TESTIMONY OF
KEVIN M. KENNEDY
EXECUTIVE VICE PRESIDENT OF NORTH AMERICA
TK HOLDINGS INC. (“TAKATA”)

BEFORE THE
HOUSE COMMITTEE ON ENERGY AND COMMERCE
SUBCOMMITTEE ON COMMERCE, MANUFACTURING, AND TRADE

HEARING ON
“AN UPDATE ON THE TAKATA AIRBAG RUPTURES AND RECALLS”

JUNE 2, 2015

 TESTIMONY OF
KEVIN M. KENNEDY
EXECUTIVE VICE PRESIDENT OF NORTH AMERICA
TK HOLDINGS INC. (“TAKATA”)
Chairman Burgess, Ranking Member Schakowsky, and distinguished Members of
the Subcommittee, I am honored to be here today on behalf of Takata and our employees
in Michigan, Texas, across the United States, and around the world who are dedicated to
making products that save lives.
For Takata, safety is more than an obligation; it is the core of who we are and what
we do. We are proud that millions of Takata airbags have inflated properly, preventing
thousands of deaths and avoiding serious injuries in hundreds of thousands of accidents.
We are also proud of our seatbelts that save lives, the spacesuit materials we make to
protect our astronauts, and all the other high-quality products Takata manufactures.
It is unacceptable to us and incompatible with our safety mission for even one of
our products to fail to perform as intended and to put people at risk. We deeply regret
each instance in which a Takata airbag inflator has ruptured, especially in those cases
where someone has been injured or killed.
We understand how important it is to the driving public, Congress, the National
Highway Traffic Safety Administration (“NHTSA”), and our automaker partners to
address and resolve the safety concerns raised by the airbag ruptures, and we are
committed to doing everything in our power to help achieve that goal.
So let me tell you what we are doing.
TAKATA’S AGREEMENT WITH NHTSA
After months of testing and analysis of returned inflators and extensive
discussions and collaboration, we voluntarily agreed with NHTSA to take broad actions,
in conjunction with the automakers, to respond to the public safety concerns.
This agreement contemplates dramatically expanded recalls―including in several
instances nationwide recalls―encompassing various types of airbag inflators.
The proposed recalls and the related commitments we have made go well beyond
the scope of the safety risk suggested by the current science and testing data.
There are two categories of airbags designed to protect vehicle occupants against
front-end collisions: driver airbags, located in the center of the steering wheel, and
passenger airbags, located in the dashboard. The agreement we reached with NHTSA
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 contemplates actions to replace several types of both driver and passenger airbag
inflators.
I will describe how the agreement addresses each in turn.
Driver Airbag Inflators.
Most of the ruptures that have occurred in vehicles on the road have involved
older versions of our driver airbag inflators. These are the driver inflators with the
original “batwing-shaped” propellant wafers.
Our proposal is to replace all of these inflators through a national recall.
To date, there have been a total of 67 reported instances in the U.S. of such “field
ruptures” involving these “batwing” driver inflators. Fifty-eight (58) of those ruptures
occurred in vehicles that were already subject to previous recalls involving identified
issues with the pressing of the propellant wafers in some of these inflators.
All of the fatalities and most of the injuries that have occurred in accidents with
ruptured airbag inflators in the United States have involved batwing inflators.
To put these incidents in perspective, the 67 reported cases of field ruptures
involving the older batwing driver inflators represent approximately 0.0087 percent of
estimated total deployments of these airbags, or fewer than 9 failures out of every
100,000 deployments. In addition, most of these field ruptures occurred in regions of the
country with high heat and high levels of absolute humidity.
In the past several months, Takata has conducted ballistic tests of more than
12,500 of these driver inflators, and 9 of them have ruptured during testing, or
approximately 0.07 percent of the tested inflators. The inflators selected for this ballistic
testing include a disproportionate number of older inflators returned from areas of high
absolute humidity, so the percentage of failures seen in the testing results is likely to
overstate the overall potential for rupture.
Whatever the precise probabilities, these figures show that the fraction of these
inflators likely to experience a problem is extremely small. That is not meant in any way
to minimize the issue. Even one rupture is too many. And six of the reported field
ruptures of these driver inflators have involved fatalities. But these figures do help to put
in perspective why Takata’s Defect Information Reports (“DIRs”) state that a safetyrelated defect “may arise” in “some” of these inflators. It is not the case that all of the
inflators covered by the DIRs are “defective.”
The pattern of ruptures in areas of high heat and humidity is also consistent with
the findings of the scientists that have spent years studying these issues. Takata has
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 engaged world-renowned experts in energetic systems from Germany’s Fraunhofer
Institute to conduct research into the root cause of the inflator ruptures and has also
consulted with various engineering experts in the United States. We have shared all of
that research with NHTSA and the automakers.
Based on this research and our ongoing testing and analysis of returned inflators,
Takata’s best current judgment is that the potential for rupture is related to long-term
exposure, over a period of several years, to persistent conditions of high heat and high
absolute humidity. In certain circumstances, these conditions can result in an alteration
in the propellant wafers in the inflators that could potentially lead to over-aggressive
combustion.
The research of our experts suggests that the potential for this long-term
phenomenon to occur was not within the scope of the testing specifications prescribed by
automakers or comprehended within the industry’s inflator validation practice when the
inflators were originally made.
The potential for rupturing may also be influenced by other factors, including the
possibility of manufacturing issues, like those identified in earlier recalls.
Notwithstanding the science and testing data suggesting that the problem is
focused on a small number of older inflators that have spent years in regions of high heat
