of guanidine nitrate (GuNi) based inflators 

 GuNi 

Takata and its successor, Joyson Safety Systems (JSS) 

 

 

This way, DVUSA aims to remedy as many airbags as possible in a single workshop visit, which will 

optimize completion rates and reduce customer confusion and inconvenience. This is particularly 

important with the types of vehicles in DVUSA’s fleets, which generally are used for commercial 

purposes and which owners therefore have difficulty foregoing to allow remedy repairs to be 

completed.

 Takata/JSS Daicel 

 

Hogan Lovells US LLP 

Columbia Square 

555 Thirteenth Street, NW 

Washington, DC 20004 

T +1 202 637 5600 

F +1 202 637 5910 

www.hoganlovells.com 

CONFIDENTIAL BUSINESS INFORMATION REDACTED 

July 19, 2018 

Mr. Jonathan Morrison 

Chief Counsel 

National Highway Traffic Safety Administration¶ 

(NCC-111), Room W41-227 

1200 New Jersey Avenue, SE 

West Building 

Washington, DC 20590 

RE: Docket No. NHTSA-2015-0055 – Daimler Vans Request for Extension of Priority 

Group 8 and 9 Launch Deadlines Under ¶ 34 of the Third Amended 

Coordinated Remedy Order 

Dear Mr. Morrison: 

On behalf of our client, Daimler Vans USA LLC (DVUSA), this letter requests an additional extension 

of time in which to comply with the sufficient supply and remedy launch deadlines for Priority Group 

8 and 9 vehicles contained in Paragraph 34 of the Third Amended Takata Coordinated Remedy 

Order (ACRO). The DVUSA vehicles included in Priority Group 8 are Model Year (MY) 2012 

Freightliner and Mercedes-Benz Sprinters in Zones A and non-A, for the passenger side airbag. The 

DVUSA vehicles included in Priority Group 9 are MY 2013 Freightliner and Mercedes-Benz Sprinters 

in Zones A and non-A, for the passenger side airbag. Under ¶ 34 of the ACRO, the original deadline 

for launching Priority Group 8 was March 31, 2018, and the original deadline for launching Priority 

Group 9 was June 30, 2018. DVUSA submitted an extension request on February 14, 2018, 

requesting that the remedy launch deadline for its Priority Group 8 and 9 vehicles be extended to 

July 31, 2018. 

A. Background 

As explained in DVUSA’s February 2018 extension request, as well as prior communications with 

NHTSA, DVUSA’s approach to the Takata recalls is to replace non-desiccated PSAN inflators with 

the superior technical solution [ ] using ammonium nitrate 

free propellant. The new [ ] inflators are being produced by [ ] and sourced through 

[ ]. Moreover, from the point at which 

passenger side inflators become available, Priority Group 8 and 9 vehicles, which still have an open 

repair on both sides, will be able to receive a non-PSAN solution within the same workshop visit. 

[ 

] 

DVUSA has worked with [ ] and [ ] to develop a reasonable plan to identify 

replacement parts, develop and validate these parts, and have a production process in place. 
 

 

 

 

 

 Daicel-produced GuNi 

 

 

 GuNi 

 Daicel 

 GuNi 

 GuNi 

Takata 

 

 GuNi 

 

 

 

 

 

Takata’s successor, JSS Elterlein, 

Germany (Joyson Sachsen GmbH) and Joyson USA 

JSS 

 

 JSS 

 JSS 

 

 

 

 JSS’s GST GST 

 JSS GST 

 GuNi JSS’s 

 GuNi 

 

 JSS’s Elterlein facility 

Fiat Chrysler Automobiles (FCA) and Volkswagen [(Dodge 

Sprinter and VW Crafter Van, which is based on the Sprinter platform) 

 FCA 

receives 15% VW 30% 

15% parts for FCA Dodge Sprinter 

 55% 

 

 JSS 

 VW 

 VW Crafter 

Mr. Jonathan Morrison CONFIDENTIAL BUSINESS INFORMATION REDACTED 

July 19, 2018 

Page 2 

According to initial production estimates, the [ ] inflators were to be available 

by January 2018, which would have been sufficient time to enable adequate parts supply for 

launching Priority Group 8 by March 31, 2018 and Priority Group 9 by June 30, 2018. Unforeseen 

delays in the development process resulted in a new [ ] availability date of August 2018. 

DVUSA was able to escalate the issue with [ ] in late 2017 and early 2018, leading to a new 

start of production (SOP) date for the [ ] inflators of April 2018. 

