inflater itself? do you know the answer to that question yes or no? >> in my knowledge, the current issue is most likely manufacturing related. not design related. >> it is not manufactured related? >> it is. >> it is manufacture related. okay. mr. shasta, in 2011, toyota relaid a code that could have reported the accuracy of the early warning reports, and additionally in 2012, nhtsa made honda aware that it was underreporting claims. why didn't follow up with the

action? >> thank you. and i understand your involvement in the establishment of the act more than ten years ago, and i can understand the disappointment you feel by the shortcomings that have been evidenced by our company, and i want to explain to you what happened. the problem that we had with underreporting in the act is a systematic problem that began at the the outset. as you know, it went into effect in 2003. they did not properly program computers and set up systems that would at accurately let data flow and feed into treasury reports. it is difficult for me to say, sir, but that setup continued unchecked until 2011, 2012. you are right that an internal honda associate did mention a concern, as well as a discussion with nhtsa.

they asked about the omission of certain incidents in our tread report. we did look into that, sir, in early 2012. we did not look at that effectively. we took action to address that one problem, but sir it did not complete our compliance requirements. >> can i ask for an additional minute just to say. >> without objection. >> and we're going to be asking nhtsa who was found. you did correct it with nhtsa, is that right? you did fess up to nhtsa, right? >> in 2012 we had a problem of converting oral claims to written claims. mr. chairman, we did not close the the loop with nhtsa, we did not act with the urgency we needed to.

>> did nhtsa come back and say what happened? wiz there any dialogue? what was nhtsa's response? >> as you know, sir, we engaged a third party to do an audit in september of this year. we had a dialogue in october of this year about the preliminary findings of that audit. they actually found -- i'm glad we used an outside third party because they found two more instances of our noncompliance. so we discusseded that with nhtsa in october of this year, as you know we just submitted our on monday. and we're waiting for their response. but i think what we've done in the the meantime, sir is begin to fix the computer programs to provide training, to augment the staffing, but most importantly to establish accountability within our organization. there are many functions that feed information for tread.

and we did not designate a single responsible person, and that is our failing, sir. >> yield back. >> thank you. now the chair recognizes the committee member mr. waxman. >> thank you very much, pmr. chairman. on november 18th nhtsa announced a recall of driverside air bags to a nationwide recall. on november 26th, nhtsa formally requested that takata expand to a national recall. but yesterday takata responded that, quote, the currently available reliable information does not support a nationwide determination of safety defect. quote. mr. shimizu, why does takata believe there's not enough evidence to support a national driver's side air bag recall?

>> yes, congressman. we, as you know, we were correcting data, and according to the day we have, there's no -- actually zero from driver side. and we have some money. so based on the data, we should stay focused on this area. and at this moment, there's not enough to change. that's the background. >> do you believe the same thing is food for the regional recalls of passenger side air bags? >> as i said, congressman it came from -- >> now let me see if i can

understand this decision a bit more from the consumer perspective. in the continental united states, the recall only covers cars in florida, isn't that right? >> i'm talking about recalls? >> yes. >> i believe the recalls cover puerto rico, hawaii and some automakers cover even more around the gulf coast. >> but if i have a car with a a takata air bag, usually florida just south of the georgia line, it's an urgent matter that i bring it in for a recall. but if i instead live 15 minutes north of that line in kingsland, georgia, i gather the position is that my car is perfectly safe. is that a correct assumption? >> based on the data we collected, temperature and humidity and also dew point.

we focused on that. so that covers quite a wide area. and if the vehicle is used on the outside area, request that it's safe. >> does that make sense to you? 15 minutes north you're okay. but if you're in florida, just below the line, you got to go in and get a replacement. >> congressman waxman, i think it's also important as we talk about this to distinguish the recalls regarding the manufacturing defects from this more recent regional recall. i just want to make sure that the committee understands that the recalls that we conducted from 2008 through 2014, that were related to specific takata

manufacturing defects, those were national in scope. so for those recalls, we believe we understand the cause of the problem. that is takata's manufacturing defects, and those cars are being called no matter where they are. but we're talking about now is from 2014 to the present. so approximately the last five months. and all of us in the industry have been asked by nhtsa to gather, to do a safety improvement campaign to gather information and bring back inflaters that are in the high humidity states. when we looked at that, we expanded beyond what they asked us to do. >> the idea is that if you're in certain areas the heat and humidity would require to you to comply with the regional recall, but let me just ask a different question. if i live in, say, houston,

texas. it's slightly less humid there, but not by much than jacksonville, florida, can we be certain my car won't develop the same defect that perhaps two or three years later? >> that's a good question, congressman. we asked that question ourselves. and that's why we expanded our regional recall to include texas. >> and mr. shimizu, do you still not know the troot cause of thee air bag failures? >> congressman, this question is asking about recalls -- >> but do you know the root cause of this problem? >> at this moment, we don't have that. we know the factor may contribute to these problems. so that's why we're going to still be searching these. >> well, the confusing contrary uncertain and sometimes purely

nonsensical information comes from takata is confusing to drivers. they don't know whether their cars are safe. this confusion is exacerbated by the different ways that auto manufacturers are handles the situation. for example, until this morning, honda had chosen to expand the regional actions. 13 high humidity states and territories. this morning we learn honda will expand to a national recall on driver's side air bags. when and why did honda expand the recall to the the 13 states and territories? >> congressman waxman, we heard this morning about the request to takata and the answer takata gave yesterday. we have been seriously considering expanding the safety and improvement campaign.

