manufacturer identified an interim measure that 

could be taken while the permanent repair was being developed that would eliminate the risk. Once the permanent repair becomes available, however, the car must 

be grounded until the repair is made. 

ACRA and CARS worked very hard to develop a legislative proposal that is supported by consumer safety organizations and the rental car industry. The bill fairly 

balances the public’s interest in safety with the rental car industry’s business model. 

It represents a reasoned, rational compromise that is effective, and also workable, 

given the realities of the auto rental marketplace. 

From the industry’s point of view, properly maintained vehicles in the rental industry are paramount. It’s about trust—between customers and the individual businesses of ACRA members. Customers should have confidence that their rental is not 

the subject of a safety recall and the legislation provides that confidence. 

From a consumer safety point of view, it is just common sense that rental cars 

subject to safety recalls should be repaired before they are put into the hands of 

consumers and their families. People who are renting vehicles need them right 

away, for a business trip, vacation or sometimes in an emergency. There is no time 

to take a rental car to get repaired. And consumers expect that the car they are 

renting is safe. Most people are shocked to learn that it isn’t already illegal, under 

Federal law, to rent out an unrepaired recalled vehicle. 

Important Safety Provisions of S. 1173/H.R. 2198 

• Timing of Notice and Grounding 

S. 1173/H.R. 2198 define the time-frame in which rental companies need to 

ground the vehicles after receiving the safety recall notice. There is a period of 

time the companies need in order to receive the notice and successfully lock 

down the appropriate vehicles. The bills call for the vehicles to be grounded as 

soon as practicable, or within 24 hours of receiving the safety recall notice. In 

the situation of a particularly large recall—one that affects more than 5,000 vehicles for one company, the lock down time-frame is 48 hours. 

• Interim Remedy 

The only exception under S. 1173/H.R. 2198 to the ‘‘do not rent’’ requirement 

is when the manufacturer has issued a safety recall and has not developed the 

permanent repair, but offers a temporary fix—or interim remedy—that eliminates the safety risk. If the rental car company performs the interim remedy, 

then the car may continue to be rented. Once the permanent repair is offered 

by the manufacturer, the vehicle must be pulled from service and permanently 

repaired before being re-rented. 

• Car Sales From Rental Fleets 

The American car rental industry is the largest single purchaser of cars from 

domestic and foreign car manufacturers every year. The industry, in turn, sells 

a large number of cars each year through retail and wholesale channels. S. 

1173/H.R. 2198 require that rental car companies permanently repair any safety recall to any vehicle prior to selling that vehicle—either through retail or 

wholesale markets. The only exception to this requirement is when a vehicle 

has been so severely damaged that it will only be sold for parts, the rental company does not need to perform the recall work. 

Federal versus State Role 

This is a critical national issue and deserves a national solution. The motor vehicle safety recall process is overseen by the National Highway Traffic and Safety Administration (NHTSA) and has its origins in the Federal Motor Vehicle Safety Act, 

originally enacted in 1966. Therefore, ACRA and CARS believe strongly that major 

changes to rental vehicle safety recall procedures should be made by Congress, rather than individual states. Rental cars are an integral part of interstate commerce 

and car rental customers cross state borders in rental vehicles at will and with the 

blessing of the renting companies. 

CARS agreed with the rental car companies to join together in support of this legislation in order to create a uniform Federal standard, rather than pursuing legislaVerDate Nov 24 2008 08:11 May 04, 2016 Jkt 075679 PO 00000 Frm 00070 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\99955.TXT JACKIE
67 

tion on a state-by–state basis. California Senator Bill Monning, who represents the 

district where the tragic crash occurred that claimed the lives of Raechel and Jacqueline Houck, agreed to forestall pursuit of state legislation he authored beginning 

in 2010, in order to allow Congress time to address the problem nationally. 

As attention to vehicle safety recalls remains squarely in the public spotlight, policy makers at the local, state and Federal level are understandably eager to address 

safety concerns. There have been several initiatives at various levels of government 

to particularly address safety recalls concerning the rental industry. No two proposals are the same. ACRA and CARS believe a patchwork of state and local laws 

would be disruptive to consumers and the car rental industry since rental cars regularly are rented in one state and driven and left in another. In addition, these state 

and local proposals create challenges because each attempts to address a regulatory 

process that is controlled and overseen by a Federal agency (NHTSA). ACRA and 

CARS are united in our conviction that rental car safety should be addressed on the 

Federal level. 

Conclusion 

As the supporters of S. 1173 and H.R. 2198 continue to talk to members of Congress and their staff in support of this legislation, ACRA members are often asked 

why the car rental industry is willing to accept new Federal regulation of the industry’s practices. The response to that is easy. After listening to customers, ACRA engaged and became part of the process. The end result is a proposal that will provide 

car rental customers additional assurance that the vehicles they rent are safe and 

provides the car rental industry with a uniform Federal standard across the country. 

ACRA and CARS urge Congress to enact this bill, named for Raechel and Jacqueline. It is beyond your power to bring them back to life, but the fate of others 

who rent vehicles to visit their parents, take a vacation, or go on a business trip— 

or share the roads with them—rests squarely in your hands. 

As a first step toward enactment, we respectfully request that this Committee 

hold a hearing on the Raechel and Jacqueline Houck Safe Rental Car Act, to hear 

first-hand from the stakeholders why now is the time to pass this critical safety legislation. 

Thank you for providing ACRA and CARS with the opportunity to submit this 

statement. 

Senator MCCASKILL. I now want to go to this audit. And my colleagues are patient with me because I am an audit weirdo. I used 

to be an auditor, so I read this stuff. And Mr. Scovel knows that 

I am somebody who consumes these things. 

This audit report is one of the worst I have ever seen, in terms 

of a government agency. And the reason it is so bad—I agree, Mr. 

Scovel, this isn’t about resources; this is about blatant, incompetent 

mismanagement, Mr. Rosekind. 

I mean, let’s just go through one of many shortcomings, and this 

is one that just jumped out at me: when to open an investigation. 

Now, if NHTSA isn’t clear about when an investigation is to be 

opened, we might as well shut it down. 

The Inspector General found there are three factors to be considered about an investigation: rate of consumer complaints, severity 

of potential safety issues, and identification of root cause. 

Now, here is the scary part. Based on the interviews the Inspector General did, there is disagreement within your agency over 

when an investigation can even be opened. The General Counsel 

said severity must be established for all cases, along with frequency and root causes. The ODI Defects Assessment Division 

Chief says all three should be met. The ODI’s Director does not 

think a root cause is necessary and prefers a focus on safety consequences. And the ODI’s two investigative chiefs agree that a root 

cause is not necessary. 

68 

So you have key personnel within your agency that aren’t even 

on the same page about when an investigation should occur. I assume that you are getting busy on this as a baby step before you 

get at all the other problems that are in this problem. 

Mr. ROSEKIND. There are actually 44 distinct actions that we are 

taking. That is one of them. Those people are now in the same 

room determining what those threshold and criteria should be. 

Senator MCCASKILL. Do you believe that everyone that works 

there knows what their authorities are? Do you believe that there 

is a clear understanding about what the investigative authorities 

are at NHTSA? 

Mr. ROSEKIND. I think the people that have the specific authorities assigned to them are aware of those, but you have just highlighted where those lines have been blurred and clarifications are 

needed. 

Senator MCCASKILL. Well, on average, only four times a year 

over the past 4 years has ODI even requested underlying documentation for death and injury reports. Four times a year. That, 

to me, is stunning. 

And although you have the authority to inspect manufacturers’ 

records for compliance with early warning requirements, NHTSA 

officials told the IG the agency has never used this authority. 

Never used the authority to inspect manufacturers’ records for 

compliance with early warning requirements. 

Listen, I think you are doing your best. I think you understand 

the severity of the situation before you. But I was shocked when 

I read this IG report how bad it was. I knew it was bad when the 

Acting Director before you didn’t even know you had subpoena 

power. I mean, we discovered that in a previous hearing. 

So we are going to be watching very carefully, Mr. Rosekind, the 

kind of work you do immediately. 

And I disagree with my colleague; I am not about to give you 

more money until I see meaningful progress on reforming the internal processes in this organization. You can’t start throwing money 

until you have a system in place that is going to make this agency 

function like it is supposed to. 

Thank you, Mr. Scovel, for your work. I think it is very illuminating. 

Thank you for working so hard since you have been there. It is 

not fair to blame you for all this. I think you are trying as hard 

as you can to get the place shaped up, but we have a long way to 

go. 

And I would certainly hope, Mr. Chairman, that we would do a 

follow-up every 4 to 6 months to see how they are doing on the IG’s 

list. Because I think the driving public deserves so much better 

from the cop on the beat. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Yep. Thank you, Senator McCaskill. You bet. 

Senator Klobuchar? 

STATEMENT OF HON. AMY KLOBUCHAR, 

U.S. SENATOR FROM MINNESOTA 

Senator KLOBUCHAR. Thank you, Mr. Chairman, for holding this 

hearing. I think it is incredibly important that we follow up and 

69 

have hearings like this after something major has happened, like 

we saw with Takata, with GM. 

Last November, after evidence emerged that Takata were susceptible to ruptures in regions outside of high-humidity areas, I called 

on Takata to expand the recall nationally. Last month, they finally 

complied and expanded the recall nationwide for certain types of 

driver- and passenger-side airbags. 

One of the individuals affected by a Takata airbag was Shashi 

Chopra from North Oaks, Minnesota. She is now permanently 

blind. She was simply a passenger in a car that wasn’t even going 

very fast that was in what we would consider a minor fender bender and is now permanently blind. 

Mr. Rosekind, what tools does NHTSA need to compel companies 

to act sooner? 

Mr. ROSEKIND. Part of what we are looking at, besides resources 

related to personnel, are authorities. 

So other safety agencies within DOT have imminent hazard. 

What does that mean? If a hazard was identified, we would have 

been able to take those Takata airbags off the streets much sooner 

than what happened in this situation. 

So there are a variety of authorities—— 

Senator KLOBUCHAR. And would that be, then, established by 

law? Is that what you are saying you—— 

Mr. ROSEKIND. Yes. Those are authorities that you, Congress, 

have to provide to the agency. 

Senator KLOBUCHAR. And were the daily civil penalties at 

NHTSA levied against Takata for failing to fully respond to 

NHTSA’s special orders helpful in getting them to act? 

Mr. ROSEKIND. Yes. And I think what you are pointing out is we were able to go to $14,000 a day, which was the maximum, but on 

our list of authorities that we are looking for in GROW AMERICA, 

that is another one. Our maximum penalty is $35 million. We are 

looking for $300 million. 

Senator KLOBUCHAR. OK. Very good. 

Last month, NHTSA filed a Notice of Intent to open a coordinated remedy program for the replacement of defective Takata airbag inflators in order to consider whether and, if so, how NHTSA 

will exercise its authority to organize and prioritize the recall and 

remedy programs. 

How is NHTSA approaching the replacement of these airbags to 

ensure that vehicles that are most at risk are replaced first? 

Mr. ROSEKIND. That is why we have just sent out information 

letters to all of the 11 manufacturers, the 7 suppliers, and are collecting information so we can put a plan together to do just that. 

People have talked about an accelerated remedy. This is more 

than just making it go faster. It means coordinating and 

prioritizing to make sure people in the areas that have been identified for risk, which have to do with age, certain geography, driver 

side—those people need to make sure they are replaced as soon as 

possible. 

Senator KLOBUCHAR. OK. 

Switching to the GM issue, which you are also aware of, we had 

a case of Natasha Weigel from Albert Lea, Minnesota, riding with 

her two friends in a 2005 Chevy Cobalt on a Wisconsin country 

70 

road. Without warning, the car’s electrical power went out. The car 

barreled ahead at 71 miles per hour. Natasha and another passenger were killed when it ran into a tree. 

The report found that Wisconsin State Trooper, Keith Young, 

conducted an investigation into the crash that clearly made that 

link—this is a state trooper in Wisconsin—between the defective ignition switch and the failure of the airbag to deploy. It cracked the 

code that evaded GM and NHTSA for years. 

This is what he wrote: ‘‘The two front seat airbags did not deploy. It appears the ignition switch had somehow been turned from 

the ‘run’ position to ‘accessory’ prior to the collision with the trees.’’ 

We know this is all troubling, and in December I asked you what 

concrete changes you would implement at NHTSA to improve the 

consumer complaint process. I would like to know what systems 

NHTSA has put in place to ensure that if the Office of Defect Investigation investigators are in possession of critical information, 

like Trooper Young’s report, I would like some assurance that they 

are now acting. 

Mr. ROSEKIND. And I am going to actually start, though, by acknowledging this committee, whether it is your opening statement 

mentioning safercar.gov or the fact that each of you talk about one 

of the tragedies, you put a face to the tragedies that are going on, 

it is so critical for people—— 

Senator KLOBUCHAR. Thank you. 

Mr. ROSEKIND.—to know that these are real people that are 

being affected. So thank you all for doing that. 

And I would say specifically, we did talk about this in my confirmation hearing, and we have new systems that are already in 

place, such as a case management system that allows our crash investigators, as well as the screeners and the panels, to look at this 

information from multiple sources all in one place. It is an attempt 

to basically connect those dots so the people who are working on 

this have all available information. 

And I will just—— 

Senator KLOBUCHAR. Yes. Because I know, like, there were about 

260 complaints over an 11-year period from consumers that the 

GM vehicle had turned off while they were driving. And somehow, 

over those 11 years, those dots weren’t connected. 

So, as you said, there has been a change. But how does that 

change really work in effect? 

Mr. ROSEKIND. We are talking about panels and screeners that 

now have access to all the information. Previously, there could be 

an update to a piece of information and the person responsible for 

that case didn’t even get an alert that there had been updated information. 

So now you have more data and making sure, every time there 

is new data, that individual who is responsible gets all the information in one place. 

Senator KLOBUCHAR. OK. Very good. 

Well, thank you very much. I will probably have some more questions for the record. 

But thank you, again, Senator Thune and Senator Nelson. 

The CHAIRMAN. Thank you, Senator Klobuchar. 

71 

And next up is the Ranking Member on the Subcommittee on 

Consumer Protection, somebody who, like Senator Nelson, has been 

very involved on these issues. So I would like to recognize Senator 

Blumenthal. 

STATEMENT OF HON. RICHARD BLUMENTHAL, 

U.S. SENATOR FROM CONNECTICUT 

Senator BLUMENTHAL. Thank you very much, Mr. Chairman. I 

want to express my appreciation to you for having this hearing 

today, which I know reflects your own interest and caring about 

this subject. 

And to my distinguished colleague from Florida, thank you for 

your very eloquent and powerful statement. 

I want to pursue some of the lines that have been raised already, 

lines of questioning, that reflect the real-life consequences, as you 

have just said, Mr. Rosekind. 

Just to show you, first, one of the airbags that actually bears the 

marks of the, in effect, exploding shreds of metal that so injured 

eight people that they were killed and many others. 

But the real fault is not with the airbag. There is no blood on 

the airbag. Some may say, legitimately, there is blood on the hands 

of Takata executives, who concealed and covered up the devastating, deadly effects of these explosions. 

The fault is really with this device, the inflator, because it contained a substance that caused this explosion. Ammonium nitrate, 

when moistened, became explosive. And the question for Takata 

today is whether these devices are any safer than they were when 

they killed eight people. And the evidence may well show that 

these inflators are as dangerous today as they were when Takata 

first learned that they were potential killers some years ago, as 

early as 2004 and 2006, that they are as dangerous today and 

should be completely revamped and revised in their basic design 

and structure, which Takata has not yet done. 

The number of deaths reported so far is eight. I feel that that 

number is a lot like the number 13 that was first acknowledged by 

GM as caused by its defective ignition switch. We now know that 

that number is at least 117 because of the findings of the compensation fund that GM established only after I and others on this 

committee called for them to do it. That number of eight may well 

grow. It may be only the tiny fractional tip of the iceberg of death 

that was caused by these exploding airbags. 

And so I believe, as has been stated, that this report is a searing, 

devastating indictment of an agency that was responsible for protecting the public. But let’s not forget the responsibility of corporate executives, who could have and should have fully disclosed 

and then protected their customers from these devastatingly deadly 

devices. 

I think that that record of cover-up and concealment is one of the 

low points in corporate conduct, and it represents the need to 

strengthen not only the agency that you had, Mr. Rosekind—we 

need to strengthen that agency, not strangle it. We need to provide 

more resources and funds, not cut. But a cop is only as good as the 

legal tools that he has. A cop is only as good as the laws that are 

enforced. 

72 

And so I have proposed, along with my colleagues Senator Markey, Senator Nelson, a collection of new laws that will strengthen 

your legal tools. Because, ultimately, we can use all the rhetoric we 

want in this room, in press conferences, in public forums, but the 

rhetoric is no good without real action and institutional change and 

new laws that give you the tools you need. 

So, for example, eliminating the caps on penalties—not just raising them, but eliminating the caps on penalties for nondisclosure; 

the Early Warning Reporting Act that will give you the mandate 

to establish a database that is useful to consumers so they can take 

action to protect themselves; the Automaker Accountability Act 

that I have proposed; as well as criminal penalties imposed not just 

on the companies but on the corporate executives when they cover 

up or conceal defects. 

And, as my colleague Senator McCaskill has already said, rental 

car companies need to be held accountable, but also used car dealers. At least one of these Takata deaths occurred as a result of a 

used car. And very often the manufacturers and the dealers simply 

can’t find the present owner of a car because he or she has bought 

it as a used car. 

Automobile manufacturers and new car dealers are required to 

repair safety recalls before selling recalled vehicles under current 

law, but there is no requirement that used car dealers fix any outstanding safety defects before selling a used car. And this gap in 

consumer protection puts people at risk. 

So I think there are a number of preventive acts that can be 

taken, and not the least of them is that any settlements, such as 

happened with the GM ignition defect, be disclosed fully. Secret 

settlements ought to be banned. That is why I have proposed the 

Sunshine in Litigation Act with my colleague Senator Graham, and 

I hope to revive it again this challenge. 

I want to know from you whether you will join me, Mr. Rosekind, 

in seeking these basic, fundamental reforms—— 

Mr. ROSEKIND. I am going to start—— 

Senator BLUMENTHAL.—that will be important going forward. We 

can allot and blame as much as we wish for the failures of the past, 

and there have been deadly failures. But repairing this system and 

reforming it going forward ought to be our concern. And it is not 

just oversight; it is addressing these problems with new legislation, 

giving you new tools, and your successors, so that there is real institutional change. 

Mr. ROSEKIND. And I just wanted to start by saying thank you, 

because, yes, what you have seen over the last months is NHTSA’s 

willingness to use all authorities and tools available to us to get action. If we don’t have those authorities or even the maximum is ineffective, we can’t do our job. So we will support and provide any 

technical and other assistance to help with those new authorities. 

Senator BLUMENTHAL. And you need more resources, do you not? 

Mr. ROSEKIND. Absolutely. 

Senator BLUMENTHAL. In fact, the FAA, I think, has something 

like 30 times your budget and 6,000 employees as compared to your 

90. Is that not a glaring deficiency? Does that not reflect a lack of 

investment in your agency and in the safety of our roads and drivers? 

73 

Mr. ROSEKIND. And you are citing a chart that is in our workforce assessment that makes that comparison. 

So, with under 500 deaths in major aviation accidents, they have 

over 6,000 safety professionals working at that number. In the rail 

industry, they have under 10, and they have close to 700 professionals working on that. And we have, in 2013, 32,719 lives lost on 

our roadways, and at NHTSA we have 90 people dealing with 

those. 

Senator BLUMENTHAL. If our airplanes and airspace were as dangerous as our cars and our roads, corporate officials would be indicted and there would be sweeping changes in the airline industry. The lack of dramatic crashes is perhaps what enables the dripby-drip, crash-by-crash tragedies that have been detailed here. And 

this Nation has to make the kind of investment in your agency 

that, laudably, it has made in the safety of our airspace. 

Thank you. 

The CHAIRMAN. I have Senator Markey, followed by Peters, followed by Heller, followed by Daines. 

We have a vote going on, so if you want to proceed. And, if you 

can, I would like to wrap this first panel up as quickly as possible. 

I will go over and vote, and if we get to the end of the people who 

want to ask questions, gavel it out, recess it, and we will come back 

and pick up as soon as we get through with the vote. 

Senator Markey? 

STATEMENT OF HON. EDWARD MARKEY, 

U.S. SENATOR FROM MASSACHUSETTS 

Senator MARKEY. Thank you, Mr. Chairman, very much. 

Dr. Rosekind, Senator Blumenthal and I have a bill, the Early 

Warning Reporting System Improvement Act, that requires automakers to automatically provide more documents about potentially 

defective cars to NHTSA and requires NHTSA to then make more 

of that information available to the public so that it can protect 

itself. 

And we can’t get back the 117 people whose lives were lost to the 

GM ignition switch defect; we can’t get back the 8 people whose 

lives were taken by exploding Takata airbags. 

