(Bloomberg) -- U.S. senators called for the Justice Department to open a criminal investigation into a report that auto-parts maker Takata Corp. may have destroyed evidence years before recalling cars for exploding air bags.
Takata secretly tested air bags in 2004 for the possibility that shrapnel could be propelled toward front-seat passengers, then concealed the evidence, the New York Times reported today, citing interviews with two former employees it didn’t identify.
“If the reports are true, the company must be held accountable for the horrific deaths and injuries that its wrongdoing caused,” Democratic Senators Richard Blumenthal of Connecticut and Edward Markey of Massachusetts said today in a statement. “These allegations are credible and shocking -- plainly warranting a prompt and aggressive criminal probe.”
The National Highway Traffic Safety Administration has given Takata a Dec. 1 deadline to answer questions under oath and turn over materials detailing how it’s handled air-bag problems going back to 2000. A Justice Department investigation may result in a fine or jail for executives. Toyota Motor Corp. had to pay a record $1.2 billion penalty for misleading consumers about unintended acceleration in its vehicles.
Tokyo-based Takata’s difficulties in containing the safety crisis are taking a toll on its financial health. The stock fell 7.3% last week in trading in Japan, and investors are demanding record spreads to hold corporate debt.
House Hearing
Senator Claire McCaskill, a Missouri Democrat who presided over three hearings on General Motors Co. this year, also called for the Justice Department to consider criminal charges against Takata.
Representative Henry Waxman, a California Democrat, asked House Energy and Commerce Chairman Fred Upton, a Michigan Republican, to hold a hearing and have committee staff investigate, calling the allegations “deeply troubling.”
The committee has already begun a review of Takata, with bipartisan staff briefings from NHTSA and the manufacturers, Upton said in a statement today. Auto safety will continue to be a committee priority for the rest of the Congress and “well into next year,” he said.
Waxman was joined by fellow Democratic representatives Diana DeGette of Colorado and Jan Schakowsky of Illinois. The lawmakers in a statement questioned whether NHTSA has “the budget or the statutory tools it needs to prevent defective vehicles from being sold to consumers.”
Civil Fines
NHTSA, part of the Transportation Department, issued a rare public advisory last month urging motorists to act with urgency and have Takata air bags replaced in almost 8 million cars recalled by 10 automakers. It has also asked Honda Motor Co., the automaker with the most U.S. models affected, to answer dozens of detailed questions on what was known about fatalities, injuries and manufacturing flaws going back to 1998.
The new allegations “have raised additional concerns about Takata’s handling of air-bag issues and are one of the reasons we’re compelling them to produce documents and answer questions,” Brian Farber, a U.S. Transportation Department spokesman, said in an e-mailed statement.
Both Honda and Takata face civil fines of as much as $35 million if they respond late or with incomplete answers. The information NHTSA is seeking includes details of quality control at the company’s factories, use of contaminated or improperly formulated propellant and a complete accounting of deaths and injuries.
--With assistance from Craig Trudell in Tokyo.
Copyright 2018 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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