In 2014, Japanese airbag maker Takata had a problem.
Takata’s ammonium nitrate inflators – now in 70 million cars in the United States and an equal number overseas – were ticking time bombs – with some exploding like hand grenades, blowing shrapnel into the passenger compartment and severely injuring or killing passengers.
Takata turned to Jerry Cox. Cox was an airbag proponent. He knew that airbags had saved tens of thousands of lives.
Cox had a simple prescription for Takata’s problem – come clean and tell the truth.
While Takata executives in the United States agreed with Cox, Takata headquarters in Tokyo did not. Instead, they listened to other inside the Beltway lawyers who argued for putting on the payroll former government officials and prosecutors and stonewalling.
Cox cut ties with Takata at the end of 2014.
In 2016, Cox stumbled across a picture on the internet of Joel Knight. Knight was out driving his pickup truck and hit a cow. It was a minor accident, but the Takata airbags deployed, the canister blew like a hand grenade sending a chunk of shrapnel the size of a hockey puck through the airbag and through Knight’s neck – killing him instantly.
Cox broke down and cried when he saw the picture. And he vowed to tell the insider story of how Knight and now at least 23 others have been killed and more than 300 have been injured by Takata airbags.
Cox has now written a tell all book titled — Killer Airbags: How to Protect Yourself from the Worst Disaster in Automotive History. (www.killerairbags.com) It will be published later this year.
What makes it the worst disaster in automotive history?
“We’re up to at least 24 people killed and another 300 injured, which is less than the 114 killed and 1,400 injured in accidents caused by GM’s faulty ignition switch between, roughly, 2005 and 2012,” Cox told Corporate Crime Reporter in an interview last week. “Still, I would say the Takata situation is worse in a number of respects.”
“The body count is just getting started and will stretch over a much longer period. The first rupture occurred in 2003 and new ones undoubtedly will happen for at least another ten years – say, to 2030. That will be 27 years of needless deaths and injuries, and no one can predict accurately how many will occur before it’s over.”
“Other motor vehicle safety defects result in various types and degrees of injuries, but Takata’s airbags inflict unimaginably horrific damage. Reported injuries range from teeth being shot down people’s throats, eyeballs scooped out, ears and noses sliced off, facial bones crushed, gaping head wounds, jugular veins and carotid arteries sliced through, throats ripped open, blunt-force trauma to people’s sternums, skulls and brains, not to mention beheadings.”
“The Takata recalls have already cost more money and involved more individual products that any recall for vehicles or any other consumer product in history.”
“The Takata bankruptcy was the biggest failure of any Japanese industrial company, ever. It protected Takata’s creditors – mostly Japanese car manufacturers – and set aside only a pittance for victims.”
“The government unwittingly encouraged executives in other companies to apply the ‘fight club formula’ instead of obeying consumer protection laws. In other words, they won’t initiate recalls unless it would be cheaper than settling personal injury and wrongful death claims. Failure to prosecute anyone for obvious and repeated violations of the law increases what economists call moral hazard – a lack of incentive to guard against risk where one is protected from its consequences.”
“Auto industry executives proved once again that it is cheaper and easier to buy influence in Washington to blunt safety investigations than it is to make safer products,” Cox said.
“Neither the government nor the independent monitor has exposed the roles former top government officials played in keeping Takata’s defects under wraps between 2003 and 2015.”
“The revolving door made some people in Washington rich off of the misery of Takata’s victims. Takata’s lawyers used to be NHTSA’s lawyers. Takata’s criminal defense lawyers used to be federal prosecutors. Industry will always pay vastly better than government service. President Trump took it to a whole new level when he put Takata’s lead lawyer in negotiating the schedule for future recalls and repairs in charge of the whole Department of Transportation.”
“It is morally outrageous that the government let life-saving devices become life-takers.”
“My biggest concern is that we have learned nothing and that the way the Takata fiasco unfolded, we’ve just set ourselves up for an even bigger, bloodier mess in the future.”
How did you become involved with Takata?
“The Takata folks from Japan came to Washington in 2013. By that point, at least three people had been killed and several dozen people had been terribly wounded by Takata’s airbags. They met with their lobbyists in town and told them on the QT – we have this dark secret in the closet.”
“Honda wanted to give some of its 2001 models a price advantage and pressed Takata to develop a cheaper airbag system that would also make less of a mess inside a car when the airbag deployed.”
“In 2000, Takata started experimenting with ammonium nitrate as the propellant because it burned cleaner and cost one-tenth as much as other explosives.”