But, Dr. Rosekind, you do have right now the authority to implement many of the changes that the Markey-Blumenthal early 

warning reporting bill requires. You can take permanent measures, 

even without a new law, to put information about fatal defects into 

the hands of the public in case NHTSA’s analysts fail to spot the 

next ignition switch or exploding airbag defects. You can look at 

the families who lost their parents, children, spouses, or siblings 

because of these defects, and you can tell them that you did everything you could to make sure that their lives weren’t lost in vain. 

Dr. Rosekind, will you call for a NHTSA rulemaking to require 

automakers to provide the early warning documents that alert 

them to potentially fatal defects to NHTSA and to have NHTSA 

then make this information public? 

Mr. ROSEKIND. The agency and I will do everything we can with 

the transparency of the agency to try and make that information 

available. Numerous examples already raised; if the information 

had been available, that could have helped to save lives. 

74 

And our interest will be to look at that and make sure that our 

current legal requirements related to privacy, confidentiality, 

wouldn’t actually impede that objective. 

Senator MARKEY. Will you do a rulemaking, Dr. Rosekind, in 

order to make sure that there is a formalized process to ensure 

that the information goes to your agency and then the agency discloses it to the public so that they can protect themselves? 

Mr. ROSEKIND. And I will commit to looking at what shape that 

could look like, knowing what our current legal obligations are for 

confidentiality. 

Just very simply, the manufacturers have that data. They don’t 

have the Federal restrictions we do related to confidentiality and 

privacy, for example. They could post that now—— 

Senator MARKEY. Will you do a rulemaking? Will you do a rulemaking, Doctor, consistent with the Privacy Act and confidential 

proprietary information to ensure through the rulemaking that any 

information which you can make public will be made public and 

that the auto industry will be forced to give you that information? 

Will you conduct a rulemaking to achieve that goal? 

Mr. ROSEKIND. I will determine whether—whatever we can do for 

transparency, I will determine whether or not a rulemaking is even 

needed. 

Senator MARKEY. Well, so you are going to—so you will do everything, then, that is allowed by law to ensure that the auto industry 

will provide you with the information about defects and that 

NHTSA will then release that information? You will do everything 

that is allowed by existing law? 

Mr. ROSEKIND. That is what we will look into and make sure 

that we can provide that transparency, yes. 

Senator MARKEY. And you are saying that you do not need a 

rulemaking in order to accomplish that goal? 

Mr. ROSEKIND. And that is what I have to look at, what those 

legal conflicts are. So if it is not—— 

Senator MARKEY. Will you do a rulemaking if one is required? 

After you determine the scope of your authority under the existing 

rules, will you do a rulemaking if it is necessary? 

Mr. ROSEKIND. If the evaluation shows a rulemaking would be 

useful for transparency, yes. 

Senator MARKEY. OK. Well, I think that is very important. I 

think that will really give the information to the public which they 

need. If people can go online to buy a car, they should be able to 

go online in order to determine if that car has a defect which could 

harm a family member. 

So the sooner you put it online, the sooner you put that information up, the sooner you get that information out there is the more 

accountable the industry is going to be. They will know that, that 

the consumers will be king, the consumers will be protecting their 

family, the consumers will be able to ensure that any successor 

NHTSA is accountable and ensuring that that information is made 

public. 

Now, Senator Blumenthal and I have another bill, and that bill 

is one that says that a used car that is now purchased by someone 

may have a recall that actually ensures that there is a free replacement part but that the person who purchased the used car really 

75 

doesn’t know about it. So our bill would require that when that 

new owner registers their cars that they are made aware of the 

safety defects and that those repairs are made. 

Would you support that kind of legislation, Dr. Rosekind? 

Mr. ROSEKIND. DMV is a very important touch point to get those 

people informed. GROW AMERICA talks about this, because, at 

this point, there is no sense yet of the technology to do that, the 

cost, the procedures, et cetera, and making sure that the consumers basically don’t have any negative effects from a defect created by a manufacturer. 

So, absolutely, DMVs could be a touch point that could be used. 

And in GROW AMERICA, we are suggesting pilot programs to 

work that technology, the cost procedures out to figure out how it 

could go national. 

Senator MARKEY. OK. Thank you. I appreciate that. 

Senator HELLER [presiding]. Thank you. 

I am doing the heavy lifting right now with the gavel. 

Senator Peters? 

STATEMENT OF HON. GARY PETERS, 

U.S. SENATOR FROM MICHIGAN 

Senator PETERS. Thank you. 

And appreciate both the panelists here today and your testimony. 

Administrator Rosekind, I hear you when you say that NHTSA 

needs help. And if the agency is going to be able to deliver effective 

oversight for vehicle safety, we in Congress here, need to consider 

increasing your funding, as well as having stable funding, so you 

can modernize your crash data collection systems, hire additional 

electronic and technical experts, and enhance the Office of Defects 

Investigation. 

But before that happens, I am sure you know very well that you 

must prove that your agency can actually do this effectively and 

have in place the procedures that can ensure the work is done in 

a timely manner. And you know as well as anybody, time is of the 

essence. The more time that elapses oftentimes means more deaths 

as a result of problems. 

Now, I personally see all the time in Michigan the incredible 

progress that the auto industry is making to develop new technologies focused on collision avoidance and mitigation. These new 

developments, without question, are going to make traveling on our 

Nation’s roads much safer, smarter, more energy-efficient, and at 

the same time less congested. 

And Congress, I believe, needs to do its part to promote these polices that will help us usher in this new age and this new era of 

safety and mobility. And the first step should be to ensure that 

NHTSA has the resources to not only address the major issues that 

it is facing today, and the one in particular with airbags, but also 

encourage the development of these new technologies that have the 

potential to save thousands of lives in the future. 

But it will be difficult to secure this funding and the ability to 

move this incredible technology forward if folks like myself and fellow Members of Congress are not confident that the resources are 

going to be deployed in an effective manner. And, as the IG report 

has made clear, there is a considerable amount of work to do. 

76 

Administrator Rosekind, this recall you are involved in right now 

is of unprecedented scale. NHTSA is courting this recall, and you 

have introduced a number of programs and initiatives in order to 

do this. You have told our committee about the 17 recommendations of the IG, which reiterate many of the findings of your own 

internal report, and about how you anticipate the agency being 

able to implement these recommendations before the end of the 

year. 

Sir, can you say that NHTSA can adequately coordinate this recall that you are in the middle of right now and implement these 

reforms without more funding from Congress? 

Mr. ROSEKIND. We already have that plan in place, that we have 

to effect this recall with current resources. That is the plan. 

Senator PETERS. And that will be an opportunity for us to see the 

effectiveness of your agency, to be able to use these resources, to 

be able to do this in an expedited way? 

Mr. ROSEKIND. Correct. 

Senator PETERS. To Mr. Scovel, you have identified certainly an 

alarming lack of transparency and accountability; a severely deficient workforce, both in volume and technical expertise; and, as I 

mentioned earlier and you have mentioned here, you have delivered 17 recommendations, and NHTSA has concurred. 

You have provided detailed action steps taken to make changes, 

but based on, now, you have intimate knowledge of this agency as 

a result of your work, do you believe that this agency is capable 

of making these changes? And how long do you think it will take? 

Mr. SCOVEL. Thank you, Senator Peters. 

I would hold the Administrator to his word. When he responded 

to our audit report, he indicated not only concurrence but a very 

aggressive intent to make good on all of those in a relatively short 

timeframe, in our experience dealing with similar reports in other 

modes of the Department of Transportation. 

Clearly, the burden is on the agency at this point to make good 

on its promises to reform its processes so that it may then come 

to Congress and back to the American people and say, we are prepared to handle what we have, and, by the way, we may be able 

to do even a better job should, as a policy matter, we be accorded 

more resources. 

But right now, sir, the burden is on the administrator. 

Senator PETERS. And you have set a very aggressive timeline of 

one year. Again, based on your intimate knowledge—and you have 

a lot of experience with a lot of different agencies—is that really 

a realistic timeline? 

Mr. SCOVEL. It is. I would say that is the Administrator’s own 

timeline, which we endorse. We are hopeful. We will birddog these 

recommendations and the implementation of them as carefully as 

we have anything else in our long history of providing oversight for 

the department’s safety regulatory agencies. 

Senator PETERS. Well, I will be with you, working closely. That 

has always been my frustration. When you sometimes get recommendations from the IG, there is lip service but never followthrough, and 1 year turns into 2 years and 3 years. 

And, in the case of the work of this agency, these are people’s 

lives at stake. And we need to have a robust regulator that is able 

77 

to also help us in the auto industry in this country to move to even 

more dramatic safety improvements with some of the V2V and the 

V2I technologies that are coming forward. 

So I look forward to working with both of you gentlemen. Thank 

you so much. 

STATEMENT OF HON. DEAN HELLER, 

U.S. SENATOR FROM NEVADA 

Senator HELLER. Senator Peters, thank you. 

Mr. Rosekind, it looks like you and I are going to have a oneon-one conversation. 

And, Mr. Scovel, it is not because I don’t appreciate your work. 

And I do appreciate both witnesses’ being here. And I don’t think 

I will complete the questioning. It is my understanding that we will 

have more members back after they get back from the floor. If not, 

we will go to recess until they do. 

But I want to talk a little bit about this gap in consumer protection that others are talking about. Last Saturday, I dropped my 

daughter’s car off at the dealership. I usually do most of the work 

myself. My father owned an automotive business. And, anyways, it 

was an independent auto repair service. 

And so the question becomes, if you are the second owner, third 

owner, fourth owner of a particular vehicle. When I went into that 

dealership, does that dealership have an obligation to tell me if or 

not there is a recall on that particular make and model? 

Mr. ROSEKIND. They do not. That is part of our GROW AMERICA authority request, is to get that kind of independent—if you 

go to a new car dealer, they should do that for you automatically—— 

Senator HELLER. OK. But are they obligated to do that? If—— 

Mr. ROSEKIND. No. 

Senator HELLER.—you go to a new car dealership today, are they 

obligated on a service maintenance contract that you might have 

with them to tell you if there is a recall? 

Mr. ROSEKIND. Yes, they should be doing that for you. 

Senator HELLER. But are they obligated and—— 

Mr. ROSEKIND. Yes. 

Senator HELLER.—are they required? 

Mr. ROSEKIND. Yes. 

Senator HELLER. Because I asked, I did ask, and they gave me 

the answer, and I have no reason to question it. But I don’t know 

that I have ever been to a dealership that I have dropped a car off 

that they have told me. And maybe they don’t have to unless you 

have a recall, so I am not putting that into question. 

So you are saying, if I took that vehicle instead, say, to a Jiffy 

Lube, they wouldn’t be obligated to tell me if there was a recall? 

Mr. ROSEKIND. Correct. 

Senator HELLER. Gas station? None of them are responsible; is 

that correct? 

Mr. ROSEKIND. That is correct. 

Senator HELLER. OK. OK. How is that going to change? 

Mr. ROSEKIND. In GROW AMERICA, we have asked to change 

that so that everybody, not just the new car manufacturers but all 

those independents, would also be required to run that check—— 

78 

Senator HELLER. OK. 

Mr. ROSEKIND.—and inform you. 

Senator HELLER. OK. So if your tendency is to bring your car 

into an independent station, what is your alternative, then, to 

know about a recall? What is the alternative? 

Mr. ROSEKIND. What we are recommending is that everybody on 

a regular basis, even weekly, go to safercar.gov and look up your 

VIN number. 

Senator HELLER. All right. So you are an 18-year-old girl; do you 

think weekly they will go to safercar.gov? 

Mr. ROSEKIND. No way. 

Senator HELLER. No way. I guarantee you my daughter wouldn’t. 

So there is the gap. 

How do you protect—and I am a parent, and I know you are a 

parent too. And I hope you had a good Father’s Day. How do you 

protect that child? As a parent that represents everybody here in 

this room, how do you protect that child, knowing that they won’t 

go to safercar.gov? I will, and I will check for her. 

But I guess a better question is, what percentage of America 

even has ever heard of safercar.gov? 

Mr. ROSEKIND. That is a good question. I am going to actually 

find that out, to know about safercar.gov and sort of what its visibility is. 

But we are with you. I think, especially over the last year, there 

is so much discussion about recall fatigue and how much information is out there, do people know where to go; it is a huge problem. 

So one of the things, actually, that we have on our list of actions 

already underway is creating a national campaign. NHTSA is the 

one who runs Click It or Ticket, Drive Sober or Get Pulled Over. 

Senator HELLER. It works, by the way. 

Mr. ROSEKIND. And we want to use that same effect in this to 

go after this issue. Because I am with you. It is great to come here 

and for us to announce safercar.gov, but there are too many people, 

like our kids, that aren’t going to do that. We have to figure out 

how to fill those gaps. 

Senator HELLER. Very good. 

I am going to stop my questioning here, but thank you very 

much for your hard work, both of you. And I am going to go down 

to the floor, but I will turn it over to Senator Daines at this point. 

Thank you very much. 

STATEMENT OF HON. STEVE DAINES, 

U.S. SENATOR FROM MONTANA 

Senator DAINES [presiding]. All right. Thank you, Senator Heller. 

I truly am grateful this committee is highlighting the safety challenges of Takata’s airbags that have killed eight people. However, 

there are other recalls that I believe need attention and further underscores NHTSA’s lack of efficacy. 

Last summer, there was a fire truck, a 2002 International Model 

4800, that’s front axle, actually the ball and socket, seized, and it 

caused the shaft to break, seizing up the left front wheel. It was 

coming down Highway 12, just outside of Helena, Montana. It is 

between my hometown of Bozeman, and I drive this all the time. 

79 

It was during daylight hours. Weather conditions were fine. And 

this fire truck veered into oncoming traffic, and the volunteer fire 

chief in the truck was killed in a very violent head-on collision. And 

there was a family of five, mom and dad and three small children, 

in a pickup that were also killed. 

So when I drive back and forth—in fact, I went by that tragic 

site just days after it happened. You could see the marks coming 

in, the tire marks, in a straightaway where this horrible collision 

occurred. There are six white crosses now standing by the side of 

the highway where that occurred. 

This particular Navistar front driveshaft has been recalled in approximately 500 vehicles, with notifications being mailed this 

month. Now, this accident occurred on June 19 of last year. So the 

notifications went out just in the last 10 days, a year after the accident. 

And it turns out this exact component was a NHTSA-approved 

solution to a previous recall that occurred in 2003. 

With that as background, Dr. Rosekind, the recent OIG report 

frequently makes references to the defects, the lack of process, the 

weak data analysis contained in these reports, which I have looked 

over. They have made 17 recommendations to ODI to improve early 

warning reporting data, improve data verification processes, to institute external reviews, and evaluate staff training needs, amongst 

other recommendations. 

Unfortunately, this is not the first time many of these recommendations have been made. The OIG highlighted similar issues 

and made similar recommendations in 2002, in 2004, in 2011, in 

2014, and now here we are in 2015. 

So my question for Dr. Rosekind is: Navistar declared a safety 

recall 2 months after the accident. They moved quickly with an interim solution. But 12 months after the accident, the final recall 

was being sent and the solution is being executed. 

You mentioned in your testimony it is the automakers’ responsibility to remedy defective components. My question is, why is it 

taking a year? And what are the NHTSA scientists and engineers 

doing to expedite these solutions to mitigate these safety risks to 

all Americans? 

Mr. ROSEKIND. I said this earlier; I don’t think you can say it 

enough. This committee—that story about the tragedy of those 

lives lost can’t be told enough. So we have personalized, added a 

human face to every one of these tragedies. 

What you are highlighting is something we have emphasized. 

Identifying defects is fine. If they are not remedied, you still have 

the risk. And that is what is going on here. And part of the challenge that you were citing is basically making sure in a timely 

manner a correct long-term, permanent solution is in place. 

So I have just learned about this, and you can count on me going 

back to figure out exactly the specifics, even more than what you 

are telling me now, of what happened here to see what is going on. 

Senator DAINES. Yes, I would appreciate that. You know, it is 

also the face of innocence here, with a fire chief—he was returning 

back to Three Forks, Montana. It was a nice summer evening, good 

daylight, in a straightaway. And you see this young couple and 

their kids in a pickup. And it is a road I drive all the time. And 

80 

it was just the innocence of the lives lost, I think, that is so troubling. 

But, importantly, could this have been prevented? That is really 

the question and looking at the process and procedures, the speed 

at which the remedies are put in place. I would greatly appreciate 

you taking a look at that. 

And, you know, part of that is how many times has NHTSA had 

more than one recall on the same vehicle component. And I know 

you are new to the job. I appreciate your leadership. I know you 

have a long to-do list, but I would appreciate you looking into that 

and looking at—again, we have had repeat recalls here—so we can 

prevent these tragedies. 

Since I am the only Senator here right now, I am going to keep 

going with some more questions until I am out of time. 

Mr. Scovel, does the Office of Inspector General maintain stats 

on how often components are recalled more than once? 

Mr. SCOVEL. We do not. We did not include that as part of our 

current audit. We don’t maintain that kind of data base to begin 

with. Our current audit, sir, it, as you know, focused on the preinvestigative phase and not on the recall phase. 

Senator DAINES. Yes. And I might suggest it is something to look 

at, because that is starting to look at the process and the systemic 

challenges that exist today, again, with the goal here being preventing these tragedies from ever happening again. The pain these 

families expierence never goes away. 

NHTSA’s Office of Defects Investigation has had over a decade 

to implement numerous recommendations from your office. What 

do you see the challenge around why it is taking so long to implement? 

Mr. SCOVEL. Senator, some of those recommendations were tailored for the circumstances and the unique programs that we were 

examining at the time. For instance, the 2002 and 2004 reports 

that you referenced were examining NHTSA’s ability to implement 

requirements of the newly enacted TREAD Act. In 2011, we were 

looking at the investigative phase, primarily, of NHTSA’s operations. In the current audit, we were looking at the pre-investigative phase. 

So I don’t want to sound like I am overly parsing this, because 

we are trying to dissect each and every phase of NHTSA’s safety 

operation, with the idea of being able to commend what is going 

on right, find out what is going on wrong, and make effective recommendations to improve. 

Our recommendations in this case, all concurred in by the agency. Very aggressive timeline for their implementation. We believe 

they can all be implemented, in fact, with current resources. And 

I think that is the agency’s intent. Most commendable on their 

part. 

What Dr. Rosekind is attempting to do, in our estimation, is to 

change the organizational culture of NHTSA, at least the defects 

investigation and resolution part of the operation. 

Senator DAINES. Yes. I spent 28 years in business before I took 

this different day job here on Capitol Hill. And they always said 

it is what you inspect, not what you expect—— 

Mr. SCOVEL. Right. 

81 

Senator DAINES.—and the importance of clear metrics. And I 

think there should be one, it looks like, on just perhaps its speed, 

in terms of how quickly are we going from an accident to action in 

the field here that is going to correct the defect. 

Mr. SCOVEL. Right. 

Senator DAINES. It seemed like, when Navistar was in the field 

within 2 months, why did it take the Federal agency a year? 

Mr. SCOVEL. Right. 

Senator DAINES. You know, there is a 10-month gap there. 

Mr. SCOVEL. Yes. And I think you are talking about safety steps 

that can be taken by way of corrective action or by way of recall. 

Remember, again, if you will, our current audit focused on the 

pre-investigative phase. We did get to the timing element of that 

part of NHTSA’s effort. Our audit report, not so much our statement for today’s hearing, but our audit report released at the end 

of last week, did discuss at some length the length of time it took 

for an investigative proposal to be evaluated, assessed, and decided 

within the Office of Defects Investigation. 

That is a key step, of course, because you are never going to get 

to a possible corrective action or a recall, at least in a position to 

be influenced by NHTSA, unless you get through this investigation 

proposal, evaluation, and decision stage. 

We found one instance where an investigative proposal languished 5 months. This was very recently, within the last year. Another one had been on the books for more than a year without resolution. There is a circuitous pattern for evaluation and discussion 

within the Office of Defects Investigation of some of these investigative proposals. 

But, again, to pick up on Dr. Rosekind’s opening remarks at this 

point, question assumptions. One of the assumptions that desperately must be questioned is how can we speed up the decision 

loop so that we can get to the decision to investigate sooner and 

hopefully, upon investigation, get to a decision on corrective action 

sooner. 

Senator DAINES. Right. And I appreciate, sir, on the balance of 

ensuring we are thorough and we have properly identified the 

problem and how to mitigate the risk. 

Mr. SCOVEL. Right. 

Senator DAINES. It just seems as though we are seeing a pretty 

big gap there. And I appreciate your efforts, as well, to change the 

culture, to look at ways we can move faster. 

And the Senator and the Chairman have just returned here. 

Mr. Chairman, I am going to turn it back to you. 

But thank you for your thoughtful comments. 

The CHAIRMAN [presiding]. Thank you to the Senator from Montana for presiding here while we get through the vote. 

