Takata Executive Says Air-Bag Death Toll Could Rise

The death toll tied to rupture-prone Takata Corp. air bags would likely rise if the Japanese supplier created a compensation fund for victims of the faulty parts, a company executive said during a Senate hearing on Tuesday.

Kevin Kennedy, Takata's North American executive vice president, said he couldn't commit during the hearing to establish such a fund, requested by Sen. Richard Blumenthal (D., Conn.). The faulty air bags, which can explode and send shrapnel flying into vehicle cabins, has so far been tied to eight deaths and more than 100 injuries world-wide.

Sen. Blumenthal asked Mr. Kennedy to give the Senate Commerce Committee an answer in two weeks on whether Takata would create a fund mirroring the one set up by General Motors Co. to compensate victims of faulty ignition switches in older cars.

GM initially tied 13 deaths to the switch, which can slip out of the run position and disable safety features including air bags. The auto maker's fund, run by outside lawyer Kenneth Feinberg and weighing circumstantial evidence to review claims, has so far tied 117 deaths to the problem.

Takata's Mr. Kennedy said such a fund at his company would likely uncover additional deaths. "I believe it is likely as many of these parts are still in the field," he said.

The hearing comes as car makers are fixing roughly 32 million vehicles equipped with the faulty air bags in the largest automotive recall in U.S. history. Federal auto-safety regulators, now informed of all vehicles affected by the recalls, have revised the figure downward from nearly 34 million.

Mr. Kennedy faced additional questions about the continued use of ammonium nitrate in air-bag inflaters, and said it was only a possible contributing cause to explosions. The company has said humidity and moisture seeping into inflaters, as well as possible manufacturing processes, are also possible causes.

A Fiat Chrysler Automobiles NV executive, meanwhile, said the company as of June 8 started replacing all driver-side air-bag inflaters involved in the recall with parts from TRW Automotive Holdings Corp. as Takata and auto makers continue searching for the root cause of the safety problem.

"We were fortuitous to find an alternative," said Scott Kunselman, Fiat Chrysler's head of vehicle safety and regulatory compliance. "We did quickly move here to gain confidence that this would be a permanent solution…this is why we took this path."

Earlier in the hearing, the National Highway Traffic Safety Administration's campaign for additional funding met resistance in the wake of a government audit detailing an agency racked by problems preventing it from protecting consumers from vehicle defects.

Lawmakers from both parties questioned giving more money to the agency after a report from the Transportation Department's inspector general showed regulators missing signs of GM's faulty ignition switches. The inspector general's report also cited broad gaps in the way NHTSA officials collect and assess information on all possible auto defects, including an overreliance and car makers to report problems.

"I'm not about to give you more money until I see meaningful progress on improving internal processes in this organization," said Sen. Claire McKaskill (D., Mo.), addressing NHTSA chief Mark Rosekind. "The driving public deserves so much more from the cop on the beat."

Citing previous experience as an auditor, she called the inspector general's audit one of the most troubling she's seen of a government agency. She pointed to differing opinions among NHTSA officials over when to even open a safety-defect investigation.

Calvin Scovel, the Transportation Department's inspector general and author of the audit, said giving more money to an agency "whose processes are not in line in the first place does not seem like a good idea." Sen. John Thune (R., S.D.), the committee's chairman, echoed remarks earlier this week that shortcomings among auto-safety regulators "cannot be solved just by throwing money at the department."

The agency says it is understaffed and lacks resources to keep up with a deluge of vehicle complaints, investigations and recalls. NHTSA chief Mark Rosekind said the agency's $10.6 million budget for defects investigations is 23% lower than a decade ago when adjusted for inflation. The agency wants an additional $23.64 million for investigations staff. The agency is implementing 44 specific reforms, including 17 recommended by the inspector general.

Other lawmakers, including Sens. Bill Nelson (D., Fla) and Blumenthal said they supported investing more with auto-safety regulators. Sen. Nelson cited one person at the agency initially reviewing vehicle complaints that total about 80,000 each year.

Write to Mike Spector at [e-mail]

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