The Aloha State Verse Takata

Recently this past Friday, the Aloha state, Hawaii, took yet another shot at the Takata airbag defect by calling the Japanese auto parts maker to court. Accusing Takata of covering up the deadly airbag defect, the state court demanded a $10,000 penalty for every affected car owner residing in Hawaii. Filed by Hawaii’s First Circuit Court, the lawsuit makes Hawaii the first state to sue Takata over its airbags, and moreover, the lawsuit includes Honda, the automaker most affected by the defect as Takata’s biggest customer. Regarding Honda, Hawaii hopes that the automaker will be a defendant in this case and demands that each company do more to raise awareness on the dangers of the defect on Honda’s car owners. In an interview, Steve Levins, the state’s director of consumer protection, stated, “We’re not going to sit back and wait for more accidents to happen. We’re also seeking that consumers be compensated for any losses associated with this incident, whether that’s alternative transportation costs, or a diminished value of their vehicle.” So far, there have been only 10 deaths in the United States and three overseas because of the defect, which is a result of pressure building up in the airbag, forcing a rupture to occur in the steel interiors of the airbags, and finally sending metal debris throughout the car’s cabin. In Hawaii’s case, the lawsuit says that its residents are at a higher risk than most other states due to the state’s high temperatures and humidity levels. Auto safety regulators support this claim since they recently determined that long-term exposure to moisture and temperature fluctuations over time actually degrade the explosives used to deploy the airbag, which makes the airbag more prone to rupture. At first the recall of airbags consisted of only humid regions such as Hawaii, Florida, Puerto Rico, and the Virgin Islands, but it now spans globally bringing its total global recall tally to 51 million vehicles with 70,000 recalls coming for the Aloha State. However, Hawaii is not seeking compensation for crash victims, but instead, insists that Takata reimburse or provide relief to car owners affected or otherwise inconvenienced by the recalls, even though no airbags have gone off within the state. Furthermore, for Takata, which is already facing a Justice Department investigation, Hawaii’s lawsuit creates another headache to go along with its mounting recall, legal and regulatory costs putting the company’s financial viability in doubt. Therefore, it will be interesting to see in the next couple weeks whether or not other states will begin filing lawsuits on the airbag defect, which will turn Takata’s headache into a full blown migraine.

source: http://www.nytimes.com/2016/05/14/business/takata-airbag-defect-lawsuit.html

8 comments to The Aloha State Verse Takata

  • manleya18

    It will be interesting to see whether or not other states and countries follow suit. Do you know if Takata has set aside a bundle of money to pay out compensation and lawsuits with? Similar to BP and to VW? Or are they doing a more of case by case approach?

  • adamsm19

    It will be interesting to see how this case plays out in court. Arguably, Takata did recall its airbags and I’m not sure if there is enough evidence to show that Takata tried to cover up the airbag problems.

  • frankn18

    A $10,000 fine per vehicle seems quite excessive and abusive. Takata obviously does not want people to die and is taking the steps they are able to execute to fix the problem. Adding more fines just puts another problem into the mix and stalls the solution even longer. There is no way Takata can pay the fines, their stock as cut a third this year and these fines only make it harder for them to replace the bags.

  • platte16

    I’m surprised one state is taking this on by themselves. I would think by piling resources together in a class action case between all states with affected drivers, the victims would gain better compensation.

  • siegels18

    I also feel as though this suit is excessive. If it is meant to deter other companies from covering up issues such as this one I feel it is unnecessary because Takata has been destroyed enough just by public opinion that every other company has taken note. Does anyone think it is possible that Hawaii is just trying to make some money for their residence? Maybe a public official who is pushing this suit wants to increase the publics opinion of him? Thoughts?

  • Sam Wilson

    This makes sense why Hawaii would be in a more dangerous, I would like to see what the statistics are for the state of Hawaii. I understand their frustration and the danger that they were put in but I can’t find myself agreeing that it is worth the lawsuit unless people had been hurt. I feel like they are trying to capitalize on a scenario. I think that this is not a great move also because Takata is already struggling with the claims and image. I think that if this lawsuit helps lead to their demise and the company goes belly up we will see a lot of distress in the auto industry and especially the Asian and specifically Japanese companies that are so heavily invested and reliant on Takata products for their cars.

  • hochstadtd18

    Also, think of the cost to dealers this causes: as Scotty Preysler talked about, a customer can basically get a new car to drive if they have a car outfitted with Takata airbags. While they do not get to keep this car, it results in huge opportunity costs for the dealers as they have to do the proper maintenance on the cars and lose potential gains they would have made from selling the loaner cars as used vehicles. It will be interesting to see what manufacturers have to say when earnings dates for Q2 2016 come around.

  • Barrett Snyder

    There is a massive class-action lawsuit in motion against Takata in the continental US. It’s not well-known to the public yet and the only reason I know about it is that my dad is serving as a consultant for the effect it will have on the salvage industry and auto recyclers. Keep your eyes and ears open for that one, if they decide to bring it about it would be one of the largest ever lawsuits as far as scale and $$$.

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