And I think that wraps up the first panel. So thank you, Mr. 

Rosekind and Mr. Scovel, for your time and for your testimony and 

for your responses to our questions. 

I want to invite the second panel to come up, and we will get 

going with that. 

We want to welcome our second panel of witnesses this morning. 

Thank you for being here, and for your testimony. 

82 

I am going to hand it off for opening statements. We have with 

us today Mr. Kevin Kennedy, who is Executive Vice President of 

North America for Takata; Mr. Scott Kunselman, who is the Senior 

Vice President, Vehicle Safety and Regulatory Compliance, with 

Chrysler, formerly known as Chrysler Group; and Mr. Rick 

Schostek, who is the Executive Vice President for Honda North 

America. 

So I am going to ask, if we could, on my left and your right, Mr. 

Kennedy, if you will please proceed with your testimony, and then 

we will go from there. And, if you can, confine it as close to 5 minutes as possible, and we will take it from there. 

Mr. Kennedy? 

STATEMENT OF KEVIN M. KENNEDY, 

EXECUTIVE VICE PRESIDENT OF NORTH AMERICA, 

TK HOLDINGS INC. (‘‘TAKATA’’) 

Mr. KENNEDY. Chairman Thune, Ranking Member Nelson, and 

distinguished members of the Committee, I am honored to be here 

on behalf of Takata and our employees throughout the United 

States. 

For Takata, safety is the core of what we do and who we are. We 

are proud that Takata airbags have saved thousands of lives and 

prevented serious injuries in hundreds of thousands of accidents. 

It is unacceptable to us for even one of our products to fail to perform as intended. We deeply regret each instance in which someone 

has been injured or killed. We will do everything in our power to 

address the safety concerns raised by airbag ruptures. Our chairman met twice with Administrator Rosekind and made that commitment personally. 

That is why, after months of testing and extensive analysis, we 

voluntarily agreed with NHTSA to take broad action, in conjunction with the automakers, to respond to your concerns and those 

of the public. Our agreement with NHTSA contemplates dramatically expanded recalls, including national recalls, going well beyond 

the scope of the risk suggested by the science and the testing. 

Based on more than 57,000 tests of returned inflators in years 

of research by leading experts from around the world, our best current judgment is that the rupture issues are related to long-term 

exposure over many years to persistent conditions of high heat and 

high absolute humidity. And for some inflators, these issues may 

also involve potential manufacturing and vehicle-specific factors. 

Most field ruptures have involved older inflators in the region of 

high heat and absolute humidity. And all analysis to date indicates 

that the potential for rupture is limited to an extremely small fraction of inflators. 

That is why Takata’s filings state that a safety-related defect 

may arise in some of the inflators. Not all of the inflators covered 

by the proposed recalls are defective. But even one rupture is too 

many, and so our remedy program is much broader. 

Most of the injuries and all of the fatalities in the U.S. involve 

driver-side airbag inflators that feature the batwing-shaped propellant wafers. We have agreed to replace all of the batwing driver inflators from the start of production through the end of production 

in any vehicle registered anywhere in the United States. 

83 

These recalls will proceed in stages, and the final stage will include the replacement of batwing inflators previously installed as 

remedy parts. 

We are ceasing production of the batwing inflators altogether. 

There have been far fewer field ruptures involving passenger-side 

airbags. Nevertheless, our agreement with NHTSA also contemplates significantly expanded recalls for passenger airbag inflators. 

To support these recalls, our total production of replacement kits 

for North America will soon reach 1 million per month. We have 

augmented our capacity to produce replacement kits by including 

inflators made by other suppliers. 

We are investing in innovation and working with our automaker 

customers to develop a range of new inflator products. At the same 

time, Takata continues to serve its customers by producing airbag 

inflators that use phase-stabilized ammonium nitrate propellant, 

which has distinct safety and efficiency benefits over alternative 

propellants. We have full confidence in the safety of these products. 

We are using various technologies in response to the recalls. The 

process of qualifying new products takes time, and for certain types 

of airbags and for certain vehicle models, the best solution today 

is to use existing technologies in place of the original unit. We 

agree with NHTSA that it is absolutely the right response to public 

safety concerns not to wait but to replace an older unit with a new 

inflator. Doing so provides an important safety benefit. 

We have agreed with NHTSA to do ongoing testing to verify the 

safety and the service life of these remedy parts. If they need to 

be replaced in the future, we will act before a potential risk of rupture develops. We are also supporting the testing work of the automakers and NHTSA as well as the work of the independent quality 

assurance panel led by former Secretary of Transportation Sam 

Skinner. And we will work with the automakers to get the word 

out to consumers to help maximize recall completion rates. 

We will continue to do all we can to ensure uncompromised safety, and we will keep you and the public updated on our progress. 

Thank you, Mr. Chairman. 

[The prepared statement of Mr. Kennedy follows:] 

PREPARED STATEMENT OF KEVIN M. KENNEDY, EXECUTIVE VICE PRESIDENT, 

OF NORTH AMERICA, TK HOLDINGS INC. (‘‘TAKATA’’) 

Chairman Thune, Ranking Member Nelson, and distinguished Members of the 

Committee, I am honored to be here today on behalf of Takata and our employees 

across the United States and around the world who are dedicated to making products that save lives. 

For Takata, safety is more than an obligation; it is the core of who we are and 

what we do. We are proud that millions of Takata airbags have inflated properly, 

preventing thousands of deaths and avoiding serious injuries in hundreds of thousands of accidents. We are also proud of our seatbelts that save lives, the spacesuit 

materials we make to protect our astronauts, and all the other high-quality products 

Takata manufactures. 

It is unacceptable to us and incompatible with our safety mission for even one of 

our products to fail to perform as intended and to put people at risk. We deeply regret each instance in which a Takata airbag inflator has ruptured, especially in 

those cases where someone has been injured or killed. 

We understand how important it is to the driving public, Congress, the National 

Highway Traffic Safety Administration (‘‘NHTSA’’), and our automaker partners to 

84 

address and resolve the safety concerns raised by the airbag ruptures, and we are 

committed to doing everything in our power to help achieve that goal. 

I am therefore pleased to tell you today what Takata is doing to address these 

issues. 

Takata’s Agreement with NHTSA 

After months of testing and analysis of tens of thousands of returned inflators and 

extensive discussions and collaboration, we voluntarily agreed with NHTSA to take 

broad actions, in conjunction with the automakers, to respond to the public safety 

concerns. 

Our agreement with NHTSA contemplates dramatically expanded recalls—including in several instances nationwide recalls—encompassing various types of airbag 

inflators. 

The proposed recalls and the related commitments we have made go well beyond 

the scope of the safety risk suggested by the current science and testing data. 

Root Cause Assessment 

Takata has engaged world-renowned experts in energetic systems from Germany’s 

Fraunhofer Institute to conduct years of research into the root cause of the inflator 

ruptures, and we have consulted with various engineering experts in the United 

States. Takata has also tested and analyzed tens of thousands of returned inflators 

over the past several months. We have shared the results of that research with 

NHTSA and the automakers, as well as with this Committee. 

Based on this research and our ongoing testing and analysis of returned inflators, 

Takata has gained a much better understanding of the long-term phenomenon behind the recent ruptures. Our best current judgment is that the potential for rupture is related to long-term exposure, over a period of several years, to persistent 

conditions of high heat and high absolute humidity. In certain circumstances, these 

conditions can result in an alteration in the propellant wafers in the inflators that 

could potentially lead to over-aggressive combustion. 

The research of our experts suggests that the potential for this long-term phenomenon to occur was not within the scope of the testing specifications prescribed 

by automakers or comprehended within the industry’s inflator validation practice 

when the inflators were originally made—an important fact that is not intended to 

put blame on the automakers or suggest an allocation of responsibility between the 

automakers and Takata. 

The potential for rupturing may also be influenced by other factors, including the 

possibility of manufacturing issues, like those identified in earlier recalls, and factors specific to particular vehicle models. 

Consistent with this research, most of the field ruptures have involved older inflators and most have occurred in regions of the country with high heat and high levels 

of absolute humidity. All research to date indicates that the potential for ruptures 

is limited to an extremely small fraction of older inflators. 

But even one rupture is too many, and so Takata has agreed to take much broader 

action. 

Driver Airbag Inflators 

All of the fatalities—including most recently in Louisiana—and most of the injuries that have occurred in accidents with ruptured airbag inflators in the United 

States have involved older types of driver-side airbag inflators that feature ‘‘batwing-shaped’’ propellant wafers. 

We propose to replace all of these ‘‘batwing’’ driver inflators, from start of production through end of production, in all vehicles registered anywhere in the United 

States. 

To date, there have been a total of 70 reported instances in the U.S. of such ‘‘field 

ruptures’’ involving the ‘‘batwing’’ driver inflators. Fifty-eight (58) of those ruptures 

occurred in vehicles that were already subject to previous recalls involving identified 

issues with the pressing of the propellant wafers in some of these inflators. 

To put these incidents in perspective, the 70 reported cases of field ruptures involving the older batwing driver inflators represent approximately 0.009 percent of 

estimated total deployments of these airbags, or around 9 failures out of every 

100,000 deployments. 

In the past several months, Takata has conducted ballistic tests of more than 

19,000 of these driver inflators, and 16 of them have ruptured during testing, or approximately 0.084 percent of the tested inflators. The inflators selected for this ballistic testing include a disproportionate number of older inflators returned from 

areas of high absolute humidity, so the percentage of failures seen in the testing 

results is likely to overstate the overall potential for rupture. 

85 

These figures are not meant to minimize the issue. But they do put in perspective 

why Takata’s Defect Information Reports (‘‘DIRs’’) state that a safety-related defect 

‘‘may arise’’ in ‘‘some’’ of these inflators. It is not the case that all of the inflators 

covered by the DIRs are ‘‘defective.’’ 

Notwithstanding the science and testing data suggesting that the problem is focused on a small number of older inflators that have spent years in regions of high 

heat and absolute humidity, Takata will support the replacement of all the batwing 

driver inflators through national recalls to be conducted by the affected automakers. 

The recommended recalls will proceed in four stages. In order to prioritize the replacement of inflators where the safety need is greatest, the first stage will target 

older vehicles that have ever been registered in the Southern States, Hawaii, and 

territories where the levels of both heat and absolute humidity are higher than anywhere else in the country. 

But the recalls will not stop there. Subsequent stages of the recalls will target 

the batwing driver inflators manufactured in later years and vehicles registered in 

other States outside the areas of high absolute humidity. The recalls will continue 

until we have replaced all of the batwing driver inflators, from start of production 

to end of production, and they will include vehicles manufactured by five different 

automakers—Honda, BMW, Chrysler, Ford, and Mazda. The final stage of the recalls will include the replacement of batwing driver inflators that were previously 

installed as remedy parts in prior recalls. 

Takata has also committed to cease producing the batwing driver inflators. 

Passenger Airbag Inflators 

There have been far fewer field ruptures involving passenger airbags: 22 total reported instances in the U.S. to date (of which most occurred in vehicles subject to 

prior recalls), and none has involved a fatality. Nevertheless, our agreement with 

NHTSA also contemplates significantly expanded recalls covering several types of 

passenger airbag inflators. 

One of these proposed recalls will be nationwide in scope. The other two will focus 

initially on high humidity States, but with the potential to expand to a nationwide 

recall if ordered by NHTSA after consideration of additional testing and consultations with Takata and the affected automakers. Specifically: 

For one type of passenger inflator, we have recommended a nationwide recall that 

will proceed in four stages, according to the year the inflator was made. This recall 

will encompass all of the inflators of this type from start of production through vehicle model year 2008, and it will involve vehicles manufactured by eight different 

automakers. 

The root cause assessment for the potential issue with these inflators includes the 

long-term exposure to high heat and absolute humidity discussed above, but it also 

includes the possibility of a specific manufacturing issue. 

This type of passenger inflator has been involved in nine (9) reported field ruptures in the U.S., which represents approximately 0.0045 percent of estimated deployments. While it has ruptured at a higher rate in Takata’s ballistic testing (approximately 0.68 percent out of nearly 10,300 tested), all but two of the test ruptures to date have involved inflators returned from high absolute humidity States. 

The two exceptions were inflators manufactured on the same day, which suggests 

the possibility of a discrete manufacturing issue. 

Takata has committed to continue testing this type of inflator from later model 

years and to share this test data with NHTSA, in order to monitor whether additional action may be appropriate. 

For two other types of passenger inflators, Takata has recommended recalls focused on particular models and model years of vehicles manufactured by certain 

automakers. The recalls will initially cover the relevant makes, models, and model 

years of these vehicles that were sold or ever registered in Florida, Georgia, Texas, 

and the other high absolute humidity States and territories. But there will be the 

potential for these recalls to expand later to other States and potentially nationwide 

if NHTSA finds that the results of further testing show the need for an expansion, 

after consultation with Takata and the affected automakers. 

The scope of the recalls recommended for these last two types of passenger inflators tracks the results of Takata’s testing and analysis. While there have been 13 

reported field ruptures of these inflators, representing approximately 0.0055 percent 

of estimated deployments, all have involved vehicles of the specific makes and models covered by our DIRs and all were in vehicles that had spent years in the areas 

of high absolute humidity. 

In addition, Takata’s ballistic testing of these two inflator types has shown elevated rates of test ruptures for these inflators when returned from the areas of high 

absolute humidity and from the particular models covered in the DIRs, and no test 

86 

ruptures for the same types of inflators in other circumstances. These results show 

the clear importance of long-term exposure to an environment of high heat and absolute humidity. But they also indicate that something about the particular makes 

and models of these cars appears to be correlated with the potential for these inflators to rupture. 

Takata has committed to NHTSA that we will continue to test these types of passenger inflators from other vehicles and from other States to help determine whether the scope of these recalls should be expanded. 

Continued Use of Phase-Stabilized Ammonium Nitrate, Including in Remedy Parts 

In serving the demands of its customers, Takata continues to use phase-stabilized 

ammonium nitrate (‘‘PSAN’’) in the propellant formulations for many of its airbag 

inflators. PSAN is safe for use in airbag inflators, and Takata has full confidence 

in the safety of our current products that use PSAN propellant, including the replacement parts we are making in response to the recalls. The chemistry of phase 

stabilizing ammonium nitrate is well established and well understood, and our research into the root cause of the inflator ruptures has not shown that they are associated with any measurable loss of phase stabilization of the propellant, even after 

many years in the field. 

PSAN has distinct advantages over other chemicals used in alternative inflator 

propellants. It is non-toxic; it is stable and safe to handle during the manufacturing 

process; it produces far less smoke and particulate matter when the airbag is deployed, so that it is much less irritating to vehicle occupants with respiratory sensitivities; and PSAN-based propellants are significantly more efficient than other 

propellants (converting a higher percentage of the solid propellant into gas), so that 

PSAN inflators can be smaller and lighter, which has helped automakers meet government mandates to produce more fuel-efficient vehicles. 

At the present time, more than 50 percent of the airbag replacement kits Takata 

is providing in response to the recalls contain inflators made by other suppliers that 

do not use ammonium nitrate propellant. We expect that number to reach 70 percent by the end of this year. The use of other suppliers’ inflators significantly augments Takata’s capacity for production of replacement inflators and also responds 

to some automakers’ desire to use alternative technologies in implementing their recalls. 

Through investments in innovation, Takata has developed and continues to develop a range of new inflator products for use in both driver airbags and passenger 

airbags, including updated PSAN-based inflators with desiccant and inflators that 

do not use ammonium nitrate in the propellant. Takata is working intensively with 

vehicle manufacturers to validate new inflator products, including for use as remedy 

parts. Over time, all of our inflators will consist of new products. 

The process of developing and qualifying inflators that are re-engineered, including re-engineering inflators to add desiccant, takes time. Among other things, this 

process involves testing to establish that the airbag modules equipped with re-engineered inflators will adequately protect vehicle occupants in a crash. The completion 

of that process requires several months. 

For certain types of inflators in certain vehicle models, there is currently no available alternative to the use of a PSAN-based inflator as the remedy part. In these 

cases, we have agreed with NHTSA that the right solution for public safety is not 

to wait for the completion of a process of engineering changes and approvals, but 

is to take action now to replace the original inflators that are subject to the recalls 

with new PSAN inflators. 

The replacement of the original inflator with a newly made PSAN-based inflator 

is absolutely the right response to the public safety concerns raised by the inflator 

ruptures, and doing so provides an important safety benefit. Because a clear factor 

in these ruptures is the age of the inflator and long-term exposure to particular environmental conditions over many years, the replacement of older inflators with 

newly manufactured units, even ones without desiccant, will provide an ample margin of safety over the older units being replaced, particularly those that have been 

exposed for many years to conditions of high heat and absolute humidity. 

In replacing the batwing inflators on the driver side, Takata’s remedy parts include, in addition to inflators from other suppliers, a newer type of PSAN driver inflator that has not shown a potential risk for rupture after exposure to high heat 

and absolute humidity. On the passenger side, Takata has made improvements to 

address specific manufacturing issues and other improvements in the production of 

new inflators, and these improvements also contribute to the added safety of the 

newly manufactured PSAN replacement inflators. 

As we pledged in writing in the Consent Order and the DIRs we filed, Takata 

has agreed with NHTSA to conduct ongoing testing of PSAN-based inflators used 

87 

as remedy parts, in order to determine the appropriate service life of the parts and 

whether further action may be needed to replace the remedy parts in the future. 

You can be assured that if later replacement of these remedy parts is determined 

to be appropriate, Takata will take the necessary action, in conjunction with the affected automakers, to complete such replacements well before any potential risk of 

rupture develops. 

In the meantime, we strongly believe, and NHTSA agrees, that the goal of safety 

is best served through the expanded recall actions we have recommended. 

Implementing the Recalls 

The Consent Order that we have agreed to with NHTSA makes clear that NHTSA 

will play a central role in overseeing the organization and implementation of these 

proposed recalls. NHTSA has now issued notices in the Federal Register to receive 

comments on how best to proceed in this regard. We anticipate that NHTSA will 

convene meetings involving Takata and all of the affected automakers to organize 

and coordinate the staging of the recalls, so as to ensure that the remedy is appropriately prioritized to those vehicles where the public safety need is most immediate. 

The Consent Order also requires Takata, after consulting with the automakers, 

to prepare a plan for NHTSA’s approval that outlines the steps Takata will take, 

both on its own and in conjunction with the affected automakers, to maximize recall 

completion rates and, as noted, to carry out further testing of inflators to help determine the safety and appropriate service life of the remedy inflators. 

Because the recalls will only succeed if consumers bring their cars in for repair, 

we have committed to working with NHTSA and our customers to help inform consumers about the risks associated with some inflators, and to urge them to respond 

in a timely fashion to the recalls that are being implemented. 

To this end, we are in the process of developing a proactive advertising campaign 

for NHTSA’s approval that would be designed for implementation in conjunction 

with the automakers, in order to reach greater numbers of vehicle owners and help 

to ensure that the recall completion rates will be as high as possible. 

Additional Measures 

Let me say a bit more about Takata’s extensive testing program and our ramped 

up production of replacement kits to address the needs of these recalls. 

Since the last hearing before this Committee, we have continued to advance our 

investigation into the root cause factors associated with the inflator ruptures. We 

have performed ballistic tests on more than 50,000 inflators since September of last 

year, and that testing and analysis is ongoing. We also have performed live dissections, propellant analysis for moisture, chemical analysis, leak testing, and CT scanning. 

We continue fully to support efforts by David Kelly’s Independent Testing Consortium and the automakers to do additional testing and analysis. And we welcome 

NHTSA’s decision to do its own testing, as well as to coordinate with us on our testing. 

In addition to supporting these ongoing testing efforts, we are continuing to support the work of the independent Quality Assurance Panel, led by former Secretary 

of Transportation Samuel K. Skinner, to ensure that best practices are in place for 

the production of safe inflators. We are committed to adopting the recommendations 

his panel puts forth, and sharing the findings of the report with you and with the 

public. 

We also have continued to ramp up substantially our production of replacement 

kits to fulfill automaker orders. In December, we were producing approximately 

350,000 kits per month. In May, we produced approximately 700,000 units. By September, we expect to be producing 1 million per month. That is capacity primarily 

directed to production for the U.S. market. And, as mentioned, we continue to work 

with other inflator suppliers to increase further the production of replacement inflators to meet anticipated demand. 

Conclusion 

In closing, I want to emphasize that we have confidence in the inflators we are 

producing today. We have confidence in the integrity of our engineering and our current manufacturing processes. We believe that, properly manufactured and installed, these inflators will work as designed to save lives. Of course, we know that 

the proof is in the data, and that is why we have enlisted the assistance of the Quality Assurance Panel and why we have agreed to conduct ongoing testing, including 

of our remedy parts. We will continue to do everything we can to ensure 

uncompromised safety for our customers and the success of the recall efforts, and 

we will keep Congress, NHTSA, and the public updated on our progress. 

88 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Mr. Kennedy. 

Mr. Kunselman? 