once we understood, we decided to take action. we wanted to take care of all of our customers on a nationwide basis. however, sir, as i said in my momenting statement, we still believe the highest risk is in the southern areas, those high, humid areas and that those should be prioritized with respect to replacement parts. but we believe that our customers have concerns, and our job is to satisfy our customers. so we want to expand the recall, the safety improvement campaign to include all areas of the country. again, keeping a priority on those regional areas. >> thank you very much. >> thanks. >> gentleman's time has expired. the chair recognizes the gentle lady from tennessee. the vice chair of the committee. full committee. >> thank you, mr. chairman. and thank you for your good work on this. and i thank our witnesses for being willing to answer these questions. because we are trying to get to the root cause of this, mr. waxman just mentioned that term

and mr. shimizu, i want to go that direction with you. let's go specifically to the the november 19th new york times article that tries to give a framework, a time line, a chronology to this. we can't solve this problem, and by and large, we talked about what we're doing about this, but let's go back to how we got into this mess in the first place. and why we got into this mess in the first place. and that is covered in some part in this new york times article and mr. chairman, i would like to submit this for the record. it speaks to both mr. waxman's question and to mine. >> new york times article. >> without objection. so ordered. thank you, mr. chairman. from the article it says by 1999, takata researchers in

michigan pressured by executives developed developeded but the engineering team in the plant raised objections to basing a propellant on such a risky compound. now let's talk about that for a minute. i also found michael brenton, a takata engineer stated the following. it was a question that came up. won't that blow up? and number two, mark lily. a former senior engineer with takata. it's a basic design flaw that predispos predisposes it to break apart and therefore risk a catastrophic failure. these all were before you made the decision. you made the decision anyway. to move forward with this. now that's a problem for us and for if the american consumer.

and for the individuals that lost their lives or have lost their eyesight or have been hurt by this. so what was to takata's response to the concerns raised by mr. britton and mr. lily? >> congresswoman, let me explain. about the nitrate that we are using. first it's safe and stable. >> mr. shimizu, i'm sorry to interrupt you. that's not the response that i'm asking you for. i understand what amonium nitrate is. i'm asking you -- you had two people, a senior engineer and a chemical engineer that brought it to your attention tla this was not a wise choice.

i'm asking you, sir. when they brought this to your attention, what did you and your team at takata say in response to these engineers? did you blow it off and say it doesn't matter? it costs less. did you say we think you can get by with this because it's an aggressive propellant? i want to know what your response was to them. >> congresswoman, i was not there at the time, however, i know that's a discussion about selecting them. and chemical properties and also combustibustion characteristics the materials and we can control -- and we can -- >> mr. shimizu, you're avoiding

the question. so let's move on. what was your first date of employment with takata? when did you start to work for them? >> with takata? >> yeah. >> since 1978. >> since -- oh, so you were around? >> yeah. >> so we established that you were around in that time in '99 when this decision was made. let me ask this another way. did any other takata employees or outside parties warn takata about using amonium nitrate propellants in the air bag? anybody else? did you or anybody else warn them? >> you're not aware. so you don't know if anybody else, other than these two engineers warned them that this was a really bad idea? you don't know that? >> no. >> or concerns about using an

ammonium nitrate compellant used at takata? yes or no? or do you know who or when? >> can i confirm your question, please sf. >> okay, were the concerns about using ammonium nitrate as a propellant relaid to executives at takata? do you know if it made it up the food chain? >> i don't know. >> okay. well you have a good team with you. my time has expired. i have i've other questions. i would will submit them in writing. we would like an answer before the end of the year. yield back. >> yes. >> thank you. chair now recognizes gentleman from maryland. i'm sorry. yeah. you are recognized for five

minutes. >> thank you. mr. shimizu, takata, as i understand, has agreed to the recall at its expense with respect to both driver side and passenger side air bags within the region where there are high absolute humidity, is that correct? >> yes, and you said to congressman waxman a moment ago that you do not yet know the root cause of the defect or the problem with the deployment of those air bags with respect to that regional recall. is that correct? >> congressman. we don't identify the root cause yet. that's why we continue collecting the data. we have strong opinion that is a fact will contribute to this defect. >> okay. >> which is high humidity and

temperature. >> mr. chairman, i'm glad to take more time than you want to give me, but the timer is not running. just thought -- um, that was a courtesy. i'll give that back later some time. appreciate it. my question is, if you don't know the root cause, how do you know the replacement part that you're providing solves the problem? is it different enough in its design that you have confidence that the replacement doesn't continue to have the same problem? do you understand my question? >> the current product we are producing right now is produced from the most recent line, which

is done from the previous issues. >> okay. so the production line, the issue is that you can't yet quite identify the root cause that was part of the prior production line that created this problem, but you have confidence that as a result of the new production line, whatever that problem might have been is now solved going forward with respect to the replacement vehicles? mr. schostek, you implied the idea that notwithstanding takata's decision to resist a national recall that to the

extent the automanufactures on their own initiative decided to expand a recall nationally. that's a practical matter that we could end up having a national recall. although i guess there's some differences of opinion by the manufacturers to the scope of that. i'm going to ask mr. westbrook about that in a moment. i tax it that if you on your own initiative decide to expand the recall beyond what takata has agreed to you're making the the decision to at least on the front end, the expense of that replacement, air bag in place, and then i guess down the road you'll try to recover that. is that how it works? as opposed to where they've agreeded to the recall. the expense is absorbed on the front end by takata. is that right?