As the development process for the [ ] inflators stalled, there was an additional complication in 

that [ ] informed DVUSA that it was phasing out the production of SPI-D inflators by February 

2018. This meant that SPI-D inflators would not be available as an interim solution for the vehicles 

impacted by the [ ] inflator delay. 

B. New Issues Impacting Part Supply 

In addition to the delays described above, which were fully explained in DVUSA’s February 

extension request, further recent developments have interfered with DVUSA’s plans to launch 

Priority Groups 8 and 9 by the end of July 2018. These additional developments are discussed 

below. 

1. Delays in Initial Part Supply 

[ ], did not finalize the required contract between its factory in [ 

] on time. This significantly affected the ability of 

[ ] to sell parts to the U.S., causing an initial delay of 3-4 weeks in supplying airbag modules 

intended for the U.S., including those intended for DVUSA Priority Group 8 and 9 vehicles. This 

situation was rapidly escalated with [ ] by the Daimler AG (DAG) Global Logistics Center, which 

successfully pressured [ ] to correct the problem. Nonetheless, initial part supplies expected to 

be available at DVUSA in late May are still in transit from JSS and have not yet been received by 

DVUSA. 

An additional issue related to initial part supplies outside of DVUSA’s control is the lack of timely 

shipments of airbag module sub-components from [ ] sub-supplier [ ]. [ ] supplies the 

airbag cushion to [ ], but limited production capacity at [ ] resulted in an additional bottleneck 

to the production of [ ] airbag modules, further constraining [ ] ability to supply the required 

initial amount of [ ] parts as planned. 

2. Shared Production Capacity with Other Manufacturers 

The production line at [ ] is shared with two other manufacturers. These other 

manufacturers, [ ], sell similar vehicles 

] and have corresponding 

replacement inflator requirements under the worldwide Takata recalls. As of June 2018, [ 

] and [ ] of the existing capacity of the production line for PSAB-modules. 

(Those [ ] vehicles are mainly intended for [ ] vehicles which are 

also subject to the Takata recall in the U.S.) The remaining [ ] of the line capacity is the main 

source of supply for Mercedes-Benz and Freightliner Sprinter airbag module parts worldwide. These 

capacity allocations were only shared by [ ] in April 2018. Prior to that time DAG was unaware of 

any significant part demands by [ ] at this production facility. However, recent recall 

announcements in markets where the [ ] is sold (as discussed in the following section) 
 

 

 

 

 

Mr. Jonathan Morrison CONFIDENTIAL BUSINESS INFORMATION REDACTED 

July 19, 2018 

Page 3 

created a sudden part demand from [VW]. This shared capacity, and recent allocation of that 

capacity, further strains [JSS’s] ability to provide sufficient remedy parts to DVUSA. 

3. Additional Markets 

Recall mandates by the respective governmental authorities in relation to Takata PSAN inflators in 

other markets have significantly affected the allocation of production capacity. Recall mandates 

announced in China (December 31, 2017), Australia (February 27, 2018), and New Zealand 

(February 27, 2018) greatly impacted the allocation of the supply capacity for replacement parts for 

the U.S. market. For example, the [VW Crafter] is sold in Australia and New Zealand, which both 

recently announced recalls, and this vehicle shares production line capacity for its replacement 

airbag module with the Mercedes-Benz and Freightliner Sprinter sold by DVUSA. 

Although DAG has prioritized the U.S. market to the extent possible, the limitations on allocation of 

the supply capacity for the U.S. market due to recall mandates in other markets impacted the initial 

calculations as to when the sufficient launch supply threshold would be reached for Priority Group 8 

and 9 vehicles. As a consequence of the involvement of additional markets, a “fair share” approach 

may be necessary to distribute the existing capacity of [JSS] modules among the different markets. 

Additional markets implementing wide-ranging recalls similar to the U.S. recall, including models not 

sold in the U.S., also impacted the supply of U.S. inflators. For example, 20% of [JSS] dedicated 

production capacity of [ ] passenger airbags is directed to the Australia/New Zealand market, 

which utilizes a right-hand drive version of the remedy part that cannot be used in left-hand drive 

markets such as the U.S. Moreover, switching the production line between right- and left-hand drive 

versions of the airbag module creates further production delays. These factors further impacted 

production capacity for the U.S. market and timelines for the accumulation of parts for the DVUSA 

Priority Group 8 and 9 launch. 

