U.S. Opens Probe Into Honda Reporting Of Takata Air Bag Failures

The U.S. National Highway Traffic Safety Administration said on November 3 it will examine whether Honda Motor Co Ltd failed to report deaths or injuries involving air bags that are now part of a sweeping federal review. Regulators gave Honda three weeks to answer detailed questions about how it sought and logged accident reports for more than a decade. This order, which includes 34 points, must be answered under oath.

"Honda and the other automakers are legally obligated to report this information to us and failure to do so will not be tolerated," NHTSA Deputy Administrator David Friedman said in a statement.

U.S. law requires that automakers submit to the NHTSA on a quarterly basis so-called Early Warning Reporting data on every incident where they have received information about a death or injury involving their vehicles that might have been caused by a defect.

In a statement, the NHTSA said that it was particularly eyeing air bag malfunctions. "NHTSA has received information indicating that [Honda] failed to report incidents involving Takata air bags," the agency said in a statement. "NHTSA is also concerned that Honda's reporting failures go beyond the Takata incidents."

Honda said that it had contracted a third-party audit of potential inaccuracies "and will soon share our findings" with NHTSA.

Federal regulators in June asked carmakers for help identifying suspect air bags manufactured by Takata Corp - Honda's largest supplier of the safety device. The air bags and inflators can explode with excessive force and spray metal shards into vehicle occupants.

One of the outstanding questions in the ongoing Takata airbag saga – how much will it cost the company – is getting an answer, but even that response is changing for the worse for the supplier because those losses are mounting.

The company announced a loss of 35 billion yen, or $306 million, during the quarter that ended September 30. Takata executives further explained the company will lose 25 billion yen for the year, which ends March 2015, which equates to $218 million.

Takata, which has apologized for the problems, earlier recorded a special loss of 45 billion yen, or nearly $400 million, in its first quarter to handle the costs associated with the problem. In short, it’s taken about $700 million losses due to the problem. More importantly, it’s not likely to be the end of such charges.

The supplier is assuming it will pay all recall-related costs, Chief Financial Officer Yoichiro Nomura said. However, the idea has been floated that some of the automakers may share in those costs. Nomura declined to elaborate on the possibility.

Since 2008, ten global vehicle manufacturers that use Takata air bags have recalled more than ten million cars in the United States and more than seventeen million worldwide to replace inflators that have been linked to at least four deaths and numerous serious injuries.