>> congressman, for us we start and end with our customers. what's right for our customers, and that's the action we're trying to take here. it's true that an an industry, we're going to make it for our vehicles a national safety improvement campaign, it is true we have theorys, but we don't know the cause. so our interest is getting as much information as possible. it's also why it was announced yesterday, and we appreciate toyota's leadership on the issue that we as manufactures have decided we need to share. we need to engage an expert outside third party. takata will continue to do their tests and we'll continue to receive that information from them, but as an industry we are saying -- as an auto industry we're saying it's going to be better for all of us if we can gather information more quickly, and it's in all of our

interests, congressman, to find the cause and be able to reassure all of our customers and reassure the public of safety on the the rods. >> mr. westbrook, may i ask you because i have just one minute. i understand that honda supports the national recall on the driver's side air bags. and on the passenger's side, which, by the way, on the driver's side, takata cause not support that. takata does not support it on the passenger side. but bmw does support it on the passenger's side. although not on the driver's side. right? and that may be because bmw is concluding there may be some other problem specific to the passenger's side air bags that

even goes beyond or is separate from from this other issue we been talking about. can you just briefly -- you've got 15 seconds explain this? >> we have a unique design on the the passenger side that may not be known to the committee. the passenger air bag is unique to the design and manufacturer. from takata in 2013, we had the first indicator through production processes. in 2014 they gave us another indication that due to high absolute humidity areas we might have a risk. we took a third indicator that the unique design could create the risk of additional air bag-related injuries and not related to a reptured inflatee, because as of today we had never seen one single ruptured inflater. we're trying to cover the customers. we they they deserve that. we're complying with what nhtsa has sanctioned, excuse me, the

local or regional campaign, which we are working on now. we will inindependent testing. we are under contract with a well known european testing organization that tests air bag safety. this is under way. we expect to get results. we will share the results. we will collaborate. we always try to get ahead of this and just do the right thing. >> thank you. >> gentleman's time has expired. chair now recognizes the the chairman from texas. recognized for your five minutes. >> well, thank you mr. chairman. you know. here we go again. i wasn't here for the opening statements, but it seems like every few years we have a hearing with some automobile manufacturer that they've had some sort of a defective part, and they treated it as more of a manufacturing quality control

issue and not as a serious safety issue. it's ironic in that case that the part is something that is supposed to protect the driver or the passenger, and it turned out that the air bag or deflater or something in the air bag was defective. you know, it's none of us, i mean, we have some people that are technically trained on the committee. but we're not automotive engineers or safety experts. so, you know, we ask questions of you folks, and then later on in nhtsa, and then we cross our fingers. you know, i'm just i'm just puzzled and disappointed that here we go again. so my most serious questions will be reserved for the nhtsa

witness in the second panel, but i would ask mr. shimizu, and i may not be pronouncing your name correctly. in the short tem the the old saying is don't dig the the hole any deeper. i'm told by my friends at general motors that there's a shortage of repair kits to do the replacements, and there are a couple of gm products used in the takata air bags. how soon will you have enough good kits available so we can go ahead and do the recalls for the cars we've already recalled? >> congressman, regarding the capacity of the replacement kits, we are now staffed to 350,000, and this will increase to 450,000 in january by adding two more lines.

and we continue to work on discussing with auto makers to increasing capacity. and as mr. schostek mentioned, we also are taking the option to evaluate if it's visible. so we'll take every action necessary to support, to speed up the replacement of the -- >> now, i'm just an old engineer, but there are about 7 million cars, i think, that all in all have been recalled. at 450,000 a month, that's a year and a half or longer. do you think that's acceptable? >> it's not speeding up. that's why we are discussing in our capacity of the productions, but it takes a month to be ready

for that. so we do everything we can do at this moment. >> well, what does the driver do with the vehicle that's in a recall that is not going to be repaired for another year and a half or two years? owe just disconnect the the air bag? just hope you don't have an accident? >> no, that's impossible. i understand the situation. that's why -- i'm not trying to be rude about it. >> we, of course, actually, the data shows that it's still -- in that case that we can supply to fit the the demand of our customers at this moment, if we focus on that priority, or if we do taking a phase, by adding capacity, we can catch up the

supply to the demand. >> my time is about to expire. are there other manufacturers that manufacture an equivalent irbag product that you could institute for your air bag and repair these cars that have already been recalled? or is that just not technically an engineering wise feasible b? >> it's required some tests. >> i would suggest that you look at that. because the sooner the cars that have already been identified are repaired, the better off you're going to be, in my opinion. with that, mr. chairman, i yield back. >> thank you very much. the chair recognizes the gentleman from kentucky. >> thank you, mr. chairman. and thank the witnesses for their testimonies today. i wish i could say i felt better about this situation now than i did when i walked into the room, but i think i feel a little bit more uncertain than i wish i

did. i have a little bit of a personal his we with this issue. i was a young senate staffer on the congress committee in the early '07s when ralph nader came to the congress and urged the mandatory air bag legislation and so i know we've been putting air bags in cars for a long time. i would like to hear from all the manufacturers how long you've been putting air bags in your vehicles. >> congressman, since the '90s, i'm pretty sure. the early '90s. >> i'm not so sure. i think it was the late '80s. could have been early '90s. >> same thing. and i know there have been instances involving spontaneous deployment of air bags and so forth but correct me if i'm wrong. the issue that we're dealing with today, these inflater

ruptures did not happen before ten years. are you aware of any incidents of inflater ruptures that occurred before the turn of the century? >> no. >> all right. and i assume that there was no relevance of humidity in any of the prior instances of now function of air bags prior to the turn of the century, essentially this ten-year period. so i'm getting at this issue of the root cause. and what possibly changed, other than change of propellant that you use from before this time peert when you changed propellants, is there anything else that changed in the technology that you could reasonably identify as a potential cause of this inflater rupture prior to this period?

