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Case Study

Toyota and Nissan Recall 6.5 Million More Vehicles


Over Takata Airbags
By HIROKO TABUCHI and JONATHAN SOBLE - The New York Times, MAY 13, 2015

For months, the problem of defective airbags made by the Japanese supplier Takata
has festered in the auto industry as recalls have mounted and automakers have
searched for the reason that the airbags can explode violently, sending pieces of
metal into the cabin.
On Wednesday, Toyota and Nissan sharply escalated the recalls, adding 6.5 million
vehicles worldwide to the 25 million already deemed to contain potentially
dangerous components. At least six deaths and more than 100 injuries have been
linked to the defect.
Toyota said tests carried out on vehicles with Takata-made airbags, including some
recovered from junkyards, had shown that the steel inflaters, the parts that contain
the propellant and can burst apart, were sometimes not airtight. In those cases, the
propellant can become destabilized, raising the risk of rupture. Among the tests
Toyota conducted were CT scans, like those used in hospitals to see inside the
human body, to check the components integrity.
Certain types of airbag inflaters were found to have a potential for moisture
intrusion over time, the company said in a statement.
Still, Toyota said the relationship between moisture and the risk of rupture was
still very much unknown.
Toyota is among an alliance of automakers brought together last year as the
airbag recalls mushroomed that has been conducting its own independent tests
on the airbags.
One source of concern has been the airbags propellant, ammonium nitrate, a cheap
but powerful explosive that engineers say can destabilize if contaminated with
moisture. Despite its unstable properties, Takata chose to use ammonium nitrate in
its airbag inflaters because of cost concerns, former engineers have said.
Speaking publicly for the first time, Mr. Neff, president of IsoVac Engineering, a
defense contractor, said he told Takata at the time that a helium-based method its

engineers used to detect leaks was inadequate. Its inflaters could stop being airtight
within several years, and some of their prototypes were already leaking, Mr. Neff
said he warned.
Takata decided not to buy his system of radiation-based testing, sticking to its
helium leak-testing method, Mr. Neff said.
My opinion was asked by the Takata management, he said. I gave them my
opinion, and they asked me to leave the meeting.
Takata said it had no comment on current or former leak tests on its inflaters. In the
past, it has said that any problems with the airbags were a result of manufacturing
errors, not design flaws.
Karl Rink, an airbag industry consultant who has worked with Takata, and a former
engineer at Autoliv, a Swedish-American airbag manufacturer, said he agreed with
Mr. Neff that helium-based testing was inadequate and prone to errors. Mr. Rink
said he had long raised concerns at industry and academic conferences that airbag
makers were not properly testing their inflaters for leaks.
About five million of the vehicles recalled on Wednesday were Toyotas. Of that
total, 637,000 are in the United States and 1.36 million are in Japan. Thirty-five
models were affected, the company said, including top sellers like the Corolla.
Nissans recall covered 1.56 million vehicles.
Toyota and Nissan said they were not aware of any injuries stemming from faulty
airbags in the vehicles recalled on Wednesday, which were manufactured between
2003 and 2007. They described the recalls as investigative and preventive.

Based on the above case study,


1.

Who are the stakeholders?

2.

What are the stakeholders interests in the Toyota and Nissan?

3.

Why do you think both of the companies are recalling their vehicles?

4.

If only half the owners responded to the recall, what would the companys
obligation be?

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