Takata (2000-2015)
What Happened
As of May 19, 2015, Takata is now responsible for the largest auto recall in history. Takata has already recalled 40 million vehicles across 12 vehicle brands for “Airbags that could explode and potentially send shrapnel into the face and body of both the driver and front seat passenger”. This recall will bring the number up to about 53 million automobiles eligible for this recall. In November 2015, Takata was fined $200 million ($70 million paid upfront) by U.S. federal regulators in response to Takata admittance of a default.
Used the unstable chemical compound ammonium nitrate to fill their airbags. Multiple deaths caused from the airbags rupturing and shooting metal fragments at motorists brought the spotlight on takata. Investigators learned a scheme was carried out from 2000 to 2015 to defraud its customers by providing false airbag inflator test data.
Signs Missed
Mark Lillie left Takata in 1999 over concerns with the decision to start using ammonium nitride. He privately brought his concerns to an engineer that served as a liaison between him and the management in Japan, but the concerns were ignored.
Estimated Damages:
All information in this case study is based on data that was found on public domain and official public records.