>> we understand the character of the models we use. and it's controlled during the operation, and we do it and unfortunately we've had some issues in the past. the moisture control. but it's -- we believe that the it is managed the environmental come prex. >> but what i'm getting at is, i think we pretty much excluded any other potential root cause, other than the propellant being used. nothing else changed in technology. none of these happened before the change in propellant. so regardless of whether it's humidity related, temperature related, or -- the propellant seems to be the only variable that could be responsible for these malfunctions. is that correct, or not? nothing else changed and we

never saw it before you changed propellants. wouldn't you say it's reasonable to assume that the pro pel lant is the root cause? congressman, this has happened eerd able normal typical reaction, or weakness of the body. so either -- also now, but also the fact that we can consider is the body side. but at this moment, according to our investigation, we don't see any abnormality in the body side. >> okay. going a little bit further and this is expanding on his question, you filed a 573 safety recall report just a month or so ago involving a defect in the

irbags produced in mexico, is that correct? >> yes. the air bag was produced in mexico. >> right. so you're actually still producing air bags that have defects in them. and i don't know what the nature of that defect was, but again it goes to the question of, and i know we don't have too much time. it goes to the question of whether we can be confident that even the replacements that are being provided are safe, and i guess any of the manufacturing representatives who are here might want to respond. how can you be confident that the the replacementment parts you're putting in or the air bags you're putting in today are safe if you're still buying them from takata. >> that specific issue is happened in mexico many years ago.

and that's already crossed and moved to mexico. and as i said, it's all done from previous issues. it was greased, we had problems and taken care of. so the correction production is capable to produce the parts and i'm very confident that it's there. >> i would like to submit, mr. chairman, that question. and have the manufacturers respond to the committee as to how we can be confident that the equipment that they're using today is safe. thank you very much. >> absolutely. >> i yield back. >> the chair recognizes the the vice chair of the sub committee, yes man from new jersey, mr. lance. >> thank you, mr. chairman. are toyotas on the road in the united states today safe regarding the air bag issue? >> sir, every time there's a

safety recall -- >> yes. >> and the vehicle has yet to be repaired -- >> yes. >> there's always the risk. in the case of people residing in the area of high himdty, we are urging our customers to please follow the strexs of the letters that we have sent to them, and as long as they do that, they can operate the vehicle safely. >> and if that is done, there are enough air bags available so that that can be accomplished immediately? >> takata has indicated they have significantly increased the production, starting from this month. and i think we have a good amount of inflaters. >> thank you. mr. westbrook, the same question to you regarding bmws. >> would you repeat, please? >> yes, are bmws safe for the driving public in the united states of america today? >> we believe they are. we have no knowledge of any inflater rupture to this date on

any bmw, on any air bag, on any side of the car. >> same question to you, mr. schostek, regarding hondas. >> yes, mr. chairman. there are recalls in effect for honda vehicles from the past. we are urging those customers to get those vehicles fixed. if there's not a recall, then we do believe those customers are safe. i do want to address the situation -- >> and there are enough air bags so for those that are being recalled the problem can be fixed immediate will? >> that's where i was going, yes. we have seen the supply of replacement parts is adequate to match the demand. we appreciate the attention on this issue. it's actually causing more customers to come forward and to get their vehicles repaired. these are usually older vehicles. and getting a high complete rate on recalls is difficult. >> and you're confident that the recalls you have suggested are inclusive of all of the

problems? >> yes, sir. >> and there's not likely to be furl recalls upon us? >> there is a safety information campaign where takata has not yet identified the defect or cause of that. we are going to expand that to a national campaign, as we talked about this morning. and there may be, sir, a time when replacement parts become a little short. and that's why we're working with not only takata, but two other manufactures, auto league and disel. and we believe based on recent discussions with those companies there are good pros protects to reduce the shortage. there's not a shortage right now, sir. we expect there may be a shortage in the foreseeable future. but we're trying to reduce -- >> thank you. mr. shimizu. i have in front of me the letter takata sent in response to the request of the government. letter is dated yesterday.

it is from mike, the director of product safety. does he work for you? >> yes. >> and he's director of product safety in this country or throughout the entire system? >> it's mainly focused on this country. >> this country. thank you. i find the response, argumentative and not particularly helpful. for example, takata complains that you have only had two working days to respond giving the intervening thanksgiving holiday. how long has takata known about the problem. certainly more than two working day days. >> could you repeat the question again? >> i find the the response, and we'll be asking about this later because this is our next witness. i find the the letter very unhelpful and extremely

contentious. it does not support a nationwide determination of a sifty wide defect in all vehicles equipped with the the driver side inflateers. that's not the view of the agency and government that protectses the american people. you are in opposition, is that accurate? >> can i ask the question? >> certainly. >> congressman, sorry it take so

long. >> certainly, you have every right to confirm. yes, that's correct. that is. >> thank you, and in conclusion, and we'll be asking this of nhtsa later in the hearing. on november 26th, nhtsa demandeded a national recall of driver's side with a deadline of december 2nd. you have responded in the negative. if the company fails to act, nhtsa will continue to statutorily require process needed to force takata to act. and certainly my line of questioning this afternoon will be related to that. i think that we have to work more closely together to make sure that the american people are safe. thank you, mr. chairman. >> thank you, and the chair recognizes the gentleman from mississippi for mooif fnts. >> thank you, mr. chairman. thank you for being here today. mr. shimizu, you know, this is a matter of safety and concern for

for everyone as a driver and families, children, those that might be impacted can i ask you, the the pro pel lant that you use that's the amoan yum nitrate propellant you use now, when was the decision made to -- and when did you stop using tetrizol and move to the ammonium nitrate propellant? >> i'm not sure, congressman exactly which year, but i believe it was 2003 or -- let me confirm. >> it's been at least more than ten years ago. correct? >> yes. >> and maybe late 1990s. early 2000? what is the cost difference between the propellant in

tetrizol versus what you use now? how much does that affect the price of an air bag? >> i believe to to my knock, there's not much difference. but i don't know the actual cost. >> but isn't tetrizol much more expensive? why was the decision made to switch from one to the the other if but for cost? >> the reason to change is not the cost. it's because of the -- there are many other reasons why we do that. >> what is the propellant for the replacement air bags that you're manufacturing as we speak. >> excuse me? >> what propellant is used on the replacement air bags? the ones that you're manufacturing now? >> the same that we use before.