STATEMENT OF SCOTT KUNSELMAN, 

SENIOR VICE PRESIDENT AND HEAD OF VEHICLE 

SAFETY AND REGULATORY COMPLIANCE, FCA US LLC 

Mr. KUNSELMAN. Thank you. 

Chairman Thune, Ranking Member Nelson, members of the 

Committee, thank you for the opportunity to appear today and provide an update on this important matter. 

My name is Scott Kunselman, and I am the senior vice president 

and head of vehicle safety and regulatory compliance at FCA US, 

LLC, formerly Chrysler. I lead an organization with a mission of 

safeguarding our customers, a mission we embrace with passion. 

As you know, FCA’s involvement with Takata airbags is extensive, proactive, and ongoing. 

Today’s automobiles are among the most sophisticated and complex consumer goods on the market. Auto manufacturers are more 

committed than ever to developing advanced safety technologies to 

reduce fatalities and injuries resulting from motor vehicle crashes. 

On a daily basis, we work to design, engineer, and manufacture vehicles to withstand a myriad of operating conditions. 

Promoting and ensuring vehicle safety is a responsibility shared 

by automakers, suppliers, government, and even consumers. FCA 

looks forward to continuing this collective engagement with Takata 

and NHTSA to help address this critical situation related to airbag 

inflators. 

FCA has remained actively engaged with Takata and NHTSA 

since I spoke with this committee last November. Much has transpired since that time. Through multiple recall campaign expansions and based on information from both Takata and actions by 

NHTSA, FCA is now in the process of recalling 4.8 million inflators 

in approximately 4.5 million vehicles across the United States. 

We are also aggressively taking actions on multiple fronts to assist in determining the root cause of inflator ruptures, which remains unknown at this time. FCA is an active participant in the 

Independent Testing Coalition, a group consisting of all 11 affected 

automakers formed in December 2014 and, again, trying to independently determine the root cause of inflator ruptures. In addition, FCA continues to return recalled inflators to Takata to further their research and understanding. 

But despite the lack of root cause determination to date, FCA’s 

mission to identify and implement solutions that will improve the 

safety of our customers has not been delayed. Today, I am pleased 

to share with the Committee that as of June 8, 2015, FCA is replacing all driver-side inflators involved in the recall with an alternate and permanent design provided through TRW. Customers who 

receive the TRW inflator replacement will require no further action 

on their vehicles. 

The Takata inflators that are no longer needed due to the supply 

from TRW are being quarantined and returned from our dealers to 

Takata. All of the approximately 50,000 customers who previously 

89 

received a Takata inflator will be notified to return for the TRW 

update, as well. 

In addition to these driver-side efforts, FCA has been working 

with Takata to develop improved versions of the passenger inflator 

designs. These new versions will contain an improved igniter material as well as a desiccant that will protect the propellant from 

moisture exposure. These designs will complete validation testing 

in August, and FCA expects to begin installing those in November 

of this year. 

To date, FCA continues to be aware of just a single incident of 

a high-pressure deployment involving a driver-side airbag causing 

an injury in one of our vehicles. Our actions demonstrate the abundance of caution we are employing to protect our customers. 

In closing, I would like to reiterate our belief that promoting and 

ensuring vehicle safety is a responsibility shared by automakers, 

suppliers, government, and consumers, and FCA will continue to 

collaborate with Takata, NHTSA, and others to aggressively address this matter. 

I once again extend my thanks to the Committee for discussing 

this important issue, and I would be pleased to answer any questions. 

[The prepared statement of Mr. Kunselman follows:] 

PREPARED STATEMENT OF SCOTT G. KUNSELMAN, SR. VICE PRESIDENT AND HEAD OF

VEHICLE SAFETY AND REGULATORY COMPLIANCE, FCA US LLC 

Chairman Thune, Ranking Member Nelson, Members of the Committee, thank 

you for the opportunity to appear today and provide an update on this important 

matter. 

My name is Scott Kunselman and I am Senior Vice President and Head of Vehicle 

Safety and Regulatory Compliance at FCA US LLC. I lead an organization with a 

mission of safeguarding our customers, a mission we embrace with passion. 

As you know, FCA’s involvement with Takata airbags is extensive, proactive and 

ongoing. 

Today’s automobiles are among the most sophisticated and complex consumer 

goods on the market. Auto manufacturers are more committed than ever to developing advanced safety technologies to reduce fatalities and injuries resulting from 

motor vehicle crashes. On a daily basis, we work to design, engineer, and manufacture vehicles to withstand a myriad of operating conditions. 

Promoting and ensuring vehicle safety is a responsibility shared by auto makers, 

suppliers, government and consumers. FCA looks forward to continuing this collective engagement with Takata and NHTSA to help address this critical situation relating to airbag inflators. 

FCA has remained actively engaged with Takata and NHTSA since I spoke with 

this Committee last November. Much has transpired since that time. Through multiple recall campaign expansions, based on information from Takata and actions by 

NHTSA, FCA is now in the process of recalling 4.8 million inflators in 4.5 million 

vehicles in the United States. 

We are also aggressively taking actions on multiple fronts to assist in determining 

the root cause of inflator ruptures, which remains unknown at this time. FCA is 

an active participant in the Independent Testing Coalition (ITC), a group consisting 

of the 11 affected automakers formed in December 2014 trying to independently determine the root cause of the inflator ruptures. In addition, FCA continues to return 

recalled inflators to Takata to further their research and understanding. 

Despite the lack of a root cause determination to date, FCA’s mission to identify 

and implement solutions that will improve the safety of our customers has not been 

delayed. Today, I am pleased to share with the Committee that as of June 8, 2015, 

FCA is replacing all driver side inflators involved in the recall with an alternate 

and permanent design provided by TRW. Customers who receive the TRW inflator 

replacement will require no further action on their vehicles. Takata inflators that 

are no longer needed due to the supply from TRW are being quarantined and returned from our dealers to Takata. All of the approximately 50,000 customers who 

90 

previously received a Takata inflator will be notified to return for the TRW update, 

as well. 

In addition to these driver side efforts, FCA has been working with Takata to develop improved versions of the passenger inflator designs. These new versions will 

contain an improved igniter material, as well as a desiccant that will protect the 

propellant from moisture exposure. These designs will complete validation testing 

in August and FCA expects to begin installation in November of this year. 

To date, FCA continues to be aware of a single incident of a high-pressure deployment involving a driver’s-side air bag that caused a personal injury in one of our 

vehicles. Our actions demonstrate the abundance of caution we are employing to 

protect our customers. 

In closing, I would like to reiterate our belief that promoting and ensuring vehicle 

safety is a responsibility shared by auto makers, suppliers, government, and consumers. FCA will continue to work collaboratively with Takata, NHTSA and others 

to aggressively address this matter. 

I once again extend my thanks to the Committee for discussing this important 

issue and I would be pleased to answer any questions. 

The CHAIRMAN. Thank you, Mr. Kunselman. 

Mr. Schostek? 

STATEMENT OF RICK SCHOSTEK, EXECUTIVE VICE 

PRESIDENT, HONDA NORTH AMERICA 

Mr. SCHOSTEK. Thank you, Mr. Chairman, Ranking Member Nelson, and members of the Committee. I appreciate the opportunity 

to update the Committee on our efforts since my last appearance 

before this committee. 

Let me begin by acknowledging that in the past 2 weeks we have 

confirmed that two more customers lost their lives—one in September 2014 and the other in April of this year—as a result of 

Takata airbag inflator ruptures that have occurred in our oldermodel vehicles. 

This is heartbreaking and a painful reminder to us of the reason 

we continue to urgently accelerate our actions to repair the affected 

vehicles. But, of course, the real pain is experienced by the families 

of the victims. We sincerely apologize to them and extend our deepest sympathies. 

We are working very hard to solve this problem. Over and above 

the required mailed notification to affected customers, we have pursued new and creative ideas to encourage our customers to check 

their vehicle identification number in order to increase the rate of 

response to the recalls. We have enhanced our general recalls 

website and created a new micro site dedicated to this issue to 

keep our customers informed and to make it easy for them to check 

their vehicles for open recalls. 

Honda also voluntarily initiated a bilingual regional advertising 

program in March to implore customers to repair their vehicles. 

This campaign of radio commercials and full-page newspaper ads, 

represented here to my left, was designed to grab the attention of 

customers in the nine high temperature and absolute humidity 

states and two U.S. territories. We also are using social media 

channels in a targeted way, including via Facebook, with good success. 

And let me add, Mr. Chairman, that whenever we issue a press 

release or statement on this matter, we specifically request that 

the news media help us spread the word by directing customers to 

our recall websites so they can look up their VIN and get their veVerDate Nov 24 2008 08:11 May 04, 2016 Jkt 075679 PO 00000 Frm 00094 Fmt 6633 Sfmt 6601 S:\GPO\DOCS\99955.TXT JACKIE
91 

hicle repaired. And we have appreciated the news media’s assistance with this effort. 

To accelerate the safety actions and increase the supply of airbag 

inflators, Honda proactively began searching for alternate supply 

solutions to more quickly facilitate the repairs of these older-model 

vehicles. And that effort led to agreements with Daicel, Autoliv, 

and TRW to provide us with replacement parts, in addition to 

Takata. 

As a result of this proactive effort by Honda and the actions 

taken by our dealers, we are averaging more than 50,000 repairs 

per week. We have also asked our dealers to expand their service 

hours and never turn away a customer with an affected vehicle. 

And we require dealers to check the VIN for every vehicle that 

comes into their dealership. To support this policy, in February we 

initiated a new system that alerts dealers whenever their staff fails 

to check a VIN of a car brought in for service to see if it has an 

open recall. 

We have also reinforced with our dealers Honda’s firm policy to 

provide affected customers with a loaner or rental car free of 

charge while their vehicle is being repaired or if they are waiting 

for a replacement part to be delivered. All dealers are authorized 

to make a vehicle available to a customer without prior approval 

from Honda. 

We have also been searching salvage yards nationwide to find 

and secure recalled inflators. We have already identified many 

thousands of inflators from salvage yards that now never will be 

installed in another vehicle. 

In some markets, we have enlisted a special investigative firm as 

part of our effort to contact hard-to-reach owners of older model vehicles affected by the Takata airbag inflator recalls. 

Mr. Chairman, for many reasons, it is particularly difficult to locate the owners of older vehicles and get them repaired. When I 

testified last November, I suggested that we find a way to tie the 

annual state vehicle registration process to a requirement that 

safety defects be addressed before completion of vehicle registration. 

Subsequently, Ms. Stephanie Erdman, who was injured by a 

Takata inflator rupture and who also appeared before this committee last fall, joined me in writing an op-ed in Automotive News 

in support of the idea of such a registration requirement. 

We continue to believe there is substantial promise with this approach, and we want to thank Senators Markey and Blumenthal 

for introducing S. 617. I recognize there are some issues about the 

concept that require further discussion, but I am convinced that 

this is the single most significant step we can take. 

Again, I very much appreciate the opportunity to appear before 

the Committee today, and I would be happy to address your questions. Thank you. 

[The prepared statement of Mr. Schostek follows:] 

92 

PREPARED STATEMENT OF RICK SCHOSTEK, EXECUTIVE VICE PRESIDENT, HONDA NORTH AMERICA

Thank you, Mr. Chairman, Ranking Member Nelson and members of the Committee. My name is Rick Schostek, Executive Vice President of Honda North America, based in Marysville, Ohio. 

I appreciate the opportunity to update the Committee regarding the efforts made 

by Honda with respect to the recall of Takata airbag inflators since my last appearance before this committee over seven months ago. 

Let me begin by acknowledging that in the past two weeks we have confirmed 

that two more customers lost their lives—one in September 2014 and the other in 

April of this year—as a result of Takata airbag inflator ruptures that have occurred 

in our older model vehicles. This is heartbreaking, and a painful reminder to us of 

the reason we continue to urgently accelerate our actions to repair the affected vehicles. But of course the real pain is experienced by the families of the victims. We 

sincerely apologize to them, and extend our deepest and heartfelt sympathies. 

We are working very hard to solve this problem. During the past few months, we 

have been accelerating our efforts to repair vehicles at a level unprecedented in the 

history of our company. 

This is a reflection of the deep commitment our company has undertaken to notify 

our customers and to increase the supply of replacement inflators available for repairs. 

Over and above the required mailed notification to affected customers, we have 

pursued new and creative ideas and methods to encourage our customers to check 

their vehicle identification number and recall status in order to increase the rate 

of response to recall notifications. 

We have enhanced our general recalls website and created a new microsite dedicated to this issue to keep our customers informed and to make it easy for them 

to check their vehicles for open recalls. And our Customer Relations department is 

set up to receive calls from customers seven days a week. 

Honda also voluntarily initiated a bi-lingual regional advertising campaign in 

March to implore customers to repair their vehicles. This campaign of radio commercials and full-page newspaper ads, represented behind me, was designed to grab 

the attention of customers in the nine states and two U.S. territories that experience the most consistently high temperatures and absolute humidity and to encourage them to immediately check for open recalls and safety improvement campaigns. 

We also are using social media channels in a targeted way—including via 

Facebook, with good success. Let me add, Mr. Chairman, that whenever we issue 

a news release or statement on this matter, we specifically request that the news 

media help us spread the word by directing customers to our recall websites, so they 

can look up their VIN and get their vehicle repaired. We have appreciated the news 

media’s assistance with this effort. 

To accelerate the safety actions and increase the supply of airbag inflators, Honda 

proactively began searching for alternative supply solutions to more quickly facilitate repairs of our older model vehicles. This effort led to agreements with Daicel, 

Autoliv and TRW Automotive to provide us with replacement parts in addition to 

Takata. 

As a result of this proactive effort by Honda and the actions taken by our dealers, 

in recent weeks, we are averaging more than 50,000 repairs per week. We have 

asked our dealers to expand service hours and to never turn away a customer with 

an affected vehicle. And we require dealers to check the VIN for every vehicle that 

comes into their dealership. To support this policy, in February we initiated a new 

system that alerts dealers whenever their staff fails to check the VIN of a car 

brought in for service to see if it has an open recall. 

We also have reinforced with our dealers Honda’s firm policy to provide affected 

customers with a loaner or rental car free of charge while their vehicle is being repaired or if they are waiting for a replacement part to be delivered. All dealers are 

authorized to make a vehicle available to a customer without prior approval from 

Honda. We have been actively monitoring the availability of loaner and rental cars 

and engaging with our dealers to ensure that they offer such vehicles so we can 

meet our customers’ needs. 

Further, to prevent the possibility that any Takata airbag inflators under recall 

can be used as a replacement part, we’ve been searching salvage yards nationwide 

to find and secure recalled inflators. We have already identified many thousands of 

inflators from salvage yards that now never will be installed in another vehicle. 

In some markets, we have enlisted a special investigative firm as part of our effort to contact hard-to-reach owners of older model vehicles affected by the Takata 

airbag inflator recalls. 

93 

Mr. Chairman, for many reasons, it is particularly difficult to locate the owners 

of older vehicles and get the vehicles repaired. When I testified last November, I 

suggested that we find a way to tie the annual state vehicle registration process to 

a requirement that safety defects be addressed before completion of vehicle registration. Subsequently, Ms. Stephanie Erdman, who was injured by a Takata inflator 

rupture and who also appeared before this committee last fall, joined me in writing 

an Op Ed in Automotive News in support of the idea of such a registration requirement. 

We continue to believe that there is substantial promise with this approach. I 

want to thank Senators Markey and Blumenthal for introducing S.617, the Repairing Every Car to Avoid Lost Lives Act—the ‘‘RECALL’’ Act. I recognize that there 

are a number of issues about this concept that require further discussion. But I am 

convinced that this is the single most significant step we can take to achieve what 

we all want to accomplish, and that is a 100 percent repair rate. Our company 

stands ready to work with the Congress to help find a path forward. 

Even as we look at new, long-term solutions to improve recall completions, we remain focused on the needs of our customers today. And we are fully mobilized on 

the effort to complete the recalls and safety improvement campaigns associated with 

Takata airbag inflators. 

Again, I very much appreciate the opportunity to appear before the Committee 

today, and I will be happy to address your questions. Thank you. 

The CHAIRMAN. Thank you, Mr. Schostek. 

Mr. Kennedy, NHTSA has urged Takata to get replacement inflators into vehicles with potentially defective airbags as quickly as 

possible even if the root cause has not yet been identified and those 

replacements may have to be replaced again some years down the 

road. 

We are all concerned this very serious safety issue has persisted 

for way too long. And eight people have died; numerous others 

have received serious injuries. Takata has been looking at this 

problem for several years. We need to know why this happened and 

make sure it doesn’t happen again. 

So tell me what Takata is doing to find the root cause. 

Mr. KENNEDY. Well, Senator, we have been working with a number of avenues to get to root cause. As you have mentioned, we 

have been working on this for a number of years. We have been 

working with the Fraunhofer Institute from Germany, who is the 

leading expert in the world on propellants and pressure vessel designs. 

We have learned much, especially in the last 6 to 8 months, as 

to what the root cause of this is. We understand the mechanism. 

We understand a number of the factors that cause the issues. But, 

as you said, we do not have a definitive root cause that we can turn 

on and off. 

But, in spite of that, we have gone forward with NHTSA and the 

automakers to replace parts because this is in the best interests of 

the public safety. 

The CHAIRMAN. Well, without a root cause, though, we don’t 

know whether or not the new replacement inflators have the same 

defect. So why is it a good idea to put new inflators into cars that 

might have the same defect? 

Mr. KENNEDY. Yes. Well, let me talk about that a little bit. 

Many of the replacement parts are alternative designs; they are 

not the same design that was originally used. As I mentioned, particularly on the driver side, the batwing inflators were the ones 

that have caused all of the fatalities in the field as well as most 

of the serious injuries. And we are not replacing with batwings. We 

94 

will go out and get every batwing that was ever made, including 

all of the remedy parts. 

And we are also, as Mr. Kunselman and Mr. Schostek have 

talked about, we are using alternative inflators from many of our 

competitors in order to speed replacement parts out into the field. 

And then we are continuing to work to improve the current inflators, as Mr. Kunselman mentioned as well, in order to make them 

more robust. And part of the consent order requires us and NHTSA 

and the automakers to continue to get the parts back and evaluate 

the remedy parts to make sure that they are safe. 

The CHAIRMAN. Will these replacement bags, though—are they 

going to be safer than the original equipment, than the original airbags? 

Mr. KENNEDY. What we do know is that it takes a considerably 

long time for this condition to manifest itself. Previously, Administrator Rosekind had said 7 to 12 years. So we know that there is 

a large increase in public safety and in the margin of safety by just 

putting a brand-new inflator in. 

And we do know that on some of the passenger-side ones, there 

were some manufacturing defects that we have been able to uncover with all the testing that we have done in the last 6 months. 

So we feel very confident in the inflators that we are making today. 

The CHAIRMAN. Mr. Kunselman, Takata has stated, as you 

heard, that its replacement inflators are safe in the interim but require replacement at a later date. NHTSA also endorsed this approach. 

You have stated that Fiat Chrysler will be replacing all recalled 

driver-side inflators with an alternative design by manufacturer 

TRW and described TRW’s design as permanent, that customers 

who receive the TRW replacement will not need to come back in 

for another replacement. 

Given that we still don’t know the root cause for this defect, why 

are you so confident that the TRW inflators will not have to be replaced in the near future? 

Mr. KUNSELMAN. In this case, the TRW inflator that we are replacing—with Takata’s help, mind you—it has a track record, and 

we are not aware of any issues with its previous use in the field. 

We were fortunate to have an available inflator with the right 

characteristics to utilize in our vehicle program that has a track 

record, and I am unaware of issues with it in the past. That explains the confidence. 

The CHAIRMAN. Yes. 

Mr. Kunselman, Mr. Schostek, for our automakers, I am sure you 

both recall because we had her in here, Lieutenant Stephanie 

Erdman, who was seriously injured by shrapnel from a defective 

Takata airbag, testified at our November hearing that she took her 

vehicle to a Honda dealership three times without the dealer informing her that her car was subject to an open recall. Now, that 

is pretty incredible. Three times. 

And so the question is, you know, what steps have you all taken 

since then to work with your dealers? And I know you described 

some of this, Mr. Schostek, in your testimony. But how are you 

going to give us an insurance that these important safety recalls 

have been addressed and assure that recall information and vehicle 

95 

safety issues are going to be shared with customers when they get 

their cars in and have them serviced? 

Mr. SCHOSTEK. Thank you, Mr. Chairman. It is an important 

question, and it is on our minds constantly, as well. We have more 

than 1,200 Honda and Acura dealers in the United States, and we 

are working hard with them. 

We have done a number of things since we last were here in November. As I mentioned, we have initiated a new report that flags 

if a dealer neglected to check a VIN when a customer came in. 

Moreover, we have had face-to-face meetings with our dealers. 