and absolute humidity, Takata has taken broader action. We have recommended that all
of the batwing driver inflators in any vehicle registered anywhere in the United States
be replaced in national recalls to be conducted by the affected automakers.
The national recalls recommended for these driver inflators will proceed in four
stages. In order to prioritize the replacement of inflators where the safety need is
greatest, the first stage will target older vehicles that have ever been registered in the
Southern States, Hawaii, and territories where the levels of absolute humidity are higher
than anywhere else in the country.
But the recalls will not stop there. Subsequent stages of the recalls will target the
driver inflators manufactured in later years and vehicles registered in other States outside
the areas of high humidity. The recalls will continue until we have replaced all of these
driver inflators, from start of production to end of production, and they will include
vehicles manufactured by five different automakers―Honda, BMW, Chrysler, Ford, and
Mazda. The final stage of the recalls will include the replacement of batwing driver
inflators that were previously installed as remedy parts in prior recalls.
Takata has also committed to cease producing these types of driver inflators. And
we are working with our automaker partners to transition to newer versions of driver
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 inflators in our replacement kits or inflators made by other suppliers that do not contain
ammonium nitrate propellant.
Passenger Airbag Inflators.
There have been far fewer field ruptures involving passenger airbags: 21 total
reported instances in the U.S. to date (of which most occurred in vehicles subject to prior
recalls), and none has involved a fatality. Nevertheless, our agreement with NHTSA also
contemplates significantly expanded recalls covering several types of passenger airbag
inflators.
One of these proposed recalls will be nationwide in scope. The other two will
focus initially on high humidity States, but with the potential to expand to a nationwide
recall if ordered by NHTSA after consideration of additional testing and consultations
with Takata and the affected automakers. Specifically:
For one type of passenger inflator, we have recommended a nationwide recall that
will proceed in four stages, according to the year the inflator was made. This recall will
encompass all of the inflators of this type from start of production through vehicle model
year 2008, and it will involve vehicles manufactured by eight different automakers.
The root cause assessment for the potential issue with these inflators includes the
long-term exposure to high heat and absolute humidity discussed above, but it also
includes the possibility of a manufacturing issue.
This type of passenger inflator has been involved in eight (8) reported field
ruptures in the U.S., which represents approximately 0.004 percent of estimated
deployments. While it has ruptured at a higher rate in Takata’s ballistic testing
(approximately 0.9 percent out of more than 5,900 tested), all but two of the test ruptures
to date have involved inflators returned from high absolute humidity States. The two
exceptions were inflators manufactured on the same day, which suggests the possibility
of a discrete manufacturing issue.
Takata has committed to continue testing this type of inflator from later model
years and to share this test data with NHTSA, in order to monitor whether additional
action may be appropriate.
For two other types of passenger inflators, Takata has recommended recalls
focused on particular models and model years of vehicles manufactured by certain
automakers. The recalls will initially cover the relevant makes and models of these
vehicles in Florida, Texas, and the other high absolute humidity States and territories.
But there will be the potential for these recalls to expand later to other States and
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 potentially nationwide if NHTSA finds that the results of further testing show the need
for an expansion, after consultation with Takata and the affected automakers.
The scope of the recalls recommended for these last two types of passenger
inflators tracks the results of Takata’s testing and analysis. While there have been 13
reported field ruptures of these inflators, representing approximately 0.0055 percent of
estimated deployments, all have involved vehicles of the specific makes and models
covered by our DIR and all were in vehicles that had spent years in the areas of high
absolute humidity.
In addition, Takata’s ballistic testing of these two inflator types has shown
elevated rates of test ruptures for these inflators when returned from the areas of high
absolute humidity and from the particular models covered in the DIR, and no test
ruptures for the same types of inflators in other circumstances. These results show the
clear importance of long-term exposure to an environment of high heat and absolute
humidity. But they also indicate that something about the particular makes and models of
these cars appears to be correlated with the potential for these inflators to rupture.
Takata has committed to NHTSA that we will continue to test these types of
passenger inflators from other vehicles and from other States to help determine whether
the scope of these recalls should be expanded.
IMPLEMENTING THE RECALLS
The Consent Order that we have agreed to with NHTSA makes clear that NHTSA
will play a central role in overseeing the organization and implementation of these
proposed recalls. NHTSA will convene meetings involving Takata and all of the affected
automakers to organize and coordinate the staging of the recalls, so as to ensure that the
remedy is appropriately prioritized to those vehicles where the public safety need is most
immediate.
The Consent Order also requires Takata, after consulting with the automakers, to
prepare a plan for NHTSA’s approval that outlines the steps Takata will take, both on its
own and in conjunction with the affected automakers, to maximize recall completion
rates and to carry out further testing of inflators to help determine the safety and
appropriate service life of the remedy inflators.
Because the recalls will only succeed if consumers bring their cars in for repair,
we have committed to working with NHTSA and our customers to help inform
consumers about the risks associated with some inflators, and to urge them to respond in
a timely fashion to the recalls that are being implemented.

