General motors announced that it will recall about seven million automobiles all over the world to change potentially unsafe Takata air bag inflators. The announcement came a few days after the US government told the automaker that it had to recall about six million vehicles in the US.
GM notes it will not disagree with the government’s decision, though it believes the airbags are 100% safe. The recall will cost the company $1.2billion, about a third of its net incomes so far.
Long-term Bone of Contention
Since 201, the automaker has been petitioning the Highway Traffic Safety Administration over the safety of the air bag inflator canisters. GM insists the airbags are safe and have even been tested on the road. However, the agency denied such petitions saying the inflators carry a huge risk of explosion. On their end, car owners continue to complain that the automaker is outing profit over safety.
Exploding Takata inflators has caused the largest series of auto recalls in the US history – about 100 million inflators – with 11.1 million yet to be fixed. The airbags use volatile ammonium nitrate to fill the airbags in a crash, a chemical that deteriorates with repeated exposure to heat and humidity, and is prone to explode under too much pressure. So far, 27 people have lost their lives due to the inflators, including 18 in the US.
The affected models are full-size pickup trucks and SUVs made between 2007 and 2014. NHTSA says that it has taken four years to analyze all available data to come to the decision. GM now has 30 days to present a proposal to the agency on how it plans to carry out the recall. Dan Flores, GM’s spokesman, notes that none of the inflators has malfunctioned in the field or during lab tests. However, to avoid confrontations with the government, GM is willing to abide.
Already GM has purchased 1.6 million replacement inflators from ZF-TRW, which do not use ammonium nitrate. Car owners are not the only ones celebrating, with the Center for Auto Safety noting that the agency’s decision is music to the millions of car owners who had to wait four years for a definitive verdict.
On Monday, GM shares went up by 3% to trade at $44.21. GM said the replacement will be in phases, depending on the availability of the inflators. This year alone, the project is expected to cost $400million. One particular Takata recalls nearly bankrupted the Japanese company. Hopefully it will not be the case this time.