Senators fear consumers will be on the hook for replacing Takata airbags

Senators fear consumers will be on the hook for replacing Takata airbags
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Two Democratic senators are worried that consumers may be on the hook for replacing defective Takata airbags if the company declares bankruptcy or undergoes a major restructuring.

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In a letter to the National Highway Traffic Safety Administration (NHTSA), Sens. Richard Blumenthal (D-Conn.) and Ed MarkeyEdward (Ed) John MarkeyDemocratic White House hopefuls push to expand health care in US territories Democratic White House hopefuls push to expand health care in US territories Hillicon Valley: Democratic state AGs sue to block T-Mobile-Sprint merger | House kicks off tech antitrust probe | Maine law shakes up privacy debate | Senators ask McConnell to bring net neutrality to a vote MORE (D-Mass.) questioned how the safety agency is ensuring that Takata will be able to fulfill its consent decree over defective airbags.

The letter comes amid recent reports that the Japanese auto parts maker may be soliciting new investors to help it deal with the financial fallout from the largest auto recall in U.S. history.

“We remain extremely concerned that in the event of Takata’s bankruptcy or significant restructuring, it could be consumers who are left with the costs of repairing their defectives vehicles,” the pair wrote.

Defective Takata airbags have been linked to at least 11 deaths and hundreds of injuries. 

Takata uses ammonium nitrate to fill its air bags in a crash, but the chemical can deteriorate and burn too fast when exposed to heat and humidity for long periods. Those air bags then become volatile and can explode with too much force, spraying shrapnel into the vehicle.

Markey and Blumenthal – who have long criticized the slow pace of Takata recalls – urged NHTSA to take “all necessary” steps to ensure that consumers are not stuck footing the bill for defective airbags.

The lawmakers also asked the agency to verify how they will make sure that victims of Takata airbag deaths or injuries will be able claim and receive compensation if there are new investment arrangements within the company.

“We have reason to believe that the circumstances surrounding Takata’s financial viability have deteriorated,” the senators wrote. “Analysts have estimated that additional recalls could add $6 billion to its pre-existing liabilities in this manner.”