>> do you foresee changing the propellant of those approximately 50,000 per month. we have to get the materials to replace the parts for the vehicle. it's a characteristic and a difference. so we have to go through the first tests. that's the main reason we continue to use the the same, and of course, that comes for the the current production line. and one more thing, if i can, is we have -- also, and is a type of motors, and we continue to work on improving the program. >> do you believe that the cause of the ruptures or the early deployment of these air bags or the ineffectiveness of it, is that due to the propellant, or do you believe that it's some

other cause? >> my understanding is this cause of the problem is because of the manufacturing process, and the humidity control. >> i certainly want to, i would like to ask some questions, if i may, from toyota on the approach that you have. how many toyota vehiclesed by t? >> approximately, 878,000. >> and it's my understanding that toyota was the first to initiate a nationwide recall, is that correct? >> our nationwide recall has been in effect since april of 2013. >> just as a matter of convenience, are you providing loaner vehicles to the customers that come? >> yes. if that's what they desire, yes. >> mr. westbrook, is that

something that bmw is doing, yes? >> and honda. >> yes. right now the the parts are in adequate supply. we provide that to them at no charge. >> if i may ask, you mentioned earlier, and you said there are not never driver side air bag issues for toyota. why is that? >> the problematic inflaters that takata has identified, they're not installed in the u.s. >> different supplier for the driver side air bag? >> yes. >> what prompted you, mr. saadat to start supplying inflaters to takata for testing? >> there was a preliminary evaluation that was opened by nhtsa in june of this year, and requested all automakers to send parts that they have collected. >> okay. >> and send them to takata for testing. >> what about independent

testing? what are we doing there? >> in terms of independent testing, we have retained the service on an independent engineering firm to be able to help us and give us more assurances on the root cause of this issue. >> mr. westbrook, any independent testing that bmw is engaging in yet? >> we are under contract to begin engaging in that. we are beginning to collect the air bags under this regional campaign and we'll start that shortly and make those results available. >> thank you very much. my time has expired. i yield back. >> chairman recognizes the gentleman from missouri, mr. long, for five minutes. >> thank you, mr. chairman. mr. shimizu, how many people would need to die before you would be willing to do a nationwide recall?

>> five people died from the incident. >> that's what have died now. my question is how many more would need to die before you do what nhtsa recommends, which is a nationwide recall? >> i don't think -- >> do you have a test? >> again, it's -- we are still doing additional recalls for e researching purpose and we haven't identified the root of the cause of the problem yet. but it's a chance to have -- it's minimal according to the data that we have. >> it's my understanding when the air bag explodes, it's metal projectiles, shrapnel so to speak, that has cut veins and led to some of these deaths, is that correct?

>> once it happens, yes. >> so it's sort of driving down the highway with possibly a shotgun aimed at you behind the steering wheel or behind the glove box, i guess, and not knowing which air bag isguess, not knowing which air bag is going to explode and act as a shotgun would such as shrapnel. >> congressman, it's -- air bag deployed and saved the people's lives and also saved people from serious injury from the accident. yes, we have some issues. we have addressed that. as we did in the past, so we conscious of it. it is products we're make right now today. it's safe and also -- we have some concerns which is high temperature, high muhammad. that high humidity which is why we

investigate. >> you're confident the ones you're making now are safe but we all know the ones on the road now, there's a possibility they are not safe, correct? that would be covered with a nationwide recall. >> let me confirm. >> sure. >> mr. congressman, for the -- outside regional recall, all data we have does not support such risk at this moment. so we're conscious it's safe. >> i don't know that i understood the answer. my question is, the once that

are manufactured today you are confident are safe, but the ones out there on the road are recalled because you're not able to do a nationwide recall, those are not safe, perhaps, correct? >> we're confident it's safe. >> you think they are safe? >> pardon? >> you think they are safe? >> yes. >> and you're confident from the testimony i've heard today, i'm given to understand that you think it is a humidity and a heat -- function of heat and humidity. is that a one-time situation or is it a compound situation? let me give you an example. if i live in cheyenne, wyoming, low humidity, and i want to go to a wedding in jacksonville, florida, in my honda that has a takata air bag, should i make that trip? i'm only going to be down there

a few days with the heat and humidity, would that be a safe trip to take or not? >> congressman, it's a compound situation, which is -- products have to be extensive period of time and under high temperature, high humidity. >> so, if i was going to move from cheyenne, wyoming, and take a job in jacksonville, florida, you recommend i'd get my air bag replaced, correct? if i was going to live this year-round and there was going to be heat and humidity year-round, you'd recommend i get the air bag replaced? >> there are many -- >> i wanted to keep my family safe. >> i confident it's safe but we still didn't identify the cause yet, so that's why we continue to test, so it's hard to answer the question. >> let me ask the gentleman from

honda. same question to you. i live in cheyenne, wyoming, i want to go to jacksonville, florida, take the family down there for a wedding. are you confident i'm safe in a honda to do that or is it a cop pound effect on the heat and humidity? should people not travel in high heat and humidity areas with takata air bags for short trips? >> we've had a lot of recalls -- >> that's not my question. i think that's what takata should do is a national recall. i appreciate that honda's done that. my question is, if someone was going to make a trip and had not done the recall progress. >> the phenomenon of rate of ruptures are in vehicles that are older vehicles, 8, 10, 12 -- >> older cars? >> yeah. and i think the discussion about heat and humidity, the theory

about that is it's over a prolonged period of time that heat and humidity cycle potentially affecting the propellant. >> what's the newest car someone was deceased in, a honda? what's latest on year model. >> sir, i believe it was a 2004, but i'd have to check. >> what year did that tragedy occur? >> the most recent one occurred this yeeshgs sir, but in a 2004 model. you know, there's been four fatalities in honda vehicles. >> i thought five. >> four in the u.s., one in malaysia. all were subject to that national recall -- >> no, i appreciate honda doing that. i just wichita kata would do that. >> gentlemen, your time --

