US turns up pressure on air bag inflator company that refuses a recall despite deaths, injuries

By AP News

The U.S. government is stepping up its quest to force ARC Automotive Inc. to recall 67 million potentially dangerous air bag inflators by ordering the company to answer questions under oath

Dangerous Air Bags

DETROIT (AP) — The U.S. government is turning up the pressure on ARC Automotive to recall 67 million potentially dangerous air bag inflators by ordering the company to answer questions under oath and threatening fines if it doesn't respond.

NHTSA argues that the recall is justified because two people have been killed in the United States and Canada and at least seven others have been injured by ARC inflators, which can explode with too much force and expel shapnel. The explosions, which first occurred in 2009, have continued as recently as this year.

The special order from the National Highway Traffic Safety Administration asks multiple questions about whether ARC expects any of its inflators to blow apart in the future, and whether it has notified customers about the risk.

The agency wants ARC Automotive Inc., based in Knoxville, Tennessee, to recall the inflators, which can blow apart a metal canister. But ARC is refusing, setting up a possible court fight.

ARC maintains that no safety defect exists, that NHTSA’s demand is based on a hypothesis rather than technical conclusions and that the agency has no authority to order a parts manufacturer to carry out recalls.

NHTSA has tentatively concluded that the inflators are defective. The next steps are a final conclusion, public hearing and potential lawsuit asking a judge to order a recall.

Since ARC inflators can be in both driver and passenger front air bags, people who travel in at least 33 million U.S. vehicles could be at risk.

In the letter, NHTSA asks ARC to explain if it expects inflators to rupture due to something more than "random ‘one-off’ manufacturing problems. More than 1 million ARC inflators have been recalled already due to what the company describes as isolated trouble with manufacturing.

It also orders the company to estimate how many inflators will rupture while in use in the U.S. in the future, and it asks ARC why it changed its inflator manufacturing process in 2018 to install a scope that detects whether welding debris can block inflator vents.

NHTSA contends that byproducts from welding during manufacturing can clog a vent inside the inflator canister that’s designed to let gas escape to fill air bags quickly in a crash. Pressure can build to the point where the canister is blown apart.

A message was sent to ARC Thursday seeking comment on the order. The company has to respond by June 14 or face a maximum fine of $131.6 million and potential criminal penalties.

IMPORTANT NOTICE AND DISCLAIMER

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

Originally published by Associated Press Valuethemarkets.com, Digitonic Ltd (and our owners, directors, officers, managers, employees, affiliates, agents and assigns) are not responsible for the content or accuracy of this article. The information included in this article is based solely on information provided by the company or companies mentioned above.

Sign up for Investing Intel Newsletter