Takata air bag data manipulation widespread, says Honda

Takata Corp (7312.T) had engaged in widespread manipulation of test results for air bag inflators supplied to Honda Motor Co (7267.T), according to an audit, the automaker said, but the review had shown no safety risks in cars not already recalled.

The initial results of the audit come as Takata faces mounting liabilities over a massive global recall of its potentially defective inflators. The embattled company is searching for a financial backer to help it overhaul its business and manage ballooning costs.

Honda said the audit of all Takata-made inflators began in October 2015 after its own review had suggested that Takata misrepresented and manipulated test data for airbag inflators which had ruptured with excessive force, causing metal and plastic shards to spray into vehicle compartments.

The audit for Takata was led by Brian O’Neill, the former president of the Insurance Institute for Highway Safety, a U.S. automotive testing group, Honda said. The first phase dealt with inflators which had not been recalled as of October.

Bloomberg reported on Tuesday that the audit showed Takata engineers had removed some test results to artificially reduce variability in its inflator performance, citing O’Neill. O’Neill was not immediately available for comment.

“Despite numerous examples of data manipulation, the audit team did not identify any safety risks within the test reports and test data for the inflators in Honda vehicles not recalled as of October 2015,” Honda’s U.S. spokesman Chris Martin told Reuters.

Honda said it only had preliminary information about the audit. It expected to receive the final results of the audit’s first phase within the next week or so, and would share the information with regulators.

Asked for comment, Takata reiterated its deep regret over issues related to the integrity of its testing and reporting of test results to customers.

Roughly 100 million inflators have been classified as defective due to the possibility that they may explode violently after prolonged exposure to hot conditions. Defective inflators have been linked to around 13 deaths around the world, mainly in the United States.

Takata’s recall costs have so far been comparatively small as automakers have borne most of the burden, but it is widely expected to shoulder much more.

If the supplier was found to be solely responsible for the fault, it could face a bill of more than $10 billion, based on a rough calculation that each replacement kit costs around $100.

Honda, which has been most affected by the air bag recall, has said it will stop using Takata inflators in new models.

Source: Reuters