We have zone managers and district managers, and they have personally visited every dealer and talked to each dealer about the importance of checking for open recalls. We have periodic regional 

meetings of our dealer principals. We have in the last several 

months reinforced again that obligation. 

Mr. Chairman, there is sometimes turnover at a dealership. We 

need to continue to make sure that education is well understood, 

make sure that the dealer principals understand, the owners of the 

dealerships understand that this is our expectation of them and 

that we are going to check every one of these VINs. 

So we have taken multiple efforts already, and we will do more 

to continue to remind them of their obligation. 

The CHAIRMAN. Mr. Kunselman, do you have anything to add to 

that? 

Mr. KUNSELMAN. Yes, I would reiterate, many of the same points 

that Mr. Schostek highlighted we are doing, as well, with respect 

to informing the dealer of their responsibility. 

I would add to it something that he also mentioned earlier. We 

have made sure that the technology is also there to make this automatic step in the process. When a vehicle rolls into the service bay 

at a dealer, in most cases in an automated fashion the vehicle 

uploads the information to the service provider’s screen, and the 

service provider is immediately flagged of open recalls, and the 

service provider goes out of their way to schedule that activity on 

that visit or on an immediately subsequent visit. 

So, in addition to the reminders of responsibility, the urgency, we 

are making sure that the technology exists to make this an automatic step in the process, so it is not left to human hands, but the 

machine can point this out to their service provider. 

The CHAIRMAN. Yes. Thank you. 

Senator Nelson? 

Senator NELSON. Would you all hold up that photograph, please? 

This is a picture of a massive explosion in 2006 in your Mexico 

plant. It was so massive that it blew out windows a kilometer 

away. 

This plant used the ammonium nitrate propellants to make airbag inflators; is that correct? 

Mr. KENNEDY. Yes, sir, that is correct. 

Senator NELSON. And, in your written response to our committee’s November letter, the company said that the explosion was 

caused by, quote, ‘‘improper storage of propellant scrap.’’ Is that 

right? 

Mr. KENNEDY. Yes, sir. Yes, Senator, that is correct. 

96 

Senator NELSON. Is that the type of concern that your safety audits were intended to identify? 

Mr. KENNEDY. One of them, yes, sir. 

Senator NELSON. Then why would Takata decide to halt these 

audits for financial reasons? 

Mr. KENNEDY. Yes, I believe you are referring to the report that 

was issued yesterday by the staff of the Committee. I think that 

misrepresents exactly what happened, sir, and, if you will allow 

me, I will explain that. 

Senator NELSON. Certainly. 

Mr. KENNEDY. What that was referring to—first of all, there are 

a number of safety and quality audits that are done on the products. The audits that were referred to in that e-mail were not the 

safety and the quality audits on the products, first of all. Because 

I think that was implied or inferred from the report. 

Second, the only thing that was suspended was the participation 

of people from other regions of the world. We held the local safety 

audits. We held the local quality audits. They were all done on 

schedule, and they were completed. The only thing that e-mail was 

referring to was the participants from other parts of the world were 

not to be included in the audit. 

Senator NELSON. All right. But I am trying to get at this. Hasn’t 

Takata blamed the defective airbags on how your plants handled 

the ammonium nitrate propellants and how your plants assembled 

the inflators? 

Mr. KENNEDY. There were some of the earlier recalls that I believe were announced in 2008–2009 where we identified manufacturing defects that included the pressing of propellant disc as well 

as exposure to humidity during the process. 

Senator NELSON. So the answer is yes. So if you are saying that 

these pyrotechnic handling problems had to do with the safety of 

the inflators, wouldn’t you have had a clue in 2006 when that happened? 

Mr. KENNEDY. Absolutely. Absolutely, we did. We had issues at 

the plant where material, scrap material, was mixed, and that is 

what led to that particular incident. 

Fortunately, no one was injured in that incident, other than I 

think someone sprained their wrist walking out the door. So we 

completely cleared the plant. No one was injured, no one was hurt 

in that particular thing. 

And we revised a number of our safety and handling procedures 

following that. They were completely redone after that. 

Senator NELSON. And yet, knowing that something is going on 

here, it is 9 years later—— 

Mr. KENNEDY. Yes, sir. 

Senator NELSON.—and now we see. 

Now, explain this batwing design and why you think that is the 

culprit. 

Mr. KENNEDY. Well, the batwing design is just—it is a name the 

engineers came up with to describe the shape of the propellant 

wafer that is inside the driver airbag inflator. There is really nothing about it other than that. 

Senator NELSON. The propellant that caused that explosion? 

97 

Mr. KENNEDY. It was one of the—it was the mixing of different 

types of propellant and energetic materials that led to that particular incident. 

Senator NELSON. Did it occur to you back in 2006 with this that 

humidity might have had something to do with it? 

Mr. KENNEDY. I haven’t reviewed the report, and I don’t remember it from that long ago, Senator. But I don’t recall the humidity 

was an issue in that particular incident at the facility. 

Senator NELSON. What about—— 

Mr. KENNEDY. I can double-check that to be sure and get back 

with you, but that is my recollection. 

Senator NELSON. Well, what about all these deaths in the South? 

Do you think humidity is one of the contributing factors? 

Mr. KENNEDY. Yes, Senator, we do. The report from the 

Fraunhofer Institute has concluded that they think it is a multifactor combination of age, exposure to high absolute humidity, and 

high temperature. 

Senator NELSON. Then how do you explain the southern California, where there is a mild temperature, death? 

Mr. KENNEDY. Well, that is why we are continuing to look into 

the issue. We haven’t dropped it. We have experts from Penn State. 

We have experts from Georgia Tech. We have the Fraunhofer Institute. We are working with a vast array of experts in this field, and 

we are continuing to investigate to try to run it to ground so we 

know exactly what happened. 

But that is why we decided to act, with NHTSA and the automakers, to go get these parts now. It is the right thing to do for 

the public’s safety. 

Senator NELSON. Would you want your daughter to drive a vehicle with a Takata airbag that you had replaced the batwing ammonium nitrate? 

Mr. KENNEDY. The car that my wife and children drive in every 

day uses one of these ammonium nitrate inflators. 

Senator NELSON. Did you replace the batwing? 

Mr. KENNEDY. It was not—it was on the passenger side. 

Senator NELSON. Is that the only place that it is replaced, on the 

passenger side? 

Mr. KENNEDY. Batwings are just a driver-side design. It is not 

used on the passenger side at all. It is purely a driver-side issue. 

Senator NELSON. So you are attributing the batwing design to 

part of the defect. 

Mr. KENNEDY. That is what the data and the testing has shown. 

All of the fatalities and most of the serious injuries have involved 

the batwing driver inflators. That is why we have agreed to go get 

100 percent of those back from the field. 

Senator NELSON. Then I didn’t understand your answer, that you 

suddenly jumped to the passenger side. 

Mr. KENNEDY. Well, you asked me if I would—maybe I misinterpreted your question, Senator. I am sorry. 

Senator NELSON. If your daughter were driving the automobile 

that you had replaced the batwing design in the driver’s seat—— 

Mr. KENNEDY. I would have no issue with that at all, Senator. 

None. 

98 

Senator NELSON. Well, I will tell you, there are a lot of consumers that would. How do you think that the consumers can feel 

that this thing is fixed? 

Mr. KENNEDY. Well, that was why—again, sticking with the batwing on the driver side—that is why we have agreed to go replace 

every one of these, to go get the parts and get them out of the field. 

And a lot of people have talked today about the efforts to do that. 

And that is really one area where we, as an industry and a government, need to concentrate, is to get the parts out of the field 

once there has been a defect analyzed and declared. 

Senator NELSON. Mr. Kunselman, apparently you don’t feel confident enough that it is fixed. You have gone to a new airbag manufacturer. Tell us about that. 

Mr. KUNSELMAN. Yes, thank you. 

Again, as I stated, we were fortuitous in the ability to identify 

an alternative that would perform appropriately in our vehicle, 

given the demands of the fill rate and size of the airbag. And so 

we did quickly move here to gain confidence that this would be a 

permanent solution, even in the absence of root cause, not understanding what ultimately might happen. This is why we took this 

path. 

Senator NELSON. May I regurgitate your words, and you tell me 

if this is what you just said? 

We wanted a clear path to greater confidence, so we went with 

another manufacturer. 

Mr. KUNSELMAN. That is correct. 

Senator NELSON [presiding]. OK. 

Thank you, Mr. Chairman. 

Senator Blumenthal? 

Senator BLUMENTHAL. Thank you, Senator Nelson. 

Thank you for being here today, all of you. 

Mr. Kennedy, you have been with Takata for only about 3 years, 

correct? 

Mr. KENNEDY. No, sir. I have been with Takata just over 10 

years. 

Senator BLUMENTHAL. Ten years. 

Mr. KENNEDY. Yes, sir. 

Senator BLUMENTHAL. Sorry. So you were with the company back 

in 2005. 

Mr. KENNEDY. Yes. I started in December 2004. Correct. 

Senator BLUMENTHAL. I would like you to commit, as Executive 

Vice President of this company, that Takata will establish a compensation fund, similar to the one that GM established. 

Mr. KENNEDY. Yes, I haven’t been involved in that, of the recall, 

at this point, sir, so I can’t do that. I will certainly take that back 

to our Chairman and to our team and discuss that and get back 

with you on that. But I am not in a position today to commit to 

that, sir. 

Senator BLUMENTHAL. Don’t you run the company’s North American operation? 

Mr. KENNEDY. I have responsibility for certain aspects in North 

America. I am responsible for our customer activity, including sales 

and marketing; engineering, application engineering; program 

management; some of our core engineering, not related to inflators 

99 

but core engineering on other projects; as well as some of our IT 

and communications. 

Senator BLUMENTHAL. Well, I am just a country lawyer from 

Connecticut, but it sounds like you run this company in North 

America. 

Mr. KENNEDY. I report to an executive committee and a president 

of North America. So I do not run all aspects of the North American operation, sir. 

Senator BLUMENTHAL. How soon can you come back with an answer about a compensation fund? 

Mr. KENNEDY. I would think in the next—would 4 weeks be sufficient, sir? 

Senator BLUMENTHAL. How about the next 2 weeks? 

Mr. KENNEDY. Two weeks? Yes, sir. 

Senator BLUMENTHAL. My view is that Takata is every bit as responsible for the 8 deaths found so far as GM is for the 117 deaths 

and counting. 

And the number eight is still, as of today—the compensation 

fund that you should establish, in my opinion, is likely to disclose 

additional deaths that resulted from this defective product. Would 

you agree? 

Mr. KENNEDY. I think it is—I would agree that it is probably 

likely, as many of these parts are still in the field. 

Senator BLUMENTHAL. In fact, let me show you one of those 

parts. This is a Takata inflator that caused the explosion in this 

airbag that caused these holes. It didn’t shred the airbag, but the 

shards that came through the airbag, caused by the explosion—and 

you can see the results of that explosion—piercing this metal, and 

you can see where the shards, emanated, could well have caused 

the kinds of deaths that we have seen eight times so far, demonstrated eight times so far. Correct? 

Mr. KENNEDY. Yes, sir. And, again, I just want to repeat how 

deeply sorry we are for all of the pain and suffering we have 

caused. 

Senator BLUMENTHAL. And I am not challenging whether you are 

sorry. I believe sincerely that you are. My question is, in replacing 

these batwing propellants, have you also replaced the chemical, 

ammonium nitrate, that was used in these batwing propellants? 

Mr. KENNEDY. Some of the replacement parts that we are using 

for those batwings still include a phase-stabilized ammonium nitrate. But it is a completely different design that we have not experienced issues with. 

Senator BLUMENTHAL. You haven’t experienced issues with it because you haven’t finished testing. 

Mr. KENNEDY. Well, they have been in the field for a number of 

years, they have been used in a number of different vehicles, and 

these alternative designs have not seen issues. 

Senator BLUMENTHAL. Why are you continuing to use ammonium 

nitrate, when it was very likely a contributing factor, if not the factor, in causing these exploding inflators? 

Mr. KENNEDY. Well, first, I respectfully would disagree that it is 

the issue with causing the inflator ruptures. It could be one of the 

potential factors in it. 

100 

But phase-stabilized ammonium nitrate has many, many advantages, especially over the materials that we were using prior. The 

industry was using azide prior, and azide is highly, highly toxic. 

And some of the other materials that we had used had issues with 

handling and manufacturing because they were very, very energetic in a normal state. Phase-stabilized ammonium nitrate, if you 

put it on the table and put a torch on it, you can’t even light it. 

It is very safe, and it is very clean. It burns very, very efficiently, 

which, again, addressed some of the concerns that were in the field 

with previous propellants that were causing respiratory issues with 

many, many drivers. 

Senator BLUMENTHAL. But the problem is that it becomes unstable when it becomes moist or accumulates moisture, correct? 

Mr. KENNEDY. Well, it is not a phase-stabilization issue. This is 

what everyone was concentrating on at the beginning, that it is an 

issue with the phase stabilization of ammonium nitrate. The conclusions that the Fraunhofer Institute have come to is this is not 

a phase-stabilization issue. We cannot even measure the loss of 

phase stabilization that has occurred in these parts. 

It is not a phase-stabilization issue. This is a much more subtle 

issue that takes many, many factors over many, many years. And 

sometimes in certain vehicles—sometimes in one vehicle it will perform perfectly well. The same part in another vehicle and the same 

exact area will have issues. 

So there are a number of things we don’t understand. But that 

is why we felt it was time to act and get the parts out of the field, 

so we could continue this analysis of the parts. 

Senator BLUMENTHAL. You are continuing to use ammonium nitrate but with a different design? 

Mr. KENNEDY. We have many designs that use phase-stabilized 

ammonium nitrate. I think, of the six that are involved in this, 

most are out of—I think five of the six are out of production. There 

is another one that will be out very shortly. So the ones involved 

in these particular issues and these particular recalls are not in serial production any longer. 

Senator BLUMENTHAL. Looking forward, are you replacing the 

batwing propellants or inflators out there now with inflators that 

have ammonium nitrate? 

Mr. KENNEDY. Some of them are still using—it is a completely 

different inflator design, a completely different propellant design, 

but some of them do still use phase-stabilized ammonium nitrate. 

But, as Mr. Kunselman said, we are—I think, in May, 50 percent 

of the inflator kits that we sent included inflators from our competitors. By the time we get to December, 70 percent are estimated 

to be with outside inflators. 

So most of the replacements that we are having are alternative 

propellant designs. But even the ones that aren’t are using later 

versions of ammonium nitrate, for the most part, at this point. 

Senator BLUMENTHAL. Have you tested these new designs? 

Mr. KENNEDY. Yes, sir, we have. 

Senator BLUMENTHAL. How rigorously? 

Mr. KENNEDY. Very rigorously. And most of them have been in 

production for a number of years. 

Senator BLUMENTHAL. Have they shown signs of moisture? 

101 

Mr. KENNEDY. Not to my knowledge, sir. 

Senator BLUMENTHAL. But you are continuing to use ammonium 

nitrate. 

Mr. KENNEDY. Yes, sir. We are continuing to use phase-stabilized 

ammonium nitrate. 

Senator BLUMENTHAL. And, Mr. Kunselman, that is one of the 

reasons why you are going to TRW, correct? 

Mr. KUNSELMAN. Thank you. 

As I stated, the path to the TRW inflator was fortuitous because 

it fit the inflation characteristics in our car and provided me with, 

absent a root cause, the most confidence that it would be a permanent solution. 

Senator BLUMENTHAL. Well, I think that is a very genteel and 

nice way of saying you want a safe propellant and so you are going 

with a company that does not use ammonium nitrate. Correct? 

Mr. KUNSELMAN. That is accurate. 

Senator BLUMENTHAL. Mr. Kennedy, your company filed for a 

patent in 2006 that, in effect, demonstrated the knowledge of moisture’s effect on ammonium nitrate, correct? 

Mr. KENNEDY. I am sorry, I am not involved in the patents on 

inflators, Senator, but if you give me a little more information, I 

might be able to comment. 

Senator BLUMENTHAL. I will give you information that is available to all of us, which is that your company explained that moisture could seep into the inflator and might cause the propellant to 

become more unstable. It said that numerous times. 

It filed for a patent back in 2006 that demonstrated it was aware 

of that problem in that year, correct? 

Mr. KENNEDY. Well, again, I am not familiar with the patent you 

are referring to, but I can tell you that moisture seepage into any 

inflator is a known issue, and moisture in particular with ammonium nitrate is a known issue. And that is why we have addressed 

that in our designs and in our manufacturing processes. 

Senator BLUMENTHAL. Are you familiar with the chemical known 

as desiccant? 

Mr. KENNEDY. Yes, sir. Yes, Senator, I am aware of desiccant. 

Senator BLUMENTHAL. At what point did Takata begin to add 

desiccant to its—— 

Mr. KENNEDY. I believe it was—it was in that timeframe that 

you had mentioned there. I think 2007, 2008. 

Senator BLUMENTHAL. And the reason it added desiccant was to 

reduce the effects of moisture in making the ammonium nitrate 

more unstable. 

Mr. KENNEDY. Well, there were a number of changes that were 

made—we call them X series inflators. There was a number of design changes that were made in the X series inflators in that timeframe. The propellant formulation was changed, desiccant was 

added, a number of the other components were updated. It is just 

part of what—in Japan, they call it ‘‘kaizen’’; it is continuous improvement. We are constantly looking at ways to improve the 

parts. 

And in those particular parts, on the passenger side we were 

able to shrink the size of the inflator by 10 millimeters, which 

saved weight and saved space in the vehicle that helped meet 

102 

CAFE requirements and helped our customers meet their goals of 

weight reduction and performance improvements. 

Senator BLUMENTHAL. Continuous improvement? 

Mr. KENNEDY. Yes, sir. 

Senator BLUMENTHAL. Your term? 

Mr. KENNEDY. Yes, sir. ‘‘Kaizen,’’ that is what the Japanese call 

it. 

Senator BLUMENTHAL. ‘‘Kaizen’’—— 

Mr. KENNEDY. Yes, sir. 

Senator BLUMENTHAL.—in Japanese, sounds to me like a euphemism for trying to avoid exploding airbags. 

Mr. KENNEDY. No, sir, not at all. I disagree. Like I said, it was 

a continuous improvement to improve the product. I think every 

manufacturer of every product is—— 

Senator BLUMENTHAL. How did it improve the product, besides 

avoiding the propellants exploding as a result of moisture? 

Mr. KENNEDY. Well, as I said, there were a number of changes 

that were implemented into the inflators at that time. The addition 

of desiccant was one of them. It allowed us to make the inflators 

smaller; it allowed us to make the inflators lighter. I mean, those 

were all things that we are always looking to do. 

Senator BLUMENTHAL. Isn’t it fair to say that one of the reasons 

for that continuous improvement was the presence of moisture inside the inflator? 

Mr. KENNEDY. Well, as I said, moisture in any inflator is a problem. And every inflator has leak paths that allow moisture in, 

every inflator that is out there. I mean, at the end of the day, an 

inflator is full of holes in order to let gas come out. So if there are 

holes to let gas come out, there are holes to let moisture in. So it 

is an issue that every inflator manufacturer deals with. 

Senator BLUMENTHAL. Your new inflators, have they shown evidence of moisture? 

Mr. KENNEDY. I am not sure if I can answer that completely, 

Senator, because I don’t know that we have gotten parts back from 

the field on these newer ones and looked at that on every one of 

them. So I can’t—— 

Senator BLUMENTHAL. I thought your testimony here today was 

that they have been rigorously tested. 

Mr. KENNEDY. They have. They have. 

Senator BLUMENTHAL. But you don’t know whether moisture has 

been found in them. 

Mr. KENNEDY. I don’t know the answer to that specific question, 

Senator. 

Senator BLUMENTHAL. Where I am going here, Mr. Kennedy, essentially, is that there is a lot of evidence that ammonium nitrate 

is a root cause and that there may well need to be a recall of the 

recalls and continuing problems. 

GM at least redesigned and remanufactured the defective product that caused deaths on the road as a result of the defective ignition switch. But the continued use of ammonium nitrate leads me 

to believe there may well need to be a recall of the recall parts. 

Mr. KENNEDY. Well, that is why as part of the consent order we 

have agreed to continue to test the remedy parts. We have continued all of our efforts, internal and external, with the consortium 

103 

of OEMs that Mr. Kunselman mentioned, with individuals OEMs, 

automakers, that are doing their own testing. 

We have not stopped anything, Senator, in relation to this issue. 

We are continuing to look, and we are continuing to look everywhere, to make sure that we understand this issue. 

Senator BLUMENTHAL. Good. 

Have you issued—I just have one more question—two more questions. 

The CHAIRMAN [presiding]. Well, yes, we need to keep moving, 

Senator. 

Senator BLUMENTHAL. And I have been actually asking a few 

extra questions because I knew my colleague Senator Klobuchar 

was going to be here. 

Senator KLOBUCHAR. Oh, yes. You are so kind. Thank you. 