4. Supply Chain Logistics 

An additional supply chain issue constraining DVUSA’s current part supply situation relates to 

[JSS’s] sub-supplier [ Mondi]. [ ] supplies the safety cages required for the transport of the 

replacement parts, and has a generally low production capacity. [Mondi’s] production has been 

[500] cages per week but it is expected to increase production to [1500 to 1700] cages per week by 

early August 2018. [JSS] is evaluating technical alternatives, but at the current time no other 

suppliers are available. Due to the lack of alternatives, this issue will remain a bottleneck to the 

supply process and a risk for DVUSA’s future parts availability. 

5. Summary 

The foregoing issues have significantly impacted [JSS’s] ability to supply [GuNi] airbags to DVUSA 

for its planned Priority Group 8 and 9 launch. Furthermore, many of the issues appear to present 

ongoing challenges for [JSS] and volatility in the supply chain. Indeed, although [JSS] has provided 

production forecasts for the remainder of 2018, it has been unable to confirm a delivery schedule 

that would ensure DVUSA sufficient part quantities to enable the launch of Priority Groups 8 and 9 in 

the near future. In the absence of a confirmed delivery schedule, DVUSA has no choice but to 

request additional time to launch these Priority Groups. 

C. DVUSA’s Request 
 

 

 

 

 

 thirty percent 

 

 Takata 

 thirty percent 

 

JSS JSS 

 thirty percent 

 

 

 

 

 

 JSS GuNi 

 

 JSS’s JSS 

 

 

 

 

 JSS 

JSS 

 

 JSS 

 

 

 

 GuNi 

 

 

 

 

 

Mr. Jonathan Morrison CONFIDENTIAL BUSINESS INFORMATION REDACTED 

July 19, 2018 

Page 4 

DVUSA normally launches a recall with [ ] of replacement parts available to dealers. As 

stated in DVUSA’s prior request for an extension of time to comply with the Priority Group 8 and 9 

launch deadlines, based on production capacity data received from [ ] as of February 1, 2018, 

DVUSA initially expected to have the requisite [ ] part supply available by July 31, 2018 

for both Priority Groups 8 and 9. However, based on production capacity forecasts received from 

[ ] this week for both Priority Groups 8 and 9, as well as ongoing [ ] supply chain and delivery 

issues, DVUSA does not anticipate having the requisite [ ] part supply available until 

December 31, 2018. As noted above, [ ] thus far has been unable to confirm a delivery schedule 

for sufficient parts to launch Priority Groups 8 and 9, but, if sufficient supplies can be established 

earlier, DVUSA plans to launch Priority Group 8 prior to the proposed date of December 31, 2018, 

and will consider launching the remedy with less than the requisite [ ] of replacement 

parts available to dealers. 

DVUSA plans to continue working closely with [ ] to expedite production of the [ ] solution 

and to address remaining supply and production issues. DVUSA already has arranged for direct 

shipment of airbag modules from [ ] distribution center in Germany to [ ] in the U.S., in order 

to avoid any additional delays that might be caused by the handling and transfer of parts within the 

DAG Global Logistics Center, which is normally part of the parts handling process. Additionally, 

DVUSA expects that the end of series production for the current model year in September 2018 will 

make more parts available and improve the part supply situation. 

DVUSA notes that it remains subject to the limitations of the [ ] production and supply process. 

[ ] has only confirmed the supply capacity for DVUSA through the end of 2018, so DVUSA does 

not yet know the potential impact on the launch of Priority Group 10. DVUSA will continue to seek 

capacity information and assurances from [ ], and will keep NHTSA informed as further supply 

information is obtained, including part supply information for Priority Group 10. 

In addition, DVUSA’s parts availability estimates are based on the continued steady progress of its 

previously-launched Priority Groups. Any spikes in completion rates could impact parts planning, 

since the airbag modules with the [ ]-based inflator will also fit the passenger side in the 

already-launched Priority Groups. 

Finally, additional recall announcements in other markets, as well as further unforeseen supply 

issues, could also impact part supply plans. 

Daimler Vans respectfully requests an extension of time to comply with the Priority Group 8 and 9 

launch deadlines to December 31, 2018. 
 

 

 

 

 

 

 

 

 

 

 

Mr. Jonathan Morrison 

July 19, 2018 

Page 5 

Thank you for your consideration of this request. 

Sincerely, 

R. Latane Montague 

Attachments: 

Affidavit in Support of Extension Request 

Cc:	 Stephen Hench, Esq. 

Michael D. Scott