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Leaving Cost Issues Still Unresolved, Takata says Latest US Recall as Investigative

Leaving Cost Issues Still Unresolved, Takata says Latest US Recall as Investigative
Leaving the thorny question of cost-sharing with automakers unresolved Japan's Takata Corp said it considered the recall investigative and declared nearly 14 million air bag inflators defective as part of an expanded U.S. recall.
The vital element of financial implications left unclear with the management saying that can be worked out only when there is clarity on the root cause of the problem, the question of just how much Takata will have to pay for a deepening crisis over potentially deadly airbags has been hanging heavily over the firm.
Investigative recalls, where the automakers collect parts to determine the reasons for the defects is what had been launched by the users of Takata airbags so far in the US. Although Takata is widely expected to shoulder more financial costs of recalls, under such recalls, automakers bear most of the financial burden.
The airbags have been blamed for 13 deaths and more than 100 injuries, mainly in the United States due to their potential to inflate violently, spraying metal shrapnel in the vehicle.
On top of the more than 50 million Takata air bags that have already been recalled globally, the U.S. authorities announcing a recall of up to 40 million more of the company's air bags this month which considerably worsened the woes for the Japanese air bag manufacturing company.
The removal of more than 14 million inflators was announced as a first part of the expanded recall of Takata air bags.
The company 's stance that it is waiting until a study it commissioned presents its conclusions in the summer was reiterated by the company spokesman Toyohiro Hishikawa who said that the company considers the newly announced recall investigative.
The US National Highway Traffic Safety Administration had assessed that the Takata air bags exploded due to a combination of time, environmental moisture and fluctuating high temperatures contribute to the degradation of the ammonium nitrate propellant in the inflators and Hishikawa added the company "generally agrees" with the National Highway Traffic Safety Administration's assessment.
"But we can't say that our assessments match NHTSA's 100 percent because we have yet to make our own conclusions," he said.
Based on a rough calculation that each replacement kit costs around $100, Takata could face a bill of more than $9 billion in recall costs, if the company was found to be solely responsible for the problem. Sources have said the company has begun looking for a financial backer to help with the recall costs.
Takata ad Honda Motor Co were accused of covering up the problem and demanding $10,000 in compensation for every affected car in the first lawsuit by a US state – Hawaii, to sue the auto parts maker on Friday.
Takata declined to comment on the Hawaii lawsuit. Honda also declined to comment, saying it had not be served with the lawsuit.

Christopher J. Mitchell

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