Takata LogoAccusing Takata Corporation of withholding information about its defective airbags despite being aware of it since 2004, the Automotive Recyclers Association has moved the Court against the Japanese firm claiming that auto recyclers were not able to sell faulty airbags.

The Lawsuit

Preferring a lawsuit in the US District Court for the Southern district of Florida, the association said the recyclers were forced to overpay for salvaged vehicles containing the airbags. “Recyclers are not able to sell or trade these airbags because they are valueless,” Micahel E. Wilson, the association’s CEO, said in a February 10 press release. Although he refused to estimate the cost of a salvaged airbag, he referred to recycled components being typically worth up to 90 percent of the manufacturer’s list price. Substantiating the general opinion that bidding for salvaged vehicles proved highly competitive, Wilson said US recyclers will find the going tough and may end up bidding against overseas competitors in an online auction.

The Problem

At least 11 different automakers are believed to have purchased the faulty airbags from Takata since 2001. The Automotive Recyclers Association, which is said to have 1,050 direct member firms in addition to 2,500 affiliates, has referred to many of them as defendants in the lawsuit. On its part, Takata has expressed its unwillingness to make any comments on the legal development. Authorities fear that the defective airbags run the huge risk of exploding in the event of even a minor accident. In such a case, the airbag might inflate with enormous force resulting in metal shards flying into the cabin. While the maiden case of an airbag rupturing and spraying metal pieces at the driver’s seat and those seated in the front was reported in 2004, more such incidents were reported soon, resulting in injury, blindness and even death for several victims. At least four deaths and about 100 injuries have been attributed to the Takata airbag defect that led to spraying of metal or plastic shrapnel. Specialists in the field have expressed the fear that moisture can seep inside the airbag inflator in high-humidity conditions, thereby destabilizing the chemical explosive. The airbags can turn unstable and explode even after a minor-fender bender, they opine, making it clear that it’s a major safety issue that can cause serious injuries and even lead to death.

Notwithstanding reports that Takata manufactured the airbags in an attempt to make them more compact and to get rid of the toxic fumes that were reportedly noticed in early airbags, the resultant product has been found unsafe for use and valueless for sale. Claiming that the defective airbags have drastically affected the value of the merchandise of auto recyclers, the Automotive Recyclers Association has noted in the lawsuit that recyclers wanting to salvage and resell were unable to engage in such a trade.