Takata to Act on All Recommendations of Independent Quality Assurance Panel Chaired by Former Secretary of Transportation Samuel K. Skinner

AUBURN HILLS, Mich. & TOKYO

Takata Corporation, a leading global supplier of automotive safety systems, announced today that it has received the findings of an independent review. This review, conducted by the Takata Corporation Quality Assurance Panel (“the Panel”), assessed Takata’s current quality-related operations and organization, including the design and manufacturing procedures for best practices in the production of safe inflators. The full report is available at www.takatapanel.com. Takata plans to act on all of the Panel’s recommendations.

“We greatly appreciate the important work done by Secretary Skinner and the other distinguished members of the Panel. As the report notes, Takata has longstanding quality strengths and continues to take steps to further improve quality, design and manufacturing procedures and practices. The Quality Assurance Panel’s report provides an additional set of clear, actionable steps to ensure that we support a best-in-class quality program. We have thoroughly reviewed the Panel’s recommendations, and we intend to act on them,” said Shigehisa Takada, Chairman & CEO of Takata. “Takata’s products play a critical role in protecting the driving public, and we understand that the quality of our operations needs to be beyond question. We are committed to earning back the trust of automakers and the driving public. We will do everything we can to achieve this.”

The publication of the report fulfills Takata’s promise made a year ago to convene an independent panel of experts to review its current quality practices and to make the Panel’s findings public. The report outlines specific recommendations for Takata in four distinct areas: addressing quality concerns; ensuring quality in Takata’s design and manufacturing process; promoting quality through improved management practices; and creating processes to ensure implementation of the recommendations.

As noted in the Panel’s report, “Since its inception, the Panel has had Takata’s full cooperation and support. Takata has answered every Panel request, and has—in the Panel’s view—strived for transparency. Several of the quality gaps discovered were identified by Takata and are currently being addressed.”

Recent actions Takata has taken to enhance quality, in addition to the creation of the Panel, include:

• Increased investment in manufacturing processes and equipment, testing facilities and staffing, including:
  • Adding more than 100 additional staff in key positions at the plant and regional levels of the Takata North American quality organization.
  • Making capital investments of more than $160 million in its Inflator Group and North American Safety organization, including implementing state of the art automation in its manufacturing processes and additional equipment.
  • Strengthening Takata’s culture around quality issues by forming and implementing a dedicated Product Safety Group and Takata Quality Drive Initiative, and committing to further build on its associate-driven Quality Circles program.
• Retaining an independent monitor as part of the consent agreement with NHTSA announced on November 3, 2015.
• Making changes in leadership of its U.S. subsidiary, TK Holdings Inc. (TKH), to further strengthen its focus on quality and safety, including appointing Eric Laptook, who joined Takata in October 2015, as General Counsel, Chief Compliance Officer and Chief Safety Assurance and Accountability Officer of TKH, with independent authority within Takata to oversee safety programs and processes.
• Strengthening the Company’s compliance processes, including an improved Whistle Blower Hotline program.
• Implementing a Data Vault for critical inflator testing at U.S. facilities to ensure that all testing results and testing reports are reliable and accurate, and expanding the vault approach into new testing areas.

In addition, Takata continues to address the current airbag inflator issue by reaching out to affected vehicle owners, extensive product testing, replacement kit production and phasing out of certain inflators.

“Get the Word Out” Campaign: On October 19, 2015, Takata launched a digital advertising campaign to raise awareness of the recalls, initially focused on U.S. states and regions with high heat and absolute humidity. The campaign, which represents a first among automotive suppliers, has generated:

• More than 560 million ad impressions in the targeted states and regions.
• Approximately 750,000 visitors to the airbagrecall.com website, which provides information on the recalls, and more than 155,000 outbound clicks to Safercar.gov or automaker VIN lookup websites.

Phase out of Non-Desiccated PSAN Inflators: Takata has agreed to implement a series of actions in connection with the NHTSA Consent Order in November, including phasing out of the manufacture and sale of non-desiccated Phase Stabilized Ammonium Nitrate (PSAN) Takata inflators by the end of 2018. Takata has taken swift action to comply with the phase out of these inflators and is well ahead of schedule. Currently, less than 2% of driver inflators manufactured for U.S. automobiles contain non-desiccated PSAN.

Replacement Kit Production: Takata continues to take steps to increase the production of airbag replacement kits in support of automotive recalls and safety campaigns. To date, the Company has produced over 12 million kits. Currently over 66% of replacements kits include non-ammonium nitrate inflators manufactured by other suppliers. Takata has increased production capacity to 1.5 million replacement kits per month, up from 350,000 per month in December 2014.

Airbag Inflator Testing: To date, Takata has tested more than 180,000 returned inflators. This extensive testing work, and the research by the Fraunhofer Institute, one of the world’s leading applied research organizations, continues to show that exposure over a period of many years to a climate of persistent heat and high absolute humidity are the primary factors in the small number of inflators that have malfunctioned.

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 58 facilities in 21 countries with more than 48,775 global employees worldwide.

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Media:
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Jared Levy/Robert Rendine
212-687-8080
media@takata.com
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Japan
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