>> i yield back. >> gentlemen from illinois is up next. >> we're going to miss you. a great friend. congratulations on the work you've done on this committee. thank you for being out here. just a couple of quick questions. i may not take all my five minutes. we'll make up for billy long there. sorry, billy. to the three of you, do you believe there's current data available for the national recall of all takata driver's side air bags? >> no. >> i'm sorry -- >> we'll just ask down the line for you guys. go ahead. >> in reference to driver's side, as we stated, i don't have any of those problematic inflaters in our driver's side. >> okay. so, you haven't seen that. >> as we informed the committee today, we are taking the action to expand our safety improvement campaign for driver's side

recalls from region ale to national. we want to get more information to help others in the industry as well as takata and ourselves to understand what the -- what the effect is, if there's a defect, and to determine the cause. i think it's important to understand from the customer's viewpoint, congressman, that we -- you know, we use these words safety improvement campaign sxrl, and i know it can be confusing to customers. and we're certainly sympathetic and empathetic to that. the notice that arrives in the customer's mailbox, one or the other, says your vehicle is subject to recall, so please bring it in. we've focused ourselves, our attention on, okay, what's happening in the field? what's happening with our customers? how do they understand what's going on here? and we're really trying to redouble our efforts to make sure they understand we want them to bring that vehicle in so that we can replace the inflater. and then we need to do testing. takata needs to do testing.

we as oems need to do testing and a third-heater engineering firm needs to do testing. we're all engineering companies here. we want to find the answer to this. in the meantime i think our focus has to be, what can we do for our customers? >> i got you. i appreciate it. there's been a discussion about regional recalls from high humidity states to other states outside those regions. i believe an area that needs focus by automakers is the commerce of recycled original equipment manufacturer parts. each day over a half million oem parts, same parts designed by your companies to meet your fit, finish and durability standards are sold by professional automotive recyclers. they play an important part and are readily sold from one state or region of the country to another. recently gm reached out to professional automotive recyclers offering to buy back or purchase recalled gm ignition

switches. to accomplish this, gm provided specific oem part numbers for ignition switches so they could identify the specific recalled parts in their company's inventories. to those representing the car companies, do you agree sharing oem part numbers and other identifiable information with the professional automotive recycling industry would increase safety? yeah, so we'll start with that. >> congressman, i myself am not familiar with the gm action. i would bring up another point. counterfeit air bags are a problem in this country as well. we've been working hard state by state to try to stop the use of counterfeit air bags. that's a big danger to consumers. it's a big danger to our consumers. but on the recycler, sir, i would like to get back to you. >> we have a process called

automated parts return and any part, like air bag s subject to that process. if a company like a recycler wants our mirror caps, they can have them. >> sir, i'm an engineer and i can't really comment on legislative issues but i'll be happy to provide response to you later. >> and would sharing that information, would that help you -- would that assist your companies in tracking recalled parts? >> sharing what information, please? >> the oem parts numbers with recyclers. >> i can't say that. >> do honda, toyota and bmw currently have a similar buy back program in place with professional recyclers? you might have addressed that. >> i'm not aware of that. i'd be happy to get back to you. >> mr. chairman, i yield back ten seconds. >> thank you. now the chair recognizes the gentleman from florida for five

minutes. >> thank you, mr. chairman. i appreciate all your work on this committee and congress as a whole. we are going to miss you. this is a fund mental issue of safety and america must be able to trust the cars they drive are safe. i'm sure you'll agree with that. instead, millions of americans have been driving cars with potentially deadly air bags. i represent the area i represent has increased risk because of this defect has been generally been in parts of the country with high humidity and it's been stated. florida has many residents that are transient. i know you know that, too. mr. sadat, mr. schoski, what steps are you taking to correctly identify customers whose customers have been in high humidity areas for prolonged periods? how are you contacting them? we'll start with mr. sadat.

>> first of all, in terms of region, what we have is we basically look at the latest registration, number one. we're also snowbirds, you know, if a vehicle is transferred and brought to the region and if there's -- in general, if there's a regional recall, we contact our customers outside of a region who had their vehicles in the region or vice versa, so that's -- >> what about if somebody buys a used car, how do you address that? >> we look at the latest registration. based on that, we'll get the information, we'll contact them. >> okay. mr. schostska. >> thank you for asking that question. florida has been the site of 17 of the incidents that involve honda vehicles, by far the most

of any state and by far our biggest concern. in fact, there was an article, i think, in late september in one of the newspapers that inaccurately reported that honda was asking dealers not to contact customers. they were misconstruing a message we sent to our dealers. what happened at the very same time, sir, in the state of florida we began 93,000 calls, sent out 125,000 e-mails and sent out 76,000 postcards. we believe the risk is highest in your state and we are putting extra effort into locating customers in your state. and having some success with that, sir. >> okay. next i'd like to hear from mr. westbrook. >> we have maybe half of it covered. we have a way to track the car that was bought in florida because it will be subject to the recall and that's linked to the v.i.n. by our database. i don't have a way to track a

