It’s advice as true for U.S. Air Force fighters as it is for those trading credit-default swaps in Wall Street trading houses: “no guts, no glory.” And, in the case of one storied Japanese firm that had the guts to go for glory in an untested market — air bags — about 30 years ago, the advice has proved disastrous. Takata Corporation, a firm that punched above its weight when entering uncharted territory, must now deal with the biggest recall in history.
“A recall of this scope illustrates the potential for massive automaker expense and consumer inconvenience when a common, mass-produced part is defective,” Karl Brauer, a senior analyst at Kelley Blue Book, told The Washington Post’s Drew Harwell. “Ironically, the use of common parts across markets and manufacturers is meant to save money, yet a recall of this size will cost the industry billions.”
But Takata, founded in 1933 in Japan, didn’t start out in the automobile business. For about two decades, the firm, which specialized in textiles, was content to make lifelines for parachutes. But, after the end of World War II, Takata got into seat belts.
The business proved lucrative. Takata, according to the company’s Web site, staged the first public seat-belt crash tests using dummies. By the 1970s, it was working with the National Highway Traffic Safety Administration, creating child-safety seats and sponsoring an “International Seat Belt” symposium.
Then the 1980s brought a moment of truth: Should the company start making air bags? Juichiro Takada, son of the company’s founder, wasn’t sure.
“If anything happens to the airbags, Takata will go bankrupt,” Takada said, according to a Honda engineer, as Automotive News reported last year. “We can’t cross a bridge as dangerous as this.”
But just like the three billy goats gruff, the company crossed the bridge to make itself fat. And, for a while, the feeding was good.
“The bet paid off spectacularly,” Ben Klayman and Yoko Kubota of Reuters explained. “Air bags evolved from a pricey option to standard equipment on cars, and Takata became one of the top three manufacturers in the world.”
And then it started to look like the company had eyes bigger than its stomach. Making air bags, it turned out, required more than just being really good at weaving. Air bags depend on, of all things, pyrotechnics. And pyrotechnics and textiles do not necessarily mix.
“The tale that emerges from interviews with industry officials, chemical engineers, former U.S. safety officials and former Takata employees — as well as reviews of documents filed with U.S. regulators — is one of a company that lost its grip on quality,” Reuters wrote. “It’s a classic case study in how a lapse in quality-control rigor can prove extraordinarily costly to even a well-regarded, successful company.”
It’s the explosives that proved a problem for Takata. The company tried for decades to make them more stable — with unclear results, as one lawyer for a man injured by an airbag in 2006 claimed.
“The patents, some from as early as 1985, were intended to improve the ammonium nitrate propellants that help inflate the bags and strengthen their metal housing,” Automotive News wrote. “The applications provide ammunition for lawyers seeking to show the Japanese supplier could have acted sooner to head off defects linked to at least five deaths globally after air bags have deployed with too much force.”
Even as the company battled arcane problems — the need for propellants to be placed in dry storage on weekends, the need for employees to wear anti-static shoes to prevent explosions at plants — people were dying. Sure, airbags may have saved more than 250,000 lives between 1975 and 2011, but Takata products had also allegedly killed, among others, an 18-year-old cheerleader in Oklahoma in 2009. A 33-year-old woman in Virginia that same year. A driver in Malaysia in 2014.
Tests to determine the cause of the problems weren’t always conclusive, and words meant to sound reassuring often weren’t.
“The cases all had completely different causes that led to recalls,” a company spokesman told Reuters last year. “If you ask me whether there was a causal relationship between them, I can only say that there wasn’t.”
The company not only briefly installed its first non-Japanese president, but apologized.
“Our whole company will strengthen our quality management structure and work to prevent an incident from occurring again,” Shigehisa Takada — son of Juichiro, grandson of Takata’s founder — said last year. Two months later, a 35-year-old father of two was allegedly killed by a Takata airbag in Houston.
After this week’s historic recall, Takata, admitting it has a problem, seems to have a new attitude.
“Up until now Takata has refused to acknowledge that their airbags are defective,” said Transportation Secretary Anthony Foxx, as the New York Times reported. “That changes today.”
Whether it takes responsibility or not, the company faces a hard reckoning. Its goal, according to its Web site: “to achieve its dream of ‘a society with zero fatalities from traffic accidents’ by improving automotive safety systems.”
Unfortunately, Takata’s greatest obstacle in achieving this goal may be itself.