Takata Recall Crisis Forces Out Company PresidentDecember 24, 2014
The Board of Directors of troubled auto parts manufacturer Takata has responded to the global Takata recall crisis by ousting company president Stefan Stocker. The board voted to replace Mr. Stocker with current chairman Shigehisa Takada, the grandson of the company’s founder. The Takata recall crisis has prompted several major automakers to issue recalls on millions of vehicles. A company spokesperson said that the changes would allow Takata to create a cohesive response to growing recalls and streamline the firm’s decision-making processes.
Exploding Airbags Spur Takata Recall Crisis
The Takata recall crisis started when reports surfaced about the chemical used in the airbag inflation systems. The chemical, ammonium nitrate, showed signs of becoming highly volatile in humid conditions. Police reports have cited at least five fatal accidents in which the Takata airbag assemblies exploded, spewing shards of metal and plastic into the driver and front passenger seats. The company initially issued limited recall notices to vehicle owners in humid areas, but many of the company’s customers expanded their recalls to include vehicle owners from around the U.S., expanding the Takata recall crisis across the country.
Company Responds To Takata Recall Crisis
Some observers have noticed that the company’s response to the Takata recall crisis follows traditional Japanese corporate tradition. Since many Japanese companies are multi-generational, they often rely on family members in turbulent times. While Mr. Stocker, a Swiss national, will remain with the company as a board member, the firm has relied on Mr. Takada during the Takata recall crisis as its public face. When Toyota Motors encountered a similar situation in 2010, Mr. Akio Toyoda steered the company through its own recall crisis stemming from vehicles that would spontaneously accelerate.
Takata Recall Crisis Forces Executive Pay Cuts
Mr. Takada, Mr. Stocker and three other senior executives will also have their salary cut for the next four months as punishment for the Takata recall crisis. Mr. Takada’s salary will be cut in half, even as he takes on new duties in response to the Takata recall crisis. The company is also under added scrutiny from U.S. federal highway safety agencies and Congressional committees investigating the Takata recall crisis. While automakers such as Ford, Honda and BMW have all issued nationwide recalls on vehicles with Takata airbags, the manufacturer has still not announced a nationwide recall effort.
Source: New York Times
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