car that were maybe bought in michigan and spent the other half of the year in florida, but i would like to get back on that. >> well, please, work on that and i'd like to hear from you. >> i will. >> again, for the entire panel, would you let a family member drive a car with a takata air bag? i'd like for you to answer that. would you let a family member drive a car with a takata air bag? >> if the car was subject to recall, i would encourage that family member to get it in as soon as possible and get it fixed. if the car is not subject to a recall, yes, i would drive a car with a takata air bag. >> i'd like to hear from the entire panel. >> yes, i do. i would drive the car with our air bag. >> mr. westbrook. >> i would drive a bmw with the passenger recall in place. >> if a family member lives in the higher risk area, i urge them to take the vehicle and -- actually, first of all, follow

the instructions, the letters we sent to them, and they can operate it safely. take the vehicle, we'll try to take care of them. >> would you let them drive it after they went through that? would you let them drive the -- in other words, would you allow them to drive it or would you prefer they drive it? >> after the remedy is done, based on the information that takata has indicated, you know, that they have addressed the root cause, yes. >> and you would trust takata? >> as i said before, we have retained the service of an independent engineering firm to give us more assurances, sir. >> all right. next question, i know i don't have much time. mr. shimizo, takata has known there were potential issues with its air bags-a as far back as 2004. a decade has passed by. a full decade. why hasn't your company been able to fix this

life-threatening defect since then? >> congressman, every time we recognize an incident or issue, we immediately jump onto the problems and try to find root cause of the issues. as soon as we identify the root cause, we took care of that. we address the issues, we take care of the problems. >> yeah, but, sir, i mean, it's been a full decade. ten years. >> it's a series of -- >> i don't think there's any excuse for not solving the problem. >> every time we found problem, we immediately take action. however, it's true that we have series of recalls and the different timing and we have some different cause of the problems, so it's not same problems all times. >>. >> gentleman from west virginia is recognized for five minutes. >> thank you, mr. chairman. let me try to focus on the recall notices because we're not

going to have success with this unless people bring their cars in and get this thing taken care of. we also know that traditionally 30% to 40% of people ignore the recall notice. and if you think back a little bit about when mosses came down from the mountain, he came down with ten command ants. he didn't come down with ten good ideas. so, i'm concerned about how much of an emphasis is in that notice that you better get your car back in? because i've got two notices on my car. i have a chevy cruise. i haven't done anything with it yet because i don't know if it's a life-threatening situation and i've ignored it. i know 30% to 40% of people ignore it. how effective was the notice that you are giving that this car could provide as, mr. long said, a shotgun blasting at you?

i'm just curious, what is -- what's the content of your notice? is it just a good idea to bring it in or if you don't bring it in, we're going to come after it? >> let me answer first. we have resent the implemented authorization program. one in particular is contacting each customer by phone, e-mails and follow-up mails to urge them to bring their vehicles in. if they don't feel safe, we ask them -- we'll tow the vehicles to to the dealership. that's the second part. we improve our website -- >> could you share with us a notice that you put out? you're doing the telephone call with it? i don't know what -- we've got 10, 12 manufacturers using these. i'm just curious, cue send our

office just a typical notice that when you put out a recall -- >> congressman -- >> i'm just curious to see what value is it? do you really -- do you scare them? is this a commandment or just a good idea. >> you're hitting on a good idea. we're talking about older vehicles. we'll send you both the notice we send with regard to a recall and the notice we send with regard to a safety improvement campaign. i've looked at both of them. the letter is pretty strong. the request is pretty strong. >> if you would just send that to me, i'd appreciate it. let me go to another step with this recall notice. carfax apparently doesn't tell you where your car is. so, if i'm going to buy a used car, i don't know -- maybe you can inform me or educate me, but i don't know -- west virginia.

am i going to get a notice that there's a recall? >> if the car is recalled, sir, we are checking -- >> it's a yes or no. >> vehicle identification numbers -- >> it's not a yes or no. >> yes, you should. >> if i -- >> if a car has been registered in -- >> it will go by the v.i.n. number, you know that car -- because -- let's just say i bought a car in west virginia and it's registered in west virginia but i take it to florida and use it in florida for 12 years and bring it back to west virginia or however. >> right. >> what's the -- who knows where that car really is? >> that's a very good question. and, obviously, we can't sit here and provide you with 100% assurance that we were able to track a car. we do have -- we do check registration information in the various states, so we do know it that way, but it's an area we need to work harder at, sir.

>> that's honda. what about bmw and toyota. what are you all doing? i'm curious from a pure mechanical standpoint, how are we checking this? >> this is similar answer that i gave to congressman billy from florida. i think we have it in the car going the one way. in other words, if the car is registered in florida and we have a campaign in florida, it's going to be a cross-link to that vehicle identification number. the other way around is more difficult to figure out and as committed earlier, we'll try to get to the bottom of that. >> okay. let me ask the final question with this is, if i'm -- if i have a concern about my car and i've not received a recall notice and i take it to a dealer can and i say, i'm just uncomfortable. i see across the nation, there have been deaths reported. i would like to have my air bag replac replaced. what does the dealer do? he says, sure.

i'll take care of it next week or does he say, you don't fit the profile. if he says no, where's the limit then? >> congressman, we've instructed our dealers that we want our customers to be taken care of and want them to feel comfortable. if they are concerned about their car, we have loner cars available, rental cars available if a part isn't available. and just this week, congressman, i requested our service division to contact each and every dealer we have in the united states. we have 1300 -- more than 1300 honda and acura dealers to contact them individually and ensure that the treatment the customers are receiving and the respect that the customer is receiving with regard to these inflater issues is up to our expectations. we expect our dealers to accommodate our customers -- >> even if they're not -- even if they've -- >> their individual needs.

