| MEXICO CITY/DETROIT/TOKYO
MEXICO CITY/DETROIT/TOKYO Manufacturing problems with Takata Corp (7312.T) air bags go beyond what the Tokyo-based company has disclosed to U.S. safety regulators about why the devices are at risk of exploding with dangerous force, according to internal company documents reviewed by Reuters.
Takata has cooperated with an investigation begun in June by National Highway Traffic Safety Administration (NHTSA) investigators into whether its air bags contain a defect in the inflator - the device at the core of the air bag that allows it to inflate in a fraction of a second in the event of a crash to protect vehicle occupants.
Specifically, NHTSA has been looking in part at whether some Takata air bag inflators made between 2000 and 2007 were improperly sealed, a flaw that could expose the explosive material inside and cause the air bag to blow apart in an accident. That investigation has focused on inflators recovered from cars being recalled for repairs in hot and humid places like Florida. Takata is cooperating with that investigation along with nine automakers.
Dozens of internal Takata engineering reports, presentations and copies of emails reviewed by Reuters show the company struggled to meet its own standards for safety in manufacturing air bag inflators for a decade until 2011 - four years beyond the period now under investigation by U.S. safety regulators.
The documents also show Takata's engineers at its flagship inflator plant near Monclova, Mexico tracked a range of problems that they believed could have prevented inflators from being sealed air-tight at the factory and could have caused them to fail in accidents.
Among the problems recorded by Takata engineers: inflators that were improperly welded or sealed because of mistakes by workers at the Monclova plant or - in one case - because Takata had been using the wrong kind of steel tube, according to the documents.
"A part that is not welded = one life less, which shows we are not fulfilling the mission," Takata supervisor Guillermo Apud told other employees in a March 2011 email in Spanish titled "Defectos y defectos y defectos!!!!" prompted by the discovery of an improperly welded inflator that had been shipped to an automaker. Takata subsequently tightened inspections, records show.
Under NHTSA rules, Takata and other suppliers are under no obligation to report quality control issues like those detailed at the Monclova plant. NHTSA relies on automakers, accident reports and defect claims as the starting point for investigations. Vehicle manufacturers have a responsibility to identify defects that pose a safety risk and report them to NHTSA.
In response to questions from Reuters, NHTSA declined to comment on the manufacturing flaws recorded in Takata documents. The agency said it was "aggressively looking into this potential safety defect issue and was able to get the industry to act despite the uncertainties."
NHTSA said it had not looked at the issue of leaks in Takata inflators before beginning the current probe and had not been notified of manufacturing issues at the Monclova plant. If NHTSA, automakers or Takata determined the inflators under review contain a defect, the investigation would turn to the cause of that flaw, including design and manufacturing issues.
Takata declined to comment in detail. Spokesman Alby Berman said: "Takata remains focused on its mission to produce the highest quality products to ensure the safety of the driving and riding public."
It was not clear whether the improperly welded inflators detailed in those records reviewed by Reuters made their way into vehicles sold in North America.
Still, the problems now coming to light at the plant in Mexico may intensify the scrutiny the Japanese company faces from safety advocates and its customers.
Takata's largest customer, Honda Motor Co (7267.T), has already moved some business to rival inflator maker Daicel Corp (4202.T), a person with knowledge of the matter said. Honda Executive Vice President Tetsuo Iwamura said in July the automaker was reviewing whether to keep buying from Takata.
More than 16 million vehicles globally have been recalled for defective Takata air bags since 2008. That could rise depending on the outcome of NHTSA's investigation. Accidents involving Honda vehicles with defective Takata air bags have caused two deaths in the United States and been linked to another two fatalities, according to the automaker, police and medical officials. In addition, 160 injury claims have been reported to NHTSA, according to a Reuters count of those complaints.
Before June, the prior recalls were linked to problems in the way that the explosive propellant packed into Takata's air bag inflators had been handled between 2000 and 2002, not issues with the inflator now under review by NHTSA. Between June and August, Honda and General Motors (GM.N) recalled another 96,000 vehicles for a separate defect after determining Takata workers at the Monclova plant had put the wrong part into some driver's side inflators.
That defect came to light after GM was sued by a Georgia woman who said a Takata air bag in her Chevy Cruze hit her with such force in a minor accident in October 2013 that it left her blind in one eye. The lawsuit against GM was resolved on undisclosed terms in August.
PROBLEMS IN MEXICO
The manufacturing problems were recorded by Takata workers at the Monclova plant, about a 3-hour drive from the Texas border. That plant began making almost all of Takata's inflators for the North American market beginning in 2005, according to internal presentations.
Starting in 2001, engineers at the plant identified a range of problems, including faulty welding and rust, that they said could have caused inflators to fail, according to records kept as part of an effort to track and manage defects. In 2002, the plant recorded 60 to 80 defects for every million inflators shipped to automakers - six to eight times above Takata's quality control limit, according to an internal presentation.
Between 2001 and 2003, Takata struggled with at least 45 different inflator manufacturing problems, according to dozens of internal reports titled "potential failures" reviewed by Reuters.
On at least three occasions between 2005 and 2006, Takata engineers struggled to eliminate leaks found in inflators made at Monclova, according to engineering presentations. In 2005, Shainin, a U.S. consulting firm, found a pattern of bad welding, documents show. Shainin told Reuters it could not discuss its work with clients.
In April 2011, Apud told other Takata supervisors that chewing gum had been found in an inflator, one of what he called several "grave problems" in inflator production at the Monclova plant. Apud, who was since promoted to engineering manager at Monclova, declined to comment.
In the current Takata probe, NHTSA became involved after three complaints of air bag ruptures in 2013 and 2014 involving cars from Honda, Toyota Motor (7203.T) and Mazda Motor (7261.T).
Defects with Takata air bags have shown up after a lag of years, NHTSA records show.
NHTSA's records for vehicles covered by Takata recalls show 17 cases where drivers reported air bags blowing apart in an accident and shooting out metal or plastic shards. On average, those cars had been on the road for more than seven years before the incident, according to a Reuters analysis of the NHTSA claims data.
In order to derive an approximate age for those vehicles, Reuters looked at the difference in years between the model-year of a vehicle involved in a reported Takata air bag rupture and the date of the accident recorded in the NHTSA complaint database.
Takata - the world’s second-largest supplier of auto safety parts behind Sweden's Autoliv (ALV.N), and just ahead of rival TRW Automotive Holdings Corp <TRW.N - has taken almost $750 million in charges over the past two years for the recalls, and its stock is down by almost 29 percent this year.
(Editing by Kevin Krolicki and Ian Geoghegan)