Senator BLUMENTHAL. Let me ask Mr. Schostek: Would you commit to supporting a bill that I have offered, S. 900, that requires 

used car dealers to repair any outstanding safety recalls prior to 

selling or leasing them? 

Mr. SCHOSTEK. Senator Blumenthal, we do support that concept. 

Right now, Honda dealers sell both new cars and used cars, and 

we expect those recalls to be taken care of before the used cars are 

sold. They may have a product from another manufacturer on the 

lot; similarly a Chrysler dealer and so forth. And then there are 

independent used car dealers. 

We would like to discuss about the need to ensure the responsibility of the OEM to make sure that repair is completed and who 

is effecting the repair. But, most definitely, sir, we support the concept. 

Senator BLUMENTHAL. Because I know you have reached out to 

two of the Honda owners who were affected here, but you couldn’t 

contact them because they had bought the car used, correct? Carlos 

Solis and Hien Tran both died as a result of this product. 

Mr. SCHOSTEK. Indeed, Senator. The unfortunate aspect of the 

fatalities that have been experienced in our vehicles are—these are 

older-model vehicles; they have tended to change hands, sometimes 

through used car dealers, independent used car dealers, and we 

have not been able to contact the appropriate parties. So we definitely support the concept. 

Senator BLUMENTHAL. Thank you. 

Thanks, Mr. Chairman. 

The CHAIRMAN. Senator Klobuchar? 

Senator KLOBUCHAR. Thank you very much, Mr. Chairman. I will 

be brief here. 

Mr. Kennedy, last November, as evidence emerged that the airbags might be susceptible in regions outside of high-humidity climates, I called on an expanded recall. In December of last year, 

Takata responded to NHTSA’s recall request letter stating that it 

firmly believed that the data and currently available information 

did not support a nationwide recall. 

What information did Takata have last month that it didn’t have 

earlier that triggered the expanded recall? 

Mr. KENNEDY. Senator, that is a great question, and I would be 

very happy to answer that. 

104 

We have much, much more test data now than we had before. 

We have completed—I checked last night, and, as of last night, 

over 57,000 deployment tests, most of those in the last 6 months, 

that have really helped us to understand where these issues are 

and what is causing them. 

And we don’t have definitive root cause, but also in that timeframe we had a 2-day meeting at our inflator facility, where we 

brought all of the NHTSA people in and their experts and we had 

our third party, Fraunhofer, report directly to them. It was not filtered by Takata at all. We did the same thing with the OEMs affected. 

We have continued to work with a number of other outside experts, as I mentioned earlier: Penn State University, Georgia 

Tech—— 

Senator KLOBUCHAR. But it is just that this goes back to, what, 

2006? And I am glad you have done this, but it seems like such 

a long period of time, and we have heard so many different explanations for the cause of the defect. Why the different explanations, 

and why did all of this take this long, nearly 10 years, to get done? 

Mr. KENNEDY. Well, Senator, there has been a lot done in those 

10 years. There has been a number of recalls that have been 

issued, starting I believe in 2008 was the first one. So we have participated and supported multiple recalls in that timeframe. 

And it was really just on this latest issue that really got started 

in 2013. End of 2013 was when the first incident outside of previous recall populations occurred. And—— 

Senator KLOBUCHAR. OK, so—go ahead. 

Mr. KENNEDY. I am sorry. 

Senator KLOBUCHAR. Now with this major recall that you have 

decided to undertake, with a lot of prodding I will say, and it is 

going to involve, you know, a lot of vehicles, how do you prioritize 

these vehicles in terms of getting fixed? Is it geographically? Is it 

by the age of the vehicle? How are you going to triage this? 

Mr. KENNEDY. Yes, that is, again, a very good question and one 

that was contemplated in the defect information reports. 

And it varies by design somewhat. The driver-side ones, where 

we have had the most issues in the field, those are being 

prioritized based on location. And that would be a location of where 

they are currently registered, originally registered, or ever registered. Some of the other ones are prioritized by age. 

And, as Administrator Rosekind mentioned in his testimony, that 

is part of the consent order that we have agreed to. They call it 

the coordinated remedy. And we will be working with NHTSA and 

all of the automakers in order to do that prioritization and to increase supply so we get the right parts to the right owners at the 

right time. 

Senator KLOBUCHAR. And then how many replacement parts is 

Takata producing every month? 

Mr. KENNEDY. As of a couple days ago, we passed 5 million replacement kits. I think this month we will probably produce close 

to 700,000—— 

Senator KLOBUCHAR. And how many are there going to be total 

that you need to have? 

105 

Mr. KENNEDY. Well, the total replacement—again, the numbers 

of a little bit elusive, but somewhere in the 32 million range. 

Senator KLOBUCHAR. Wow. 

Mr. KENNEDY. That is vehicles that were ever manufactured, so 

some of those still may not be on the road. 

Senator KLOBUCHAR. OK. So how long do you think it will take 

to do that? 

Mr. KENNEDY. Well, we are going to be at a million units a 

month here very shortly. We have already done 5 million. That 32 

million assumes that actually all of those vehicles are still on the 

road, and we know vehicles that are 15 years old, a number of 

those are not on the road still. So it will be somewhat less than 

that. 

Senator KLOBUCHAR. OK. 

Just one last question here, because I want to keep in my time 

limit. 

Mr. Kunselman, Mr. Schostek, how many affected Honda and 

Chrysler vehicles have received replacements? 

Mr. KUNSELMAN. Have received replacements? 

Senator KLOBUCHAR. Yes. 

Mr. KUNSELMAN. On the driver side, we had just shy of 50,000 

units that were replaced with a like bag. And we have now implemented a recall where we will replace with a TRW inflator. 

Senator KLOBUCHAR. OK. 

Mr. KUNSELMAN. So those are just in its infancy, maybe 1,000 

units so far. It was just released on June 8. 

Senator KLOBUCHAR. OK. 

Mr. Schostek? 

Mr. SCHOSTEK. Yes, Senator, we have replaced nearly 2 million 

inflators, Takata inflators, in our vehicles. 

Senator KLOBUCHAR. OK. Very good. So it sounds like there are 

going to be a lot more. They are not all your vehicles, obviously, 

but more to come. 

All right. Thank you very much. 

The CHAIRMAN. Senator Nelson has one question to ask, so he 

will be back in here momentarily. 

So, until he gets back, let me ask our manufacturers if your companies or other auto manufacturers are looking into what role, if 

any, the vehicle design may have played with regard to persistent 

high humidity affecting the performance of the airbag inflators. 

And, if so, what have you learned? 

Mr. SCHOSTEK. Mr. Chairman, I will answer that first. You are 

referring to the report recently that Takata is mentioning a theory 

about the vehicle design. I think this is mainly on the passenger 

side, not the driver side, where this theory of theirs is grounded. 

We have not received much information from Takata about this 

vehicle design theory, and when we do, we will be happy to look 

into it. But we have not begun a study of our own on that idea. 

Mr. KUNSELMAN. I would reiterate that. We are not doing our 

own study on that. We are aware of Takata seeing this trend in 

the data and are asking the ITC if they see a similar trend based 

on the parts that have been tested coming from the field. 

The CHAIRMAN. OK. 

Senator Nelson? 

106 

Senator NELSON. Just one quick question, Mr. Schostek. Do you 

think that rental car companies should be prohibited from leasing 

vehicles under recall until they are fixed? 

Mr. SCHOSTEK. Thank you, Senator Nelson. 

I am aware of S. 2819, the Rental Car Recall Act, that would prohibit rental car companies from renting if they had—we are in support of that concept, Senator. We support the concept. 

The young woman who lost her life in southern California was 

driving a Honda vehicle that she rented from an agency in the San 

Diego area. 

Understand, from our business model, Senator, Honda, we do not 

sell to fleets, so we don’t sell to big rental car companies such as 

Hertz, Avis, and so forth. But, nevertheless, there are Honda vehicles that end up in rental car inventory. Our dealers might sell to 

one of those large rental car companies, but, of course, the small 

rental car companies also might buy our vehicle on the used market. 

We strongly support the concept that they should be fixed before 

they are rented to a customer. And if that had happened in the 

case of the young women in southern California—who, by the way, 

we notified the auto auction that owned the vehicle before the rental car agency bought it, and we also notified the rental car agency, 

and neither of them took that repair. It is to our everlasting regret 

that that had an impact in this incident. 

Senator NELSON. Thank you. 

The CHAIRMAN. Thank you, Senator Nelson. 

Well, I would just point out that the hearing record is going to 

remain open for 2 weeks, during which time Senators are asked to 

submit any questions for the record. 

Upon receipt, the witnesses are requested to submit their written 

answers to the Committee as soon as possible. 

I want to thank our panelists, our witnesses here today for your 

testimony, and for your responses. It continues to shape the record 

that we build with regard to this very important issue which has 

had life-and-death consequences for people across this country. And 

we want to make sure that we are doing everything we can to get 

the accountability and provide, hopefully, the solutions that will 

prevent this sort of thing from ever happening again. 

With that, the hearing is adjourned. Thanks. 

[Whereupon, at 12:34 p.m., the hearing was adjourned.] 

(107) 

A P P E N D I X 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. JOHN THUNE TO

HON. MARK R. ROSEKIND

Question 1. Does NHTSA have a way to track how many visitors have been to 

safercar.gov and, on average, how many visit the site every day? If so, what are 

those numbers? 

Answer. Yes, NHTSA can track how many visitors have been to safercar.gov. For 

example, the three month period of April to June, 2015 averaged approximately 

132,000 visits per day. 

a. How does this compare to the use of manufacturers’ sites for safety recall information? 

Answer. NHTSA does not collect or have information regarding visits to manufacturers’ websites. 

b. Does NHTSA have any information on what percentage of Americans know 

about safercar.gov? 

Answer. Based on qualitative analysis from focus groups conducted for consumer 

outreach in support of the Office of Defects Investigation, the agency has found that 

generally Americans have a low awareness of safercar.gov. In order to increase 

awareness of safercar.gov NHTSA has completed and/or is planning to execute the 

following: 

• Direct consumers to safercar.gov from all public-facing information, e.g., ads, 

videos, advisories; 

• Promote safercar.gov through the safercar mobile app; and, 

• Launch a national consumer awareness campaign to increase the submission of 

complaints as well as recall compliance and use of the VIN Look-Up Tool. 

Question 2. In your testimony, you mention that 32 million vehicles have been recalled due to defective Takata inflators. Some have raised concerns that this number may include duplications, for instance, if a particular vehicle is subject to both 

the driver side and the passenger side recalls. How did NHTSA calculate this number and verify its accuracy? Is this still the number of vehicles subject to recall as 

of today? 

Answer. The original estimate of 32 million vehicles was based on information 

provided by Takata. In an initial effort to verify this figure NHTSA tabulated the 

total number of recalled inflators from all the Takata related recalls, and the results 

were consistent with Takata’s estimate. At the time of the hearing, this was the best 

available information. 

NHTSA recognized that the estimate would need to be refined once the automakers determined the actual number of inflators and vehicles involved by VIN. As 

part of the Coordinated Remedy Program, NHTSA requested by July 9, 2015 a detailed breakdown of the recalled vehicle data by make, model and model year. In 

reviewing this data, Takata reported that its original estimate included inflators 

slated for foreign markets. In addition, NHTSA finally was provided more specific 

information indicating the number of vehicles containing both defective driver and 

passenger side inflators. Using the automakers’ detailed responses NHTSA has determined that approximately 23.4 million total inflators in approximately 19.3 million vehicles are affected. These figures include all prior Takata recalls from 2008– 

2015. The attached chart identifies the breakdown of the recalled inflator position— 

both driver air bag (DAB) only, or passenger air bag (PAB) only, by each automaker. 

a. What is the number of vehicles subject to both the defective driver side and 

passenger side air bag recalls? 

Answer. Based on the most recent data acquired through the Coordinated Remedy 

Program the number of vehicles subject to both driver and passenger recalls is approximately 4.1 million. 

108 

ATTACHMENT (QUESTION 2) 

Question 3. NHTSA’s Workforce Assessment states that the ‘‘New Paradigm’’ will require $89 million in funding, which apparently doesn’t include the additional 380 

new full time equivalent employees (FTEs) for the Office of Defects Investigation 

alone. What is the funding request estimate including costs for the requested increase in FTEs? 

Answer. The Workforce Assessment responds to a previous commitment to the 

U.S. Department of Transportation’s Office of Inspector General to assess NHTSA’s 

workforce in light of the breathtaking advances in vehicle technology. The Workforce Assessment was not intended to match the President’s FY 2016 budget, which 

was issued before the Workforce Assessment was completed. Rather, the Workforce 

Assessment is a comprehensive examination of the defects investigation system we 

need to build, and can build incrementally with resources from Congress that commits to a vehicle safety system as robust as those that keep our skies and railways 

safe. The total cost would be approximately $149 million. This estimate includes $89 

million identified in NHTSA’s Workforce Assessment and $60 million for the estimated cost for the 380 positions, which is based on an average cost of $157,000 (includes salaries and benefits) for each FTE. 

Question 4. NHTSA’s Workforce Assessment was conducted pursuant to a 2011 

recommendation by the Department of Transportation Office of Inspector General 

(OIG). NHTSA hired an outside contractor to conduct the assessment, which began 

in July 2013. 

a. When did NHTSA receive the contractor’s written assessment? 

Answer. NHTSA received the contractor’s final written assessment in February 

2014. 

b. How much did it cost the agency to conduct this assessment? 

Answer. The contractor was under contract to perform multiple tasks, including 

the workforce assessment. The cost of the entire contract was approximately 

$424,000. The cost to conduct the workforce assessment was about $147,000. 

c. Why did it take until June of 2015, four years after the OIG recommendation, 

for NHTSA to issue this assessment? 

Answer. The workforce assessment was initiated prior to the GM and Takata recalls. Therefore, completion of the assessment was extended due to additional work 

conducted by the agency, including a business assessment, to produce a more comprehensive evaluation. While the contractor’s final written assessment met the minimum contract requirements the final product did not fully capture all the current 

and future business needs of ODI or other offices that directly support the defects 

investigation program. As a result, the report was reworked to reflect lessons 

learned from these events in order to adequately reflect workforce needs given the 

large increase in recalls and consumer complaints. 


623MRRQ1.eps
109 

RESPONSE TO WRITTEN QUESTION SUBMITTED BY HON. BILL NELSON TO

HON. MARK R. ROSEKIND

Question. Administrator Rosekind, you said at the hearing that NHTSA is currently implementing 44 actions to ensure that ODI does not miss the next GM ignition switch defect or the next Takata airbag crisis and that the list would be provided to the Committee. Please list the 44 actions. 

Answer. NHTSA continuously seeks to enhance our processes and procedures, as 

demonstrated by the attached list of process improvements and our recently published Path Forward report. The list of process improvements continues to grow and 

now includes 45 distinct actions implemented and initiated. 

NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION

DEFECT AND RECALL SYSTEM IMPROVEMENTS

The following improvements in NHTSA’s defects and recalls system have been implemented or initiated in response to a variety of efforts. These include the 2011 

Office of the Inspector General Report, NHTSA’s Path Forward and Workforce Assessments reports, and the 2015 OIG Report. These improvements include actions 

that directly address 10 of the 17 2015 OIG recommendations. 

Oversight of System Improvements—As recognition of the need for ongoing evaluation and improvement, NHTSA devised a mechanism for tracking implementation 

and applying improvements Agency-wide. 

1. NHTSA’s Risk Control Innovations Program will monitor, track and review 

system improvements and apply the methodology and enhancement Agencywide, where appropriate. 

Workforce Assessment and Training—Improving the NHTSA’s ability to identify 

safety defects and manage recalls requires investments in the Agency’s people as 

well as improvements to the defect-recall system. 

2. NHTSA developed a training plan to assist the organization in the development of its current and future workforce to ensure continuity of institutional 

knowledge, and to ensure that Office of Defect Investigations (ODI) staff is 

made aware of and become proficient in new automotive, investigative, and 

vehicle safety technologies. 

3. At OIG’s recommendation, NHTSA hired a contractor to conduct a workforce 

assessment to determine the number of staff required to ensure that ODI met 

its objectives and determined the most effective mix of staff to improve defects 

analysis in the future. In November 2014, ODI conducted its own workforce 

assessment to supplement the contractor’s efforts in order to address the 

staffing and resource needs required to meet growing defects analysis needs 

in light of several high profile recalls. This effort also strategically assessed 

the needs and expectations of the defects program, and set a vision of how 

NHTSA will improve its defects management process. 

Improved Tracking and Documentation—NHTSA implemented processes and documentation requirements to improve the tracking of defect issues and investigations, to provide consistent rules for reconsideration, and to provide records of decisions that can inform future investigations. NHTSA is currently establishing new 

documentation requirements in response to the 2015 OIG recommendations. 

4. NHTSA added a new process to require its investigators to provide office director briefings prior to exceeding the ODI guidance for investigation 

timelines. The briefing must include justification for the additional time along 

with an action plan to bring closure to the issue. 

5. NHTSA implemented a system to track complaints relevant to each investigation. 

6. NHTSA began systemically tracking pre-investigation work. 

7. NHTSA created standardized forms and a repository to document Defects Assessment Panel meetings and decisions. 

8. NHTSA created a standardized process and an Investigation Documentation 

Checklist for storing evidence and investigation documents. 

9. NHTSA is developing rules that require the defect assessment panel to revisit 

an issue if certain criteria are met. This action responds to 2015 IG Recommendation No. 16. 

110 

10. NHTSA is developing a plan to improve reviews of vehicle owner complaints. 

This action responds to 2015 IG Recommendation No. 11. 

11. NHTSA is developing procedures to improve documentation of the outcomes 

of weekly meetings where pre-investigative issues are discussed. This action 

responds to 2015 IG Recommendation No. 13. 

12. NHTSA is defining appropriate timeframes for opening an investigation and 

a process for justifying departures from these timeframes. This action responds to 2015 IG Recommendation No. 17. 

Improved Information Collection—NHTSA is addressing ways to improve the 

quality and the focus of information it receives, and to streamline the analysis of 

that data. 

13. NHTSA is working on ways to facilitate consumers’ provision of more complete information to the agency through the Vehicle Owner’s Questionnaire 

(‘‘VOQ’’) process, including offering more flexibility in how consumers can describe their complaint and making it easier to upload supporting documentation and pictures related to the complaint. This action responds to 2015 IG 

Recommendation No. 6. 

14. NHTSA has initiated efforts to provide more clarity to manufacturers about 

Early Warning Reporting (EWR) requirements. NHTSA will support manufacturers’ efforts to implement best practices to comply with their obligations to 

provide complete EWR data. This action responds to 2015 IG Recommendation 

Nos. 1, 2, and 3. 

15. NHTSA implemented revised procedures for Death and Injury (DI) reports, 

requiring manufacturers to provide their opinions and theories about the 

cause of an incident or accident. NHTSA is following up on all reports involving fatalities. In addition, where related litigation is initiated, NHTSA will require the manufacturer to provide copies of documents reflecting the final disposition of the lawsuit. 

16. NHTSA is developing a dedicated outreach and reporting system for law enforcement involved with crash responses as a communication channel to not 

only collect information, but give feedback to the submitter. Based on lessons 

learned from this initiative, ODI may also broaden the plan to include communities such as EMS and insurance adjustors/investigators. This action responds to 2015 IG Recommendation No. 12. 

Improved Collaboration and Assessment—ODI will continue to leverage expertise 

from throughout the Agency when assistance is needed, specifically if research is required or when additional real-world crash data can inform defects assessments or 

investigations. The Agency will be challenging automatic assumptions and request 

assistance from manufacturers and suppliers when necessary. 

17. NHTSA now has research engineers from NHTSA’s Vehicle Research and 

Test Center (VRTC) regularly participate in Defect Assessment Panels. 

18. NHTSA hosted an international Enhanced Safety of Vehicles conference, with 

a special session on enforcement-related issues. Nine countries participated in 

the event, and they agreed to establish a worldwide network for enforcement 

information of mutual interest. 

19. NHTSA established a process for determining when a third-party or the 

VRTC should be used to verify manufacturer information or to assist in identifying a potential defect. 

20. NHTSA now formally involves VRTC vehicle research engineers in pre-investigative activities to research unfamiliar or technically complex potential safety hazards by conducting high level research and basic tests to better understand these systems. 

21. NHTSA has implemented a number of new initiatives and efforts to enhance 

coordination between ODI and other NHTSA crash investigation programs. 

For example, the Special Crash Investigations office (SCI) is now included as 

an active participant in ODI’s decisions about initiating formal investigations. 

This action responds to 2015 IG Recommendation No. 12. 

