There continue to be developments concerning Takata’s exploding automotive airbag inflators, and it doesn’t appear they will end anytime soon. As would be expected in a recall this large, there are implications for Takata and automakers, as well as numerous other companies in the automotive industry.


Reuters reported late last month that the National Highway Traffic Safety Administration (NHTSA) continues to investigate whether the recalls of nearly 29 million defective Takata airbag inflators in the U.S. should be expanded to include another 70 million to 90 million inflators with ammonium nitrate, citing evidence that Takata manipulated data to cover up problems with its products. The next day, U.S. Senator Bill Nelson cited the Reuters report on the Senate floor, and said it was “puzzling” that NHTSA has allowed Takata to continue production of ammonium nitrate-based inflators indefinitely.


“Why aren’t they taking a more aggressive approach? And what’s going on after all of these inflators, based on what we see with ammonium nitrate, have been exploding?” Nelson asked, Reuters reports. The current recall may have to be redone, Nelson said, “because auto manufacturers are installing new live grenades into people’s cars as replacements for the old live grenades.”


The airbag inflators in question can rupture with deadly force, spraying shrapnel at vehicle occupants. Orbital ATK, on behalf of a coalition of 10 automakers, recently completed detailed testing on the inflators. It determined that the ruptures were caused by a combination of three factors: ammonium nitrate propellant without moisture-absorbing desiccant, long-term exposure to repeated high-temperature cycling in the presence of moisture, and an inflator assembly that does not adequately prevent the intrusion of moisture.


One consequence of the recall is that due to the sheer volume, Takata simply cannot quickly meet demand for millions of replacement airbags. This presents an opportunity for other companies, which has not gone unnoticed. Indeed, Sweden’s Autoliv Inc., Japan’s Daicel Corp., Germany’s ZF Friedrichshafen AG and U.S.-based Key Safety Systems have all ramped up production to supply automakers that need to replace Takata inflators, as well as equip future vehicle models with airbags with which safety regulators are confident.


Chinese company Ningbo Joyson Electronic has seized on the global airbag crisis as an opportunity to enter the market, a Bloomberg article reports. The company has grown into one of China’s largest suppliers of automotive components, counting General Motors and Volkswagen AG among its major customers. The company recently acquired Key Safety Systems for $920 million in cash from private-equity firms in February.


“It’s very difficult for Takata to recover from this, and the company may be facing a bankruptcy crisis,” Joyson CEO Tang Yuxin said in a phone interview with Bloomberg. “All of this has given us a heaven-sent opportunity to enter the industry.”


Furthermore, by integrating its existing drive-control systems with Key Safety’s safety technology, Joyson aims to minimize injuries and deaths by detecting possible collisions and automatically triggering brakes and deploying airbags, Tang said. Key Safety, which was already ramping up inflator capacity two years earlier than scheduled before Joyson’s acquisition, probably will boost revenue this year by 25 percent to more than $2.5 billion—half of which will come from the airbag business, according to Tang.


As consumers demand replacement airbags, it leaves automakers in a predicament because Takata cannot meet such demand. As other companies ramp up production, it does help meet demand, as well as their bottom lines. That said, there is still more demand than supply.


Do you think other companies will in turn bring new products to market so they too may seize opportunity? Also, what will the long-term consequences for Takata be?