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A $750 Million Fiasco?


News: Analysis & Commentary: AUTOS

A $750 MILLION FIASCO?

It could remain a quiet preliminary investigation--or turn into one of the biggest automobile recalls of all time. At the very least, it should ensure that from now on carmakers offer a lifetime warranty on seat belts.

The National Highway Traffic Safety Administration has identified more than 6 million Japanese-built vehicles outfitted with possibly defective seat belts made by Japan's Takata Corp. The suspect buckles are used by every Japanese carmaker except Toyota Motor Corp. and are on some vehicles built for General Motors, Ford, and Chrysler. The potential cost of a recall: $750 million or more.

The feds are just beginning their investigation. But a recall is "almost inevitable," says Clarence M. Ditlow, executive director of the Center for Auto Safety, a consumer group in Washington, D.C. "The real question is, are you buckling up properly--with a buckle that may fail?"

NHTSA last summer asked American Honda Motor Co. for evidence of failure of certain Takata belt buckles in 1986 to 1991 Civics. Honda found 6,800 cases where it had replaced or repaired the seat belts in the 1.5 million cars under investigation. NHTSA in October upgraded the Honda inquiry to an engineering analysis, the step before the full-fledged investigation leading to a recall. It also started looking at other Japanese brands.

Honda has reported eight accidents that may involve the belt and is a defendant in three related lawsuits. But it downplays the problem. "There was not a single confirmed instance where the belt failed during an accident," says a U.S. spokesman. While admitting "the broken [release] buttons are a fact," Takata's Hiroji Nakano, general manager of legal affairs, says, "Our buckle...is state-of-the-art."

Honda already covers its belts, in fact, with a lifetime warranty, a policy instituted to head off a recall in 1986. Now, that warranty may cost far more than Honda ever expected.By Larry Armstrong in Los Angeles, with Robert Neff in Tokyo


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