22. When ODI is monitoring a high-hazard issue but has insufficient evidence of 

a possible defect to warrant opening an investigation, or where something 

that appears to be an unlikely explanation has been posited, NHTSA will now 

reach out to the relevant vehicle manufacturer (OEM). This communication 

will be documented as a pre-investigative notification of interest, creating a 

record that NHTSA has informed the OEM of the issue and reiterating the 

OEM’s responsibility to provide relevant and timely information about the 

111 

issue to the agency, including information critical to the potential safety system interactions of the issue. This action responds to 2015 IG Recommendation No. 15 

23. NHTSA’s Office of Vehicle Safety Research and ODI are working together to 

increase and expand meetings with the automotive industry in order to enhance NHTSA’s working knowledge about new and emerging technologies and 

the interrelationships between vehicle systems. Based on these meetings with 

manufacturers, NHTSA is developing an additional set of inquiries to be used 

during screening and investigating new safety systems. 

24. NHTSA began to specifically request EDR data from manufacturers, vehicle 

‘‘health check’’ files, and downloads from any related sub-modules. NHTSA is 

currently requesting that automakers provide detailed information on what 

additional data is available on vehicles that could be helpful in assessing potential safety defects. 

25. NHTSA is expanding previous efforts to apply an enhanced systems safety approach to the analysis of defects, considering whether one possible defect is 

a symptom of another system failure. 

26. Using the computerized Corporate Information Factory (a suite of software 

tools to improve organizational efficiency in predictive analysis, data visualization, case management, customer-driven communication, and program 

planning), NHTSA continues to increase its efforts to more effectively utilize 

and cross-reference Early Warning Reporting (EWR) data, Death and Injury 

(DI) reports and inquiries, SCI investigation reports, and other data from 

manufacturers and the public that may provide critical details about incidents 

and vehicles. 

27. NHTSA is developing a common system data standard that is paired with a 

centralized database (called the vPIC-List) for information obtained from 

manufacturers associated with Vehicle Identification Number (VIN) requirements and Manufacturer Identification Requirements. 

Improved Enforcement 

28. When NHTSA finds that an OEM has failed to meet its obligation for a timely 

recall, the agency considers enhanced oversight, as it has done in recent consent orders for GM and Hyundai. In addition, NHTSA is exploring mechanisms to have manufacturers conduct regular audits of their internal processes for finding potential safety defects, and ensure that failures identified 

during these audits lead to consequences appropriate to the findings. 

Improved Outreach to Consumers—Defect identification is only the first step in an 

effective recall system. Unless the recalls are remedied, unsafe vehicles remain on 

the road and a risk to drivers and passengers. NHTSA has implemented new and 

better ways to notify consumers of defects and continues to identify ways to improve 

recall completion rates. 

29. NHTSA implemented a subscription service to allow consumers to receive email alerts when the make and model of their vehicle has an active recall. 

30. NHTSA developed and implemented the SaferCar mobile application for 

Apple products that provides real-time vehicle safety information and allows 

consumers to file complaints, register for recall notifications, locate child seat 

inspection stations, and search 5-Star safety ratings. 

31. NHTSA recently expanded the SaferCar mobile application to Android 

phones. 

32. NHTSA now requires new, distinctive recall labels on mailings that notify 

owners of recalled vehicles or equipment. 

33. NHTSA developed a VIN Lookup tool that allows consumers to search electronically for open recalls on their vehicles using their VIN number. 

34. NHTSA made it possible for Manufacturers to file recall reports electronically 

via manufacturer submission portals. 

35. NHTSA hosted the first of a series of industry meetings, Retooling Recalls, 

where NHTSA will define an issue in need of collaborative effort and facilitate 

the sharing of best practices. 

36. NHTSA recently launched a recalls spotlight web page dedicated to information specific to breaking news and trending recalls. 

37. NHTSA created a recalls-specific account on Twitter (@NHTSArecalls) to alert 

followers and consumers about vehicle, tires, car seats, and equipment recalls. 

112 

38. NHTSA released a recalls process video educating consumers on how recalls 

notices are sent and that recalls repairs are free of charge. 

39. NHTSA will produce a VIN Look-Up Demonstration (July 2015). 

40. NHTSA plans to launch a Recalls Consumer Awareness Campaign (Fall 

2015). 

a. Messages and Goals of the Campaign include: 

i. To encourage consumers to use the VIN Look-Up tool 

ii. To urge consumers to comply with recall notices 

iii. To have consumers sign up for recall alerts 

b. The Campaign will include online advertising and a suite of informational 

videos. 

41. NHTSA will implement an enhanced e-mail engagement process to allow consumers who file complaints or sign up for e-mail alerts to stay informed of 

news affecting their vehicles. The existing infrastructure already allows 

NHTSA to reach consumers via e-mail with a list of recalls within a given 

time period. 

42. NHTSA revised its current e-mail engagement language to inform consumer 

expectations of how complaints will be handled and what will happen in the 

event of a vehicle recall. 

43. Using analytics tools, NHTSA identified the top online automotive websites 

used by consumers as an additional source of consumer complaints to identify 

potential defect trends. They include KBB.com, Edmunds.com, and Cars.com. 

NHTSA has built relationships with these and other organizations for purposes of sharing new vehicle safety content. 

44. Presently, manufacturers’ defect reports are technically focused, making them 

of limited use to consumers, who need this information most. NHTSA has established a defect report review process that will ensure that consumers are 

receiving recall information in comprehensible plain language and format. 

Protecting Confidential Consumer Information 

45. NHTSA now requires a second level of review to ensure that confidential information collected from manufacturers is redacted prior to web mounting. 

RESPONSE TO WRITTEN QUESTION SUBMITTED BY HON. JOHN THUNE TO

HON. CALVIN L. SCOVEL III 

Question. Based on your audit of NHTSA’s Defect Identification and Investigation 

process, what are the problems with NHTSA’s statistical practices? What could statistical analyses of TREAD Act data provide that NHTSA’s analyses cannot? 

Answer. Sound statistical analyses of TREAD Act data could point NHTSA personnel to the automotive defects most warranting further investigation. They could 

do this by identifying which data trends and outliers are statistically significant, 

meaning they are unlikely to have appeared through random variation. This focusing of agency attention could increase the likelihood of early identification of safety 

defects and support efficient use of agency resources. 

NHTSA’s current statistical analyses cannot achieve these ends because the agency omits critical steps in standard statistical practice when analyzing TREAD Act 

aggregate data. Those steps involve developing a base case of what statistical test 

results should look like in the absence of anomalies, against which actual test results can be compared. NHTSA calculates results from a variety of tests, but does 

not develop a base case against which to compare any of them. Consequently, agency personnel have no way of knowing which, if any, of the results from the different 

tests were unlikely to have occurred by chance. Instead, they use ad hoc approaches 

to determining which test values they consider indicate a defect warranting further 

investigation. 

Sound statistical practice also involves periodically assessing the predictive performance of the analytical methods used. This enables adjustment and refinement 

of the methods, leading to improvements in accuracy over time. NHTSA has not 

checked the ability of its analyses of TREAD Act aggregate data to identify safety 

defects since their implementation, let alone addressed issues of their accuracy. 

113 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. JOHN THUNE TO

KEVIN M. KENNEDY

Question 1. In your testimony, you stated: ‘‘In addition to supporting these ongoing testing efforts, we are continuing to support the work of the independent Quality Assurance Panel, led by former Secretary of Transportation Samuel K. Skinner, 

to ensure that best practices are in place for the production of safe inflators. We 

are committed to adopting the recommendations his panel puts forth, and sharing 

the findings of the report with you and with the public.’’ 

Question 1a. What is the progress of the Quality Assurance Panel to date? 

Answer. The Quality Assurance Panel has completed reviews of, and site visits 

to, Takata’s facilities in Armada, Michigan, Moses Lake, Washington, and Monclova, 

Mexico. The Panel is planning to visit Takata’s facilities in Japan in August 2015. 

Takata has assisted, and continues to assist, the Panel by regularly providing requested information and producing relevant personnel for interviews. Takata understands that the full Panel has met on several occasions and plans to meet regularly 

on an ongoing basis to review collected data, evaluations and recommendations. 

Question 1b. Have you changed any production practices since the recalls began? 

If so, what and when? 

Answer. Takata continually acts to strengthen and improve its manufacturing and 

production processes. However, because the Panel has to date not issued a report 

or recommendations on how Takata may improve its production practices, Takata 

has not altered its production practices as a result of the Panel’s ongoing review. 

Question 1c. When can we expect the Panel to complete its report, and when can 

we expect the report to be provided to the Committee? 

Answer. Takata’s current understanding is that the Panel expects to complete its 

report by November 2015. Takata intends to make the Panel’s report available to 

the Committee and the public when it is issued. 

Question 2. How many recalled inflators has Takata obtained from the field to 

date? 

Answer. As of July 27, 2015, Takata has received from automobile manufactures 

approximately 3,600,000 inflators that they have collected from recalls and other 

safety campaigns. 

Question 2a. How many returned inflators has Takata tested thus far? 

Answer. As of July 27, 2015, Takata has tested approximately 97,000 returned inflators, including conducting approximately 70,000 ballistic tests, 15,000 live dissection tests and 12,000 CT scans. 

Question 2b. How many inflators does Takata expect to collect each month going 

forward? 

Answer. Takata currently expects to receive from automobile manufacturers approximately 500,000 inflators per month on an ongoing basis. 

Question 2c. How many inflators has Takata provided to other entities for testing, 

as directed under the preservation order? 

Answer. Pursuant to the Preservation Order and Testing Control Plan dated February 25, 2015 (‘‘Preservation Order’’), Takata has provided recalled and/or returned 

inflators to NHTSA, an automobile manufacturer, and a consultant retained by 

automobile manufacturers. As of July 27, 2015, Takata has provided approximately 

2,073 recalled and/or returned inflators to those parties for testing. 

Question 2d. To which entities has Takata provided inflators for testing? 

Answer. As of July 27, 2015, Takata has provided inflators to Toyota, NHTSA and 

Orbital ATK for testing pursuant to the Preservation Order. 

Question 2e. Does Takata plan to test a certain percentage of the recalled inflators? If so, what is that percentage? 

Answer. Takata’s testing program is not designed to test to a target percentage, 

but rather Takata intends on testing to its full capacity until it determines the root 

cause of rupturing inflators. Since September 2014, when Takata began receiving 

from automobile manufacturers inflators collected pursuant to the regional safety 

campaign, Takata expanded its testing capacity from approximately 1,000 inflators 

per month to its current testing capacity of between 16,000 and 20,000 inflators per 

month. 

Question 2f. Has Takata received any testing results thus far? 

Answer. Takata has compiled, and continues to compile, results from its own testing program and reports those results on a regular basis to NHTSA and the automobile manufacturers. Takata has provided prior summaries of its test results to 

the Committee. To date, Takata has not received test results from the other parties 

who are testing returned inflators. 

114 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. BILL NELSON TO

KEVIN M. KENNEDY

Question 1. At the current pace of production, how long do you anticipate it will 

take Takata (and other airbag manufacturers) to produce sufficient replacement 

parts to cover all recalled vehicles? 

Answer. Takata has taken significant steps to increase its capacity to produce replacement inflators and kits and it is currently in the process of further increasing 

its production capacity. Similarly, Takata has significantly increased the number of 

replacement inflators manufactured by third parties that it is supplying in replacement kits. In May 2015, Takata produced approximately 730,000 replacement inflators and 1,167,000 replacement inflator kits, which contain inflators manufactured 

by Takata and third-party manufacturers. In June 2015, Takata produced approximately 830,000 replacement inflators and 1,450,000 replacement inflator kits, which 

also contain inflators manufactured by Takata and third-party manufacturers. 

Takata estimates that, by October 2015, it will have the capacity to produce approximately 850,000 replacement inflators and 1,900,000 replacement inflator kits 

per month, subject to its ability to obtain the necessary components from third-party 

suppliers. In addition, once Takata’s ongoing expansion of production lines is completed (which Takata expects to occur by February 2016), its global monthly production capacity for replacement inflators will increase to approximately 1,200,000. 

To date, Takata’s production capacity for replacement inflators and replacement 

inflator kits has been sufficient to meet the demands of automobile manufacturers. 

Takata, however, cannot currently estimate the date by which it will be able to 

produce or supply sufficient replacement inflator kits to cover all recalled automobiles as the number of necessary replacement inflators and kits will depend on, 

among other things, the demands of the automobile manufacturers, the number of 

recalled automobiles that are still on the road, and the coordinated remedy program 

being prepared jointly by NHTSA and the automobile manufacturers. 

Question 2. Please detail your current internal product safety audit program, including any external third-party audits. 

Answer. Takata’s current safety audit program in North America is designed to 

ensure that its propellants, inflators, and air bag modules are manufactured safely 

and correctly. Takata’s audit teams evaluate Takata’s practices with respect to, 

among other things, propellant handling, proper disposal of scrap material, on-site 

security, functionality of information systems, effectiveness of manufacturing processes, and compliance with Takata’s quality assurance policies and procedures. Specifically, Takata conducts internal quality audits, during which a team of auditors 

at each Takata factory conducts audits of processes within the factory on a weekly 

basis. These internal audits are documented and verified by the External Registrar 

during onsite visits every six months. In addition, the Horizontal Deployment 

Group, a subset of the Takata Corporate Quality Group, conducts monthly audits 

at each Takata plant for the purpose of confirming that prior issues have been effectively addressed and remedied. These audits also function as part of Takata’s document retention program. 

Takata also regularly retains third-parties to conduct independent audits of its 

safety and quality assurance practices. For instance, Takata hires third parties to 

conduct environmental, quality systems, and personal and workplace safety audits 

at its North American facilities. These audits confirm Takata’s compliance with 

quality systems as set forth by the ISO/TS–16949 Quality Standard. Takata has 

also engaged outside energetic materials expert and risk analysis consulting group 

Baker Engineering and Risk Consultants, Inc. (‘‘BakerRisk’’) to conduct several 

manufacturing and safety audits, including: (1) a review of manufacturing processes 

at Takata’s Moses Lake, Washington and Monclova, Mexico facilities between 2009 

and 2010; (2) a review of manufacturing and quality assurance processes at Moses 

Lake for 2004L propellant, including safeguards for handling storage of 2004L materials and finished propellant and mitigation of a potential accidental explosion at 

the facility, in 2011; (3) an audit of procedures at Monclova for receiving 2004L propellant and for quality assurance of new propellant, bulk storage of propellant, and 

material handling during assembly in the waste stream, in 2011; and (4) safety audits at Moses Lake and Monclova in 2013. In addition, Takata has engaged the 

International Center for Automotive Research to review its X-Series inflator manufacturing processes in Monclova in 2011 and to review 13X desiccant handling on 

Monclova inflator lines in 2012. Automobile manufacturers also routinely audit 

Takata’s manufacturing facilities. 

Finally, the Takata Product Testing Laboratories are accredited to the A2LA 

Standard, which confirms that the laboratories within Takata meet the industry 

standards for testing. 

115 

Question 3. In Takata’s statement in response to the Committee’s Minority staff 

report titled, ‘‘Danger Behind the Wheel: The Takata Airbag Crisis and How to Fix 

Our Broken Auto Recall Process,’’ Takata said that it has ‘‘convened an independent 

Quality Assurance Panel to conduct a comprehensive review to ensure Takata’s current manufacturing procedures meet best practices.’’ 

Question 3a. When was this Quality Assurance Panel established? 

Answer. Takata established the Quality Assurance Panel in December 2014. 

Question 3b. What instigated Takata to take this step? 

Answer. Takata is, and always has been, dedicated to public safety. Its primary 

mission is to make products that save lives and prevent injuries. Accordingly, 

Takata formed the Quality Assurance Panel as part of its response to field incidents 

involving rupturing Takata airbag inflators. The Quality Assurance Panel reflects 

Takata’s practice of continuously improving its products. 

Question 3c. What, specifically, is the role of this panel? What are its functions 

that were not part of Takata’s existing quality control programs? 

Answer. The purpose of the Quality Assurance Panel is to audit and prepare an 

independent report regarding Takata’s current manufacturing procedures for best 

practices in the production of safe inflators, including inflator propellant. The Quality Assurance Panel’s functions are not significantly different from those of Takata’s 

internal auditing program, but its independent status will hopefully provide Takata 

with input that will advance the safety of Takata’s manufacturing procedures, practices and policies. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. RICHARD BLUMENTHAL TO

KEVIN M. KENNEDY

Question 1. Are there any circumstances in which ammonium nitrate can become 

moist and remain safe for use in airbag propellants? What level of moisture in ammonium nitrate mixtures is sufficient to cause safety concerns—Is there a standard 

used by Takata to determine how much moisture is acceptable in its new inflator 

designs? 

Answer. All ammonium nitrate propellants, and indeed all propellants, contain 

some level of moisture. As such, all Takata PSAN-based inflators, whether new or 

old, contain moisture. The vast majority of those inflators have operated safely in 

the field. Takata is unable to quantify as a single number the level of moisture that 

is sufficient to cause safety concerns because that determination depends on the environmental exposure experienced by the inflator over its lifetime. For example, a 

certain level of moisture present in an inflator that spent a lifetime in a mild climate, like Seattle, will have a different effect than if the automobile resides in a 

high temperature climate, like Miami. Takata’s current field data suggests that 

moisture in mild climates, without persistent high temperatures, will not degrade 

the performance of the propellant. 

Question 2. At the hearing on June 23, 2015, you stated that you were unable 

to answer ‘‘completely’’ whether Takata’s newly designed inflators had shown evidence of moisture. What has Takata’s testing revealed regarding evidence of moisture in these inflators? 

Answer. Takata interprets the phrase ‘‘newly designed inflators’’ to refer to 

Takata’s inflators that contain the 2004L propellant. Takata is not currently aware 

of any incidents from either its manufacturing process (including related testing) or 

root cause analysis that would indicate that the 2004L propellant in its newly designed inflators may experience an alteration over time that could potentially lead 

to over-aggressive combustion in the event of an air bag deployment. Takata also 

conducted substantial internal induced moisture testing, which demonstrates that 

inflators with 2004L propellant perform better than inflators with 2004 propellant 

when exposed to the same level of moisture and aging. 

Furthermore, pursuant to the Consent Order dated May 18, 2015 between Takata 

and NHTSA (the ‘‘Consent Order’’), Takata has provided NHTSA with a proposed 

plan regarding the service life and safety of its non-recalled PSAN inflators, including those containing the 2004L propellant, which includes testing Takata that will 

perform to determine whether they are susceptible to over-pressurization and/or 

rupturing. 

Question 3. How has Takata determined what level of moisture in the newly designed inflators is safe? What assurance can Takata provide that aging of its new 

inflators will not lead to a second cascading crisis as moisture continues to infiltrate? 

116 

Answer. Takata conducted a battery of tests on its propellants to determine the 

level of moisture that is safe in its inflators. Takata is not currently aware of any 

incidents from either its manufacturing process (including related testing) or root 

cause analysis that would indicate that the 2004L propellant in its newly designed 

inflators may experience an alteration over time that could potentially lead to overaggressive combustion in the event of an air bag deployment. Furthermore, pursuant to the Consent Order, Takata has provided to NHTSA a proposed test plan regarding the service life and safety of these inflators, which includes testing that 

Takata will perform to determine whether they are susceptible to over-pressurization and/or rupturing. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. JOHN THUNE TO

SCOTT KUNSELMAN

Question 1. We are all aware that, historically, recall completion rates are unacceptably low. What more can be done to improve these rates? 

Answer. FCA US’s primary goal is to remedy all recalled vehicles. However, there 

are a number of factors and challenges affecting participation rates that are outside 

of the control FCA U.S. and other automakers control that we strive to overcome. 

Among these factors is whether vehicle owners respond to the recall notices they 

receive by scheduling an appointment with their dealer so that the needed remedy 

can be performed free of charge. 

Another factor impacting participation rates is vehicle age. An analysis commissioned by the Alliance of Automobile Manufacturers (initiated in 2008 and 2009) determined that participation rates varied markedly based on the age of the vehicle 

involved in the recall. Among the findings: 

• For newer vehicles, the completion rate averaged 83 percent; 

• For vehicles 5–10 years old, the rate dropped nearly in half to 44 percent; and 

• For vehicles older than 10 years old, the completion rate dropped by another 

two–thirds to 15 percent. 

Because there continues to be a general lack of understanding of why so many 

vehicle owners fail to respond to multiple notices and other efforts to inform them 

that their vehicle needs free repairs to fix a safety–related defect or non-compliance, 

the Alliance of Automobile Manufacturers, of which FCA U.S. is a member, has 

commissioned a major research effort to study consumer attitudes about vehicle recalls and reasons why free repairs are sought or not sought. 

a. For each recall involving defective Takata air bags, please provide FCA’s current recall completion rates. 

Answer. 

