Takata Corp. just received two belts of bad news: one of its former executives will face criminal charges in the U.S. and its biggest customer is cutting back on its business with the supplier.
Federal prosecutors obtained one-count indictment against Hiromu Usuda, charging him with conspiring to rig bids and fix the prices of seatbelts that Takata sold to Honda Motor Co. Ltd., Toyota Motor Corp., Nissan Motor Co. Ltd. and Mazda Motor Corp., the U.S. Department of Justice said Thursday.
The indictment is a result of a four-year probe conducted by the U.S. and Japanese governments as well as the European Union. Takata executives have also pled guilty to other charges and paid hefty fines in connection with the price fixing investigation, which has also involved several other suppler companies that feed part to American and Japanese auto parts manufacturers operating in the U.S.
The price-fixing probe is separate from the investigations by the U.S. Department of Transportation and the National Highway Transportation Safety Administration (NHTSA) into faulty airbags in millions of vehicles built by more than a dozen automakers, including Honda, Toyota, Nissan, Ford, General Motors and Audi.
The airbags have been exploding, sending metal fragments into the cabin of the affected vehicles. Takata has blamed the problem on a mixture of degraded propellant that is can be degraded by humidity and has resisted recalls of some of the airbags.
(Honda proclaims 2015 “The Year of Honda.” For more, Click Here.)
The indictment comes just as Takata found out its biggest customer, Honda, is going to start using another supplier, Toyoda Gosei, for airbags on its next-generation Honda Accord coming in 2017, according to Reuters.
(Click Here for details about 2014: The Year of the Recall.)
Honda is generally known for standing behind its suppliers in times of trouble, but it’s recalled more than 13 million vehicles equipped with Takata airbags since 2008. More than 10 million of those recalled vehicles were in the United States and it appears that forced Honda to use a new supplier for its Accords sold in North America.
(To see why despite a shake up at Takata, the supplier still declined to expand the recall, Click Here.)
Toyoda Gosei will supply driver’s-side air bags as well as knee and curtain air bags for the North American version of the Accord. It could use the new supplier for other vehicles as well. It’s already signed an agreement with Autoliv to produce replacement airbag modules for the recalled vehicles to supplement Takata’s production.
The problems at Takata have become an issue for manufacturers because the Japanese based company, which also has extensive operations in North America, is one of only a small group of supplier that furnish critical pieces of safety equipment to automakers around the world.
Michael Strong contributed to this report.