The dubious honour of triggering the largest consumer recall in US history – once held by Johnson & Johnson’s Tylenol – now belongs to the Japanese vehicle parts supplier Takata.
Thirty-four million of the company’s airbags, having been determined to have caused at least six deaths and injured more than 100, will have to be replaced. But it’s not too late to hope some good can come from this misfortune. Ideally, it will serve as a wakeup call for the Japanese government and the global auto industry.
It’s fair to wonder what exactly Takata knew about its defective products and when. The company, however, has never felt compelled to divulge itself. Since revelations first began trickling out in 2008, Takata has resorted to Japan’s standard playbook for corporate scandals. Ignore, deny, delay – then bow deeply, apologise and get back to business as usual.
Japan’s government and media have enabled the company’s obfuscations. Takata chairman Shigehisa Takada and his team weren’t ever hauled in for a parliamentary grilling. And Japan’s media consistently soft-pedalled stories that threatened to shame the national brand. Fortunately, foreign media – and US legislators, who initiated their own investigation – weren’t so quick to let Takata off the hook.
Eight years on, Takata has yet to offer a satisfying explanation for its defective products. Preliminary findings from a German firm Takata hired to supplement its investigation haven’t been very illuminating.
And that should raise troubling questions about the company’s competence. If it can’t locate the flaw that’s linked to the deaths of consumers, perhaps it shouldn’t supply vehicle makers worldwide. (Without further information from Takata, even the US National Highway Traffic Safety Administration had to admit it was unsure if the company’s replacement airbags would be any safer over the long run.)
The Takata debacle is a microcosm of all that’s wrong with Japan’s insular corporate culture – and, to that extent, it’s an opportunity for Prime Minister Shinzo Abe. The prime minister has argued that stronger corporate governance would revive Japan’s economic fortunes, but his efforts have so far been half-hearted. Abe has passed new stewardship and corporate-conduct codes into law, but it’s no secret that they lacked the teeth to bring an 82-year-old behemoth like Takata to heel.
Now Abe has a chance to use his bully pulpit as a way to rally support for stronger laws. He shouldn’t hesitate to deliver a public scolding of Takata, urge investigations of the company, and force some accountability on its executives.
That might increase pressure on Japanese chief executives to publicly break ranks with Takata. We already saw hints of that in February, when Honda said it had “no interest” in offering Takata a financial lifeline. But now that Takata’s mess is threatening to drag down other major Japanese companies, they may feel more inclined to offer such chastisements.
Takata, for its part, would be wise take note of how Toyota responded to its own mass recall. When faced with a crisis related to defective accelerator pedals in 2010, Toyota didn’t hesitate to immediately recall several million cars. Toyota’s forthright acceptance of responsibility turned plenty of heads in corporate Japan. But the company’s subsequent success showed that, in the long run, it’s not the scandal that matters, but how you handle it.
Of course, the question of whether Takata can survive probably misses the point. The better question is, should it? It would certainly be costly for automakers to stop buying from the market-leading Takata; and alternative suppliers such as Sweden’s Autoliv and Japan’s Daicel may not be able to immediately meet demand. But it’s time for the auto industry to take a stand for safety.
BMW, General Motors and Toyota shouldn’t just recall their vehicles, they should recall their loyalty to Takata. The company hasn’t earned those automakers’ business. It also hasn’t earned the continued patience of the Japanese government.