General Motors Co. faces potential liabilities of $870 million if it has to replace 6.8 million Takata airbags in cars, full-size trucks and sport-utility vehicles, according to documents filed by the company with the U.S. Securities and Exchange Commission.
The company doesn’t believe there is a safety defect at this time in any of its vehicles related to the airbags it has filed reports with the National Highway Traffic Safety Administration, covering 2.5 million full-size pick-up trucks and sport utility vehicles.
“As a result of discussions with NHTSA and as described in the Preliminary DIR, GM will have an opportunity to prove to NHTSA that the inflators in these vehicles do not pose an unreasonable risk to safety,” the company noted in the filing.
However, if GM does not show by September 2016, 120 days prior to the due date of the next report, the company acknowledged, “We will be obligated to repair the front passenger airbag inflators in these vehicles,” the SEC filing said.
“We presently believe that the results of further testing and analysis will demonstrate that the vehicles do not present an unreasonable risk to safety and that no repair will ultimately be required,” GM reported.
(Daimler predicts profits despite Takata mess. For more, Click Here.)
GM’s analysis indicates that the inflators within the scope of the Takata DIR and the amended consent order are performing as designed, show no significant signs of propellant degradation and don’t pose an unreasonable risk to motor vehicle safety through 2019.
Actually, the company isn’t sure that the airbags pose any danger any way, if at all, given the “unique vehicle platform and design characteristics of the vehicles and the differences in the airbag inflators in those vehicles,” the company wrote in the filing.
(Click Here for details about the feds recommending some Honda owners park their vehicles.)
GM isn’t the only automaker facing significant financial penalties because of the defective. Daimler AG this week disclosed it had taken a one-time charge of 499 million euros to cover the cost of recall of Mercedes-Benz cars and vans equipped air bags.
Takata itself is facing huge financial penalties as evidence the company has covered the full extent of the problem, which is particularly acute in climates with high humidity that destabilize the accelerant that deploys the airbag in a collision.
(Takata CEO set to resign in wake of airbag scandal. Click Here for the latest on this story.)
In addition, engineers auditing the results of tests done by Takata have uncovered evidence the company has falsified the data from test of airbags.