Takata says subject of U.S. criminal probe on air bag flaws

[November 13, 2014]  By Maki Shiraki and Mari Saito

TOKYO (Reuters) - Japan's Takata Corp is the subject of a U.S. criminal investigation over potentially defective car air bags that have been linked to five deaths, a spokesman said on Thursday.

A federal grand jury in U.S. District Court for the Southern District of New York has subpoenaed Takata's U.S. unit to produce documents related to air bag defects, the spokesman said.

The investigation into the Japanese safety-parts maker by federal prosecutors had been previously reported, but Thursday's statement is the first indication that a seated grand jury was seeking evidence.

The National Highway Transport Safety Administration (NHTSA) has also issued a special order demanding documents and other evidence related to air bag defects. Takata has until Dec. 1 to comply with that order.

The company disclosed the probe in a closed-door meeting with financial analysts, according to an account from one participant.
 

Takata told the analysts it is not considering adding production lines to make replacement air bag inflators - the explosive device that allows the air bag to inflate in a fraction of a second in the event of a crash - according to the account.

Since 2000, Takata has made more than 100 million inflators, according to industry estimates and company data. Since 2008, more than 17 million cars equipped with Takata air bags have been recalled, including more than 11 million in the United States.

Separately, Takata disputed a recent New York Times report that it had carried out tests on air bags in 2004 in Michigan and found signs of defects, but did not report the results to federal regulators.

The company said in a rebuttal statement that it believes the Nov. 6 story "was based on serious misunderstandings of the facts." It said it was testing air bags for tears to cushions in the air bag modules, not for inflator ruptures, as reported.

Defective Takata air bags have been found to explode with dangerous force in accidents, sending shards of metal into the vehicle.

A fifth fatality linked to Takata air bags - and the first outside the United States - was disclosed earlier on Thursday, when Honda Motor <7267.T> said a driver in Malaysia died in July after being hit by shrapnel from a Takata air bag.

All five deaths have been in Honda cars. The Japanese carmaker, Takata's biggest customer, widened its recall for the defective air bags by another 170,000 vehicles globally, taking its total recalls to nearly 10 million vehicles.

(Writing by William Mallard; Editing by Ian Geoghegan)

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