“The explosive wafers initially were shaped like shark fins and batwings. Honda insisted on the batwing design and pressed Takata to speed up its development.”
“Takata told their lobbyists they had done tests where the ammonium nitrate blew up. It basically turned the canister into a hand grenade. Their lobbyists encouraged them to move to full disclosure, let people know that had occurred, but Japan chose not to.”
“The American executives who attended that meeting saw that the strategy that Japan was following was not going to work. One of those executives was the executive vice president of Takata. He went looking for somebody to do some strategic corporate communications planning for Takata. And he found me. The fact that it was known that I was a proponent of airbags in cars was a big plus. And the fact that I knew the history of the implementation of the airbag requirement was something they found attractive. I was hired in January 2014.”
“The American Takata executives knew what the strategy was in Japan. In Japan, they have a saying – if it stinks, keep a lid on it. That was the approach Japan was taking about the problem they were having with these ammonium nitrate powered airbags.”
“The question was – what are we going to do when that strategy stops working? My response to that was – you tell the truth. You let people know what happened, that you are on top of it, what you are doing from keep it from happening and how you are going to fix it. You have to have American executives willing to stand up and say – we are not going to sell any more of these things until we get this sorted out. We are going to extraordinary lengths to not only recall but repair these things that we put into people’s cars. At that point, they were already in multiple millions of cars.”
“Instead of following my advice, they had a counter proposal from a former U.S. Secretary of Transportation who told them that the only thing they needed to do was to go out and recruit more allies and confidants inside the beltway. That was basically telling Tokyo what they wanted to hear. And within a very short period of time after that, instead of doing what I proposed, they went out and hired every former Secretary of Transportation, every former NHTSA administrator, anybody they could find who was still breathing – they hired them to set up what they called a quality assurance panel. And they asked the panel to publish a report. That report was specifically circumscribed by Tokyo. The one thing they couldn’t look at was the issue of the airbag inflator.”
“I will name names in the book. These folks put their reputations on the line, making it look like Takata had a grip on things.”
Had the company listened to your advice to come clean with the truth, would the lives of Joel Knight and the others who died subsequently by Takata airbags been saved?
“That is what tortures me – that question. I have to wonder, if they had listened to me, if maybe I had been more persuasive, if I could have somehow overcome the other advice they were getting from other former government officials in the United States to just keep a lid on it, I would like to think that Joel Knight would have been home for Christmas with his kids and wife and grandkids. But he wasn’t. They buried him on December 27, 2015. They had a body that was basically in two pieces. And the reason? This was not taken seriously. The manufacturer recognized that if the problem really was the design, the choice of ammonium nitrate, and not just the people doing stupid things during the manufacturing process down in Mexico, like leaving the explosives sitting out in humidity over the weekend or between shifts. And that happened. And that’s one of the reasons why those earliest inflators are the most dangerous.”
“Nobody could bear the thought that this was a design defect – that the choice of ammonium nitrate was the problem here. If they had let themselves think that they would have realized that they were talking about a total recall, that every single inflator – 280 million inflators that Takata put out before they went bankrupt would have to be recalled and that would involve 70 million cars.”
“As of now, NHTSA has only required them to recall 42 million cars out of the 70 million. And many of those inflators were replaced with other ammonium nitrate inflators.”
Takata also had encouragement from Honda.
“A Takata executive told me in January 2014 – “Honda is not making an issue about this. Best to just lay low and not talk about it.”
Cox says that the book will be published by the end of the year.
In 2017, Takata pled guilty to one count of defrauding Honda and the other automakers — not to causing death and injury of automobile passengers.
We asked Honda to respond to the Takata executive’s claim in January 2014 that “Honda is not making an issue about this. Best to just lay low and not talk about it.”
Honda did not respond to that inquiry but instead sent a statement saying that “Takata pled guilty to deceiving Honda and other automakers.”
“As Takata admitted in court, Honda and others were ‘victims’ of Takata’s ‘scheme to defraud.’ With a complete focus on taking care of our customers, Honda’s response to the Takata inflator recalls leads the entire industry in repairing defective airbag inflators. In total, we have replaced approximately 14.9 million Takata inflators in this industry wide, multi-phase recall, which is unprecedented in the history of the U.S. auto industry. Honda is committed to replacing or accounting for all of the recalled Takata airbag inflators installed in Honda and Acura vehicles in the United States.”
[For the complete q/a format Interview with Jerry Cox, see 33 Corporate Crime Reporter 39(8), Monday October 14, 2019, print edition only.]