Takata Statement before U.S. Senate Commerce, Science, and Transportation Committee

AUBURN HILLS, Mich. & TOKYO

Takata Corporation, a leading global supplier of automotive safety systems, today announced that Takata Holdings Inc. (“Takata”), a subsidiary of Takata Corporation, today testified before the U.S. Senate Commerce, Science, and Transportation Committee. The full oral statement of Kevin M. Kennedy, Executive Vice President of North America, Takata Holdings Inc., as prepared for delivery, is as follows:

Oral Statement of Kevin M. Kennedy

Chairman Thune, Ranking Member Nelson, and distinguished Members of the Committee, I’m honored to be here on behalf of Takata and our employees throughout the United States.

For Takata, safety is the core of who we are and what we do. We’re proud that Takata airbags have saved thousands of lives and prevented serious injuries in hundreds of thousands of accidents.

It is unacceptable to us for even one of our products to fail to perform as intended. We deeply regret each instance in which someone has been injured or killed.

We will do everything in our power to address the safety concerns raised by airbag ruptures. Our Chairman met twice with Administrator Rosekind and made that commitment personally.

That’s why, after months of testing and extensive analysis, we voluntarily agreed with NHTSA to take broad actions, in conjunction with the automakers, to respond to your concerns and those of the public.

Our agreement with NHTSA contemplates dramatically expanded recalls―including national recalls―going well beyond the scope of the risk suggested by the science and testing.

Based on more than 57,000 tests of returned inflators and years of research by leading experts from around the world, our best current judgment is that the rupture issues are related to long-term exposure, over many years, to persistent conditions of high heat and high absolute humidity. And for some inflators, these issues may also involve potential manufacturing and vehicle-specific factors.

Most field ruptures have involved older inflators in the regions of high heat and absolute humidity, and all analysis to date indicates that the potential for rupture is limited to an extremely small fraction of inflators.

That’s why Takata’s filings state that a safety-related defect “may arise” in “some” of the inflators. Not all of the inflators covered by the proposed recalls are “defective.”

But even one rupture is too many, and so our remedy program is much broader.

Most of the injuries and all of the fatalities in the U.S. have involved driver-side airbag inflators that feature the “batwing-shaped” propellant wafers.

We have agreed to replace all of the “batwing” driver inflators―from start of production through end of production―in any vehicle registered anywhere in the United States.

These recalls will proceed in stages, and the final stage will include the replacement of batwing inflators previously installed as remedy parts. We are ceasing production of the batwing inflators altogether.

There have been far fewer field ruptures involving passenger-side airbags. Nevertheless, our agreement with NHTSA also contemplates significantly expanded recalls for passenger airbag inflators.

To support these recalls, our total production of replacement kits for North America will soon reach 1 million per month. We have augmented our capacity to produce replacement kits by including inflators made by other suppliers.

We are investing in innovation and working with our automaker customers to develop a range of new inflator products.

At the same time, Takata continues to serve its customers by producing airbag inflators that use phase-stabilized ammonium nitrate propellant, which has distinct safety and efficiency benefits over alternative propellants. We have full confidence in the safety of these products.

We’re using various technologies in response to the recalls. The process of qualifying new products takes time, and for certain types of airbags and certain vehicle models, the best solution today is to use existing technologies in place of the original unit.

We agree with NHTSA that it’s absolutely the right response to public safety concerns not to wait, but to replace an older unit with a new inflator. Doing so provides an important safety benefit.

We have agreed with NHTSA to do ongoing testing to verify the safety and service life of these remedy parts. If they need to be replaced in the future, we will act before a potential risk of rupture develops.

We are also supporting the testing work of the automakers and NHTSA, as well as the work of the independent Quality Assurance Panel, led by former Secretary of Transportation Sam Skinner.

And we will work with the automakers to get the word out to consumers to help maximize recall completion rates.

We will continue to do all we can to ensure uncompromised safety, and we will keep you and the public updated on our progress.

Thank you, Mr. Chairman.

About Takata

Takata Corporation is a leading global innovator and supplier of automotive safety systems; including airbag systems, seat belts, steering wheels, electronics, sensors, and child restraint systems, and supplies all major automotive manufacturers in the world. Headquartered in Tokyo, Japan, it operates 56 plants in 20 countries with more than 36,000 global employees worldwide.

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