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 To this end, we are in the process of developing a proactive advertising campaign
for NHTSA’s approval that would be designed for implementation in conjunction with
the automakers, in order to reach greater numbers of vehicle owners and help to ensure
that the recall fulfillment rates will be as high as possible.
ADDITIONAL MEASURES
Let me say a bit more about Takata’s extensive testing program and our ramped up
production of replacement kits to address the needs of these recalls.
Since the hearing in December, we have continued to advance our investigation
into the root cause factors associated with the inflator ruptures. We have performed
ballistic tests on close to 50,000 inflators since September of last year, and that testing
and analysis is ongoing. We also have performed live dissections, propellant analysis for
moisture, chemical analysis, leak testing, and CT scanning.
We continue to fully support efforts by David Kelly and the automakers to do
additional testing and analysis. And we welcome NHTSA’s decision to do its own
testing, as well as to coordinate with us on our testing.
In addition to supporting these ongoing testing efforts, we are continuing to
support the work of the independent Quality Assurance Panel, led by former Secretary of
Transportation Samuel K. Skinner, to ensure that best practices are in place for the
production of safe inflators. We are committed to adopting the recommendations his
panel puts forth, and sharing the findings of the report with you and with the public.
Since December, we also have substantially ramped up our production of
replacement kits to fulfill automaker orders. In December, we were producing
approximately 350,000 kits per month. In May, we produced approximately 700,000
units. By September, we expect to be producing 1 million per month. That is the
capacity that is primarily directed to production for the U.S. market.
And we continue to work with other inflator suppliers to further increase
production of replacement inflators to meet anticipated demand. In fact, half of the
replacement kits we shipped to our automaker customers in May contained inflators made
by our competitors. By the end of the year, we expect that number to reach
approximately 70 percent. As of today, only one driver airbag replacement kit is on back
order, and we will have that remedied in two weeks.
CONCLUSION
In closing, I want to emphasize that we have confidence in the inflators we are
producing today. We have confidence in the integrity of our engineering and our current
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 manufacturing processes. We believe that, properly manufactured and installed, these
inflators will work as designed to save lives.
Of course, we know that the proof is in the data, and that is why we have enlisted
the assistance of the Quality Assurance Panel and why we have agreed with NHTSA to
conduct ongoing testing, including of our remedy parts.
We will continue to do everything we can to ensure uncompromised safety for our
customers and the success of the recall efforts, and we will keep Congress, NHTSA, and
the public updated on our progress.
Thank you, Mr. Chairman.
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