FCA US’ Takata Recall Campaign Status as of August 6, 2015 

NHTSA # FCA US # Details 

14V–354 14V–354 P40 No longer active. Absorbed into 14V–817 (P81)/14V–770 (P78) No longer active. Absorbed into 14V–817 (P81)/14V–770 (P78) 

14V–770 P78 6% 

14V–817 14V–817 P81 Never Launched. Replaced with 15V–313 (R25) Never Launched. Replaced with 15V–313 (R25) 

15V–313 R25 3% Total—Phased Launch (5 phases) 

• Phase 1 start June 8, 2015 

• Phase 2 start TBD 

• Phase 3–5 start TBD 

15V–312 R26 15V–312 R26 0% Planned start November 0% Planned start November 

15V–444 R37 0% Phased launch (2 phases) 

• Tied to R25 Phase 3 and Phase 5 

b. What has your company done to facilitate the recall process in terms of reaching out to its own customers? 

Answer. FCA U.S. monitors the pace of vehicles being remedied at a regular frequency. The effectiveness of an outreach campaign may be lower where there are 

factors such as vehicle age, lack of current name on vehicle title, or even the ownerperceived ability to self-diagnose or self-assess the risk. 

In the event that the standard outreach plan is not producing results that are acceptable to FCA U.S. or NHTSA, additional actions may be taken. These actions 

would be considered outside of the norm or extraordinary measures. Each recall is 

different, and the same strategy may not necessarily work for all campaigns. FCA 

U.S. evaluates each recall campaign to understand the individual issues and challenges occurring during the execution of remedy repair and deploys a directed response. 

117 

Some activities that may be included in an expanded outreach strategy include 

the creation of general URLs on the subject as well as personal URLs directing customers to a live person that will facilitate the remedy’s completion. FCA U.S. is also 

working with demographic expert Urban Science to program and leverage the organization’s StreetSmart® tool to identify the specific location of vehicles that have not 

yet had their recall remedy completed. 

As a recent example, FCA U.S. has initiated expanded outreach activities for Recall 14V–770 (P78). We will use a phased approach, beginning with robo calls to determine ‘‘bad’’ phone numbers. Shortly thereafter, the outreach activities will 

progress to follow-up outbound phone calls and e-mail notifications to the owners 

in the target areas as well as follow-up mailers. Additional outreach activities will 

be determined as necessary. 

Question 2. What is the process, generally, for remedying a recall and repairing 

the defective part? 

Answer. FCA sends owner letters to all affected customers informing the customer 

their vehicle is involved in a recall. The owner letter informs the customer of the 

issue and consequence of the recall to the customer. The owner letter also informs 

the customer of the specific repair and the estimated time to complete the repair. 

The customer has the option to either schedule a service repair in advance or drive 

to a dealer and have the recall remedy performed. 

Dealers are notified of the recall by a release of the repair instructions by FCA 

U.S. to the dealer computer network. When a customer brings a vehicle to the dealer, the dealer enters the VIN into the dealer computer system, which informs the 

dealer that the VIN is associated with a specific recall. 

a. How long does it typically take to procure and then ship replacement parts to 

the dealers? 

Answer. Each recall is different so there is no way to characterize a ‘‘typical’’ 

length of time to procure and ship parts to dealers for recall campaigns. 

b. What can be done to make the repair process more hassle-free for customers? 

Answer. The safety of our customers is paramount, as is the trust our customers 

place in their vehicles. We recognize that people rely on their vehicles for many important purposes. 

FCA U.S. Customer Assistance Centers assist customers with getting their recalls 

completed in several ways, including: 

1. Agents contact dealers on behalf of customers to schedule appointments when 

remedy parts are available; 

2. When remedy parts are not available, customer information is retained and the 

customer will be notified when parts become available; and 

3. Agents provide information about open recalls and estimated timing when remedy parts are not available. 

When conducting a recall, it is our primary goal to have the parts available and 

promptly remedy vehicles. When that cannot be accomplished, we make loaner cars 

available upon request. On July 1, 2015, FCA U.S. enhanced its Courtesy Transportation/Dealer Service Loaner Program making it easier for dealers to provide loaner 

vehicles to owners waiting for recall completion. 

RESPONSE TO WRITTEN QUESTION SUBMITTED BY HON. ROY BLUNT TO

SCOTT KUNSELMAN

Question. Do you have suggestions on how to protect consumers from rental cars 

with open safety recalls? 

Answer. Safety is our top priority at FCA US. Ensuring that unsafe vehicles are 

off the road is critical to motor vehicle safety. FCA U.S. believes that all customers, 

including rental car companies, should be able to have their recalled vehicles repaired in a timely manner and that all customers should be treated equally whether 

they are driving their own vehicle or one they rented. For this reason, FCA U.S. 

continues to support the Alliance of Automobile Manufacturers’ legislative proposal 

regarding rental vehicles subject to recalls. This proposal would prevent rental car 

companies from renting vehicles unless the prospective renter is notified of the recall or the vehicle is subject to a do not drive notice. This would hold rental car 

companies to the same standards as auto manufacturers and ensure rental car customers have the same access to vehicle recall and safety information as customers 

who own an affected vehicle. 

118 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. RON JOHNSON TO

SCOTT KUNSELMAN

Question 1. Does your company support a process where consumers should continue to be able to rent a car or truck if the vehicle is under an open safety recall? 

Answer. FCA U.S. supports requiring that rental car companies ground all vehicles subject to a stop drive recall until they are repaired. For all other recalls, we 

continue to support requiring that rental car companies ground vehicles until they 

are repaired, unless the rental car company: (1) provides customers with written notification of any un-remedied defect or noncompliance, including pre-remedy precautions; and (2) receives a written acknowledgement by the customer of receipt of 

notification. 

Question 2. If not, what are your legislative recommendations for Congress to pursue to stop driver deaths that continue to occur in rented, recalled vehicles? 

Answer. FCA U.S. supports the Alliance of Automobile Manufacturers’ legislative 

proposal regarding rental vehicles subject to recalls. This proposal would prevent 

rental car companies from renting vehicles unless the prospective renter is notified 

of the recall or the vehicle is subject to a do not drive notice. This would hold rental 

car companies to the same standards as auto manufacturers and ensure rental car 

customers have the same access to vehicle recall and safety information as customers who own an affected vehicle. 

Question 3. What other stakeholders besides your company would you expect to 

support your recommendations, and does the car rental industry support your ideas? 

If not, why not? 

Answer. It is our understanding that nearly all of the member companies of the 

Alliance of Automobile Manufacturers support its legislative proposal, which ensures that rental car customers have the same access to vehicle recall and safety 

information as customers who own an affected vehicle by requiring that rental car 

companies ground vehicles until they are repaired, unless the rental car company: 

(1) provides customers with written notification of any un-remedied defect or noncompliance, including pre-remedy precautions; and (2) receives a written acknowledgement by the customer of receipt of notification. 

It is our understanding that all major rental car companies have entered into a 

voluntary agreement to park their vehicles subject to a safety recall. It is also our 

understanding that the same rental car companies support the Raechel and Jacqueline Houck Safe Rental Car Act. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. BILL NELSON TO

SCOTT KUNSELMAN

Question 1. What is your company’s position on renting to the public vehicles 

under open safety recalls? 

Answer. Safety is our top priority at FCA US. Ensuring that unsafe vehicles are 

off the road is critical to motor vehicle safety. FCA U.S. believes that all customers, 

including rental car companies, should be able to have their recalled vehicles repaired in a timely manner and that all customers should be treated equally whether 

they are driving their own vehicle or one they rented. 

FCA U.S. supports requiring that rental car companies ground all vehicles subject 

to a stop drive recall until they are repaired. For all other recalls, we support requiring that rental car companies ground vehicles until they are repaired, unless 

the rental car company: (1) provides customers with written notification of any unremedied defect or noncompliance, including pre-remedy precautions; and (2) receives a written acknowledgement by the customer of receipt of notification. 

Question 2. Your company has not publicly supported S. 1173, the Raechel and 

Jacqueline Houck Safe Rental Car Act, which was reintroduced on April 30, 2015. 

Question 2a. Do you support S. 1173? Why or why not? 

Answer. No. FCA U.S. supports the Alliance of Automobile Manufacturer’s (the 

‘‘Alliance’’) legislative proposal regarding rental vehicles subject to recalls. This proposal would prevent rental car companies from renting vehicles unless the prospective renter is notified of the recall or the vehicle is subject to a do not drive notice. 

This would hold rental car companies to the same standards as auto manufacturers 

and ensure rental car customers have the same access to vehicle recall and safety 

information as customers who own an affected vehicle. 

Question 2b. If not, do you have alternative proposals or ideas as to how consumers can be better protected from rental cars under recall? If so, please detail 

them. 

119 

Answer. FCA U.S. supports the Alliance legislative proposal, as described above. 

Question 3. In response to a proposal offered by the Alliance of Automobile Manufacturers (‘‘the Alliance’’), NHTSA analyzed the number of recalls in which the manufacturer advised the owner to not drive the recalled vehicle (so-called ‘‘do not drive’’ 

recalls). In a November 5, 2014, letter to the Senate, NHTSA reported that, from 

2010–2013, ‘‘do not drive’’ recalls issued by members of the Alliance accounted for 

only 4.9 percent of the total number of recalled vehicles. Furthermore, the recalled 

vehicles that were driven by Raechel Houck and Jewel Brangman were not subject 

to a ‘‘do not drive’’ advisory. In light of these facts, does your company agree with 

the Alliance’s position that only recalled vehicles subject to a ‘‘do not drive’’ advisory 

should be grounded and not rented until they have been repaired? 

Answer. Yes, as described above, FCA U.S. supports the Alliance’s position. 

Question 4. The Alliance has also proposed that vehicles subject to a safety recall, 

other than ‘‘do not drive’’ recalls, should be able to be rented before they are repaired—as long as the consumer is informed of the recall when renting the vehicle. 

Do you agree with the Alliance’s position that disclosure to the customer of a safety 

recall is sufficient to protect the safety of that customer? 

Answer. FCA U.S. agrees that the Alliance legislative proposal ensures that rental car customers have the same access to vehicle recall and safety information as 

customers who own an affected vehicle by requiring that rental car companies 

ground vehicles until they are repaired, unless the rental car company: (1) provides 

customers with written notification of any un-remedied defect or noncompliance, including pre-remedy precautions; and (2) receives a written acknowledgement by the 

customer of receipt of notification. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. JOHN THUNE TO

RICK SCHOSTEK

Question 1. We are all aware that, historically, recall completion rates are unacceptably low. What more can be done to improve these rates? 

Answer. Honda continues to believe that there is substantial promise in tying the 

annual state vehicle registration process to a requirement that safety defects be addressed before completion of vehicle registration. We recognize that there are a 

number of issues about this concept that require further discussion. But we are convinced that this is the single most significant step we can take to achieve very high 

recall and remedy rates. 

a. For each recall involving defective Takata air bags, please provide Honda’s current recall completion rates. 

Answer. As of August 5, 2015, with respect to Takata inflator recalls initiated in 

2014 and later, American Honda’s recall completion rate by inflator repair type is: 

Driver-Side 29.0% 

Passenger-Side 27.1% 

Overall 28.3% 

b. What has Honda done to facilitate the recall process in terms of reaching out 

to its own customers? 

Answer. Over and above the required mailed notification, we have pursued new 

ideas and methods to encourage our customers to check their vehicle identification 

number and recall status in order to increase the rate of response to recall notifications. 

We provide multiple notices in both English and Spanish. We have consulted with 

the U.S. Postal Service to try new methods to get people to open recall mailings. 

One idea was a free calendar inserted with the recall notice. This did not prove successful. We have used overnight delivery of follow-up notifications. There was no 

material change in the rate of recall completion. 

We have, and continue to contact customers by phone. In support of the Takata 

inflator campaigns, we have called more than 1.5 million hard-to-reach customers, 

using both direct and automated calls. An automated call just before notification or 

reminder mail has been successful in raising response rate. It is now our practice 

to use automated calls to alert customers in advance of mailed notifications. 

We have enhanced our general recalls websites and created a new microsite dedicated to air bag inflator recalls to keep our customers informed and to make it easy 

for them to check their vehicles for open recalls. We extended our Customer Relations department call center hours to receive calls from customers seven days per 

week as well as engage with customers on Honda’s Twitter and Facebook pages. 

In some markets, we have enlisted a special investigative firm as part of our effort to contact hard-to-reach owners of older model vehicles affected by the Takata 

120 

airbag inflator recalls. We also have worked with CARFAX to add open recall alerts 

to the CARFAX history report for affected vehicles. In addition, CARFAX is sending 

us an alert if there is a change to their history report for some vehicles with the 

affected Vehicle Identification Numbers (VINs). This helps us to obtain additional 

information to contact a hard-to-reach customer. 

Honda also voluntarily initiated a multi-million dollar bi-lingual regional advertising campaign in March to implore customers to repair their vehicles. This campaign was designed to gain the attention of customers in the nine states and two 

U.S. territories that experience the most consistently high temperatures and absolute humidity to immediately check for open recalls and safety improvement campaigns. Complementing this print and radio effort was a social media campaign via 

Facebook advertising 

c. In your testimony, you commended the effectiveness of Honda’s social media 

campaign regarding the air bag recalls. On what metrics does Honda rely in evaluating the success of this social media campaign? 

Answer. Honda evaluated this social media campaign’s success upon impressions 

(reach) and engagement rate (percent of people who interacted in some manner with 

the post such as clicking, liking, sharing). The campaign achieved more than 6.4 

million impressions and more than 124,000 engagements. Ideally, regarding the air 

bag inflator recall social media campaign, we would measure success upon number 

of affected vehicles that were repaired. However, due to the multitude of media 

channels (print, radio, personal phone calls, post cards, as well as social media) utilized this past spring, it was not possible to clearly attribute the number of repairs 

solely to the social media campaign. We do know, however, that of the total Honda 

and Acura recall website views during the campaign, 52.2 percent came from the 

Facebook social media ads. 

d. What did those metrics show about this social media campaign in particular? 

Answer. We created a two-part Facebook ad campaign. The first was launched 

March 18,2015 targeting national Honda and Acura owners in the U.S.. The engagement rate (ER) for this group was 2.23 percent (above our benchmark of 1.10 percent) and the click through rate (CTR) was 2.73 percent. 

The second portion of the Facebook ad campaign was launched March 19,2015 

and geo-targeted Honda and Acura owners residing in California and states and territories identified as high absolute humidity regions (Texas, Louisiana, Mississippi, 

Alabama, Georgia, Florida, South Carolina, Hawaii, Puerto Rico, and U.S. Virgin Islands). The ER for this group was also greater than our benchmark (1.80 percent 

versus 1.1 0 percent) and the CTR was 2.33 percent. Overall the limiting factor for 

this effort-or any social media effort-, particularly for older vehicles that have 

changed hands one or more times, is having the current owner’s e-mail address. 

Question 2. What is the process, generally, for remedying a recall and repairing 

the defective part? 

Answer. Once an automaker notifies NHTSA that it has determined a safety defect exists in one of its vehicles, the automaker has 60 days to notify registered vehicle owners of the defect and, if available, the process for remedying it. If there is 

no available remedy, then the automaker will have to send a second notification letter to vehicle owners to advise them once a remedy is available. (Whether a remedy 

is available at the time of the initial owner notification often times depends on 

whether the defect is one of manufacture or design. If it is the latter, then it may 

take time to design, test and manufacture replacement parts). Once the remedy is 

available and owners are notified, much of the process depends on the vehicle owner 

recognizing the automaker notice and responding to it, typically by calling either 

their local dealer to schedule a service appointment or the automaker’s customer relations department to identify a dealer and schedule an appointment. When the 

owner arrives at the dealer for a scheduled recall repair appointment, the dealer 

will repair the vehicle for free. 

a. How long does it typically take to procure and then ship replacement parts to 

the dealers? 

Answer. There are many different factors affecting procurement and shipment of 

replacement parts to dealers, including tooling availability, raw material availability, component part lead-times, required testing, capacity limitations, and logistics lead-time. Procurement lead-time can vary from as little as a few days to many 

months. The general procurement timeframe, from the time the purchase order is 

generated until the time the parts arrive at American Honda, is typically between 

30 and 60 days. After American Honda receives the parts, the timeframe to have 

them available to the dealer is typically about a week. 

b. What can be done to make the repair process more hassle-free for customers? 

121 

Answer. We have asked our dealers to expand service hours and to never turn 

away a customer with an affected vehicle. In the event a customer may have forgotten to schedule or include the recall repair on an earlier scheduled appointment 

with the dealership, we require dealers to check the YIN for every vehicle that 

comes into their de.alership. 

We also have reinforced with our dealers Honda’s firm policy to offer affected customers a loaner or rental car free of charge while their vehicle is being repaired or 

if they are waiting for a replacement part to be delivered. All dealers are authorized 

to make a vehicle available to a customer without prior approval from Honda. We 

have been actively monitoring the availability of loaner and rental cars and engaging with our dealers to ensure that they offer such vehicles so we can meet our customers’ needs. 

RESPONSE TO WRITTEN QUESTION SUBMITTED BY HON. ROY BLUNT TO

RICK SCHOSTEK

Question. Do you have suggestions on how to protect consumers from rental cars 

with open safety recalls? 

Answer. As noted in our response to Senator Johnson’s first question, Honda supports legislation S.l173, the Raechel and Jacqueline Houck Safe Rental Car Act of 

2015—to require car rental companies to remedy safety defects before a vehicle can 

be rented. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. RON JOHNSON TO

RICK SCHOSTEK

Question 1. Does your company support a process where consumers should continue to be able to rent a car or truck if the vehicle is under an open safety recall? 

Answer. We believe that the defect in a vehicle rented to the public should be 

remedied before the vehicle is rented. It is for this reason that Mr. Schostek expressed at the June 23 hearing Honda’s support for S.1173, the Raechel and Jacqueline Houck Safe Rental Car Act of 2015 and supported its inclusion in the Senate-passed Developing a Reliable and Innovative Vision for the Economy (DRIVE) 

Act. 

Question 2. If not, what are your legislative recommendations for Congress to pursue to stop driver deaths that continue to occur in rented, recalled vehicles? 

Answer. Please see our response to Question 1. 

Question 3. What other stakeholders besides your company would you expect to 

support your recommendations, and does the car rental industry support your ideas? 

If not, why not? 

Answer. Honda is not in a position to speak for other stakeholders on their legislative positions. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. BILL NELSON TO

RICK SCHOSTEK

Question 1. What is your company’s position on renting to the public vehicles 

under open safety recalls? 

Answer. As a manufacturer of motor vehicles, Honda is responsible for the safety 

of our vehicles. While we establish high standards of design, materials and manufacture for all aspects of our vehicles, at times the resulting product may not meet 

the level of intended safety performance. In those circumstances where it becomes 

necessary to recall a vehicle for a safety related defect, we strive to locate and notify 

owners of affected vehicles of the need to bring the vehicle to a dealer for inspection 

and remedy where needed. Our objective is reach as many owners as we are able 

and to remedy their vehicles. We believe that the defect in a vehicle rented to the 

public should be remedied before the vehicle is rented. 

Question 2. Your company has not publicly supported S. 1173, the Raechel and 

Jacqueline Houck Safe Rental Car Act, which was reintroduced on April 30, 2015. 

Do you support S. 1173? Why or why not? 

Answer. Mr. Schostek announced Honda’s support for S. 1173 at the hearing on 

June 23, 2015. That support was reiterated in a letter to Senator Schumer, the 

sponsor of the legislation, on July 9, 2015. A copy of that letter, which explains our 

reasons for supporting the bill, is appended hereto. 

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ATTACHMENT

HONDA NORTH AMERICA, INC. 

Washington, DC, July 9, 2015 

Hon. CHARLES E. SCHUMER, 

SH–322 Hart Senate Office Building, 

Washington, DC. 

Dear Senator Schumer: 

I write to offer Honda’s support for S. 1173, the Raechel and Jacqueline Houck 

Safe Rental Car Act of 2015. 

Honda North America’s Executive Vice President, Rick Schostek, announced our 

support of the legislation during his testimony before the Senate Commerce, 

Science, and Transportation Committee on June 23, 2015. As a manufacturer of 

motor vehicles, we are responsible for the safety of our products. Despite our best 

efforts, from time to time it becomes necessary to recall a vehicle to remedy a system or component that may not meet the level of intended safety performance. 

When this occurs, we strive to locate all of our customers with an affected vehicle 

and urge them to bring their vehicle to our dealers for repair at their earliest convenience. 

As a matter of corporate policy, Honda generally does not sell its vehicles to rental 

car fleets. However, our dealers are free to do so, which means that some Honda 

and Acura vehicles do end up in rental car fleets. Additionally, some rental car companies purchase older vehicles in the used car market. As such, we believe S.1173 

will facilitate our ability to repair these vehicles and assist us in protecting our customers and those who drive our vehicles. 

We congratulate you and your colleagues for sponsoring this important legislation. 

Sincerely, 

EDWARD B. COHEN, 

Vice President, 

Government and Industry Relations. 

Cc: Senator Barbara Boxer 

Senator Claire McCaskill 

Senator Kristen Gillibrand 

Senator Robert Casey, Jr. 

Senator Dianne Feinstein 

Senator Richard Blumenthal 

Senator Bill Nelson 

Æ 

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