Monday, January 16, 2017
No Airbags for Takata's Crash
The story of Takata Corporation's defective air-bag inflators is one we've been following for the last couple of years. Last Friday, Jan. 13, Takata itself received what amounts to a corporate deathblow by admitting guilt in a single criminal charge brought by a Federal grand jury in Detroit. In the agreement, Takata will pay a total of $1 billion which will go to fines, to compensation for individuals who were killed or injured by defective inflators, and mostly to car companies who bought the bad inflators, and who are now facing the world's largest recall headache. Takata is expected to file for bankruptcy and be sold or liquidated shortly thereafter.
First, some background. Air bags are safety devices which demonstrably save lives. An older friend of ours who was driving her pickup truck when it was hit by a delivery van a few months ago is alive today, thanks in part to the airbags that went off in her truck cab. But when a safety device turns into a deadly weapon, as a certain fraction of Takata air-bag inflators do, you have the automotive equivalent of razor blades in Halloween candy. That's not what's supposed to be going on.
By admitting guilt, Takata has implicitly endorsed the findings of the Federal indictment that charges three managers in particular with covering up the defects in the air-bag inflators for over a decade. As we discussed in an earlier blog on this matter, air bags work by setting off a propellant chemical that is supposed to burn in a controlled way, releasing lots of gas rapidly to inflate the air bags. But a controlled burn is not an explosion, and if the propellant detonates instead, the spike in pressure can rupture the metal container, sending shrapnel toward the vehicle's occupants. This has happened worldwide hundreds of times with Takata inflators, resulting in over a hundred injuries and sixteen deaths.
The requirement for controlled burning is tricky, and various chemicals have been used over the years. One of the main challenges with airbag inflators is to make sure they'll work when needed after years of changing temperatures and humidity inside a car body. This calls for chemically stable propellants, which tend to be expensive.
Takata had the notion years ago of using one of the cheapest propellants around: ammonium nitrate. It can be made to burn controllably, but it is sensitive to humidity and can turn into a highly explosive state unless protected from moisture. Internal Takata tests showed that their ammonium-nitrate inflators tended to leak, leading to instability of the chemical and the possibility of an explosion when triggered.
What the indictment shows is that the Takata executives intentionally and repeatedly falsified test data as long ago as 2005, calling it "XX-ing" the data, in order to keep selling the inflators to automakers. When problems with the Takata inflators began to surface, the company first ascribed them to isolated manufacturing issues. But investigations have revealed the truth: Takata executives have known there was a systematic problem for years, and concealed it from their customers and the public.
As a result, although many Takata inflators worked properly, over a dozen people died and hundreds were injured by defective ones. And millions of drivers (including yours truly) are wondering whether a minor fender-bender in their Honda or Toyota will set off a Takata inflator and turn the incident into a deadly encounter with a time bomb.
It's probably pointless to speculate, but I wonder if any of the Takata executives involved in this sordid mess ever took an engineering course that mentioned ethics. When I discuss ethics in my engineering classes, one of the standard case studies I trot out is the (hypothetical) situation in which some engineering test results come out negative, and your boss tells you to fake the results so it looks like the product passed anyway. It's one thing to sit in a classroom as an impoverished engineering student and say, "Oh, sure, I'd never do anything like that." And I suppose it's another thing altogether to be in charge of a large American division of a firm whose profit margins depend on sales of a product that you know to be defective.
There are limits to the ability of education to influence behavior. The most that educators can do is to alert students to the moral implications of their work, to urge them to be aware that such situations can arise, and to think carefully about how they would respond before being caught up in the heat of the moment when an ethical dilemma arises. Even if the Takata managers took some such class way back when they were students, in their case the workplace pressures overwhelmed whatever inclinations they had to do the right thing.
It's unusual that an ethical lapse ends up basically destroying a firm, but it has happened before—think Enron—and the Takata story shows that it can happen again. Even if Takata manages to liquidate itself to the extent of paying the full $1 billion (which is dubious), I don't think it will help the wronged automakers much in their attempts to replace the millions of airbag inflators that are now under a cloud of suspicion.
As far as the three individuals who were personally charged in the indictment, the U. S. government is attempting extradition, but the final decision is up to the government of Japan. Assigning blame for such situations on an individual level is complicated, simply because one has to have a good enough understanding of the management structure that prevailed at the time of the wrongdoing to figure out who was really doing the coverup and how it was managed. Should the janitor in the lab where the tests were falsified go to jail? Probably not. Should both the technician who falsified the reports, and his boss who ordered him to, be jailed? That is a judgment call that I'm certainly not qualified to make, but complexities like these will arise in the denouement of this sad tale.
In the meantime, if you're like me and have received a recall notice about defective airbags, either don't sit in the seat next to the airbag, or if you can't help but sit there, drive really carefully.
Sources: The Associated Press report of Takata's guilty plea and fine were carried by numerous outlets, including the Los Angeles Times on Jan. 13 at http://www.latimes.com/business/la-fi-hy-takata-charges-20170113-story.html. I also referred to an ABC News story at http://abcnews.go.com/Business/wireStory/justice-department-announce-takata-criminal-penalty-44759439. I previously blogged on the Takata inflator problems on Oct. 27, 2014 (http://engineeringethicsblog.blogspot.com/2014/10/do-not-sit-here-exploding-airbag-recall.html), and on Sept. 19, 2016 (http://engineeringethicsblog.blogspot.com/2016/09/time-to-make-airbags-optional.html).