>> at no cost to the owner. >> at no cost to the owner. >> the chair recognizes the gentleman from ohio for five minutes. >> thank you, mr. chairman. i would like to also add my -- my thoughts to you as you make this transition. it's been great serving with you on this committee. i wish you the absolute best. >> mr. shimizu, i want to get into the manufacturing. i came prior to coming to congress, i worked for an automotive supplier. we made electronic components. some of the plants were located near where some of your plants are located. we understand there are five inflater types that have been subjected to these recalls. in terms of producing replacement kits for those that

have to be replaced, can takata simultaneously produce new inflaters for each type as well as replacement kits for each type simultaneously? >> congressman, most of the case, each inflater has their own exclusive line, so the answer is, yes, we can do it. >> you can do replacements and new, okay. along these same lines, are passenger and driver air bag inflaters produced on the same or different lines? >> passenger inflater and driver inflater we produce different but same plant. >> same plant but different line? >> yes. >> does an increase in the production of replacement part,

driver's side replacement parts, affect your ability to produce passenger air bag inflaters? >> cue repeat your question again? >> does an increase in the production of driver's side air bags, does that affect your ability to produce passenger air bags? since they're separate lines, i think the answer to that is no, correct? >> correct. >> for our folks at honda -- what analysis -- i saw the press release about the analysis you're going to be doing. if i've got it right here, honda today called for coordinated independent -- goal of ensuring all that are accurately identified and fixed as quickly as possible.

what analysis did honda undergo, if any, and was it independent? have you done any independent analysis to date to determine if a recall of the air bags are necessary -- or the inflaters, rather? >> thank you, congressman. i think we need to separate the recall decision versus testing. so, the recall decision we make is based on information we receive, for example, from takata with regard to manufacturing defects, they told us what those manufacturing defects were. we did not simply blindly accept their analysis but our engineers looked at it and thought, is it reasonable? based on that, we have effected recalls over time. with regard to the current problem, which is trying to understand the cause of the --

is there a defect and what could be the contributing cause, for example, heat, humidity, we began independent testing recently but we were appreciative others in the auto industry, especially with toyota's leadership, we were able to announce yesterday many of us are coming together and sharing testing. we still have high expectations of takata to continue their testing but i can speak for hon dashgs i can't speak for the other oems, but i can speak for honda. we feel a need to validate that and see what else we can come up with using an independent third-party engineering flirm. >> just real quick. we know at least some of the data has indicated that humidity, temperature, climate has had an effect on these inflaters. are you folks doing testing on virtually every climate scenario in america, the different regions of the country? because, you know -- and

seasonal? because it changes from season to season and region to region of our country. so, are you looking at things other than humidity, like dryness, you know, whatever? >> a very good question. and the answer -- i can't go as far as to say every climatetic condition in the country because that would be going too far, i think. but we are testing from the humidity areas and other areas of the country. the purpose of a good testing is to have different samples to look at. that's what we're doing. >> mr. chairman, i'm prepared to yield back but let me just make this statement. again, coming from an automotive supplier myself, and i appreciate your candor, but i think it's a little bit short-sighted to say we can't test for all the different climate conditions in the country. if we already know these inflaters are affected by humidity, for god's sakes, we don't know what other climate conditions affect the inflaters

as well. i think we need to get to the bottom of that as well. with that, mr. chairman, i yield back. >> does the gentleman from texas, mr. burgess, have any questions? >> i am anxious to hear from our next witness. >> thank you. there has been a request from the full committee chair, therefore, by my set of rules, he is -- >> just to pose another question. you know, there's been a number of different articles that have been written over the last number of weeks regarding secret tests and i will give you this for the record. this is a cnbc story. and it reads early, the japanese manufacturer takata secretly conducted tests on 50 air bags that it retrieved from scrap yards according to two former

employees, one of whom was senior member of its testing lab. results were so startling that engineers began starting possible fixes in preparation for a recall but instead of alerting federal safety regulators to possible danger, takata executive discounted the risk and allowed them to delete the testing data from their computers and dispose of the inflater air bag in the trash. "usa today," other publications have reported similar stories. chris martin from honda said in a statement, this is a serious allegation about actions taken by takata. it is our intention to determine whether anyone at honda has any evidence that these claims are credible, so i'm anxious just to get a quick response.

but more disturbing, of course, is the takata spokesperson declined to comment on the disclosure of the testing. so, if i could just hear from takata and honda briefly, if you'd like to respond in writing, you can, but i'm -- i'm truly troubled by these stories, which is what helped lead us to this hearing today. and we'll be asking similar questions of nhtsa, who follows you now. i ask for the indulgence of the committee to get a response and -- >> congressman, you mentioned mr. march tirngs honda representative quoted in there. we are continuing to look and to see if we have any reason to add any credibility to that. up to this point, sir, as i sit here, i cannot add any credibility to that. we will continue to look and -- but i don't know of any honda awareness of that testing in 2004. >> and this story indicates the testing was done in auburn

hills, that's in michigan. of course, this was about the time that we were doing the tread act, which was a pretty big story in michigan. >> congressman, my response to your question is, first, we don't conduct any secret tests during 2004, however according to our record, we conducted a series of tests in 2004 because of cushion issues. we have some cushion tears issues that happened and actually nhtsa, one is founded during their test. and then nhtsa informed to automakers and then request us to do a series of tests with limited time. we asked series of test because of cushion tears, not inflarts. we don't use any inflater from junkyard either. so i think that is -- as a fact is, we did conduct a series of

tests because of cushion issues. actually, nhtsa knows about it because we got the notice from nhtsa. after we finished the test we found the root cause, which is the operation between press cover and cushions that create -- weaken the cushion and cause cushion tears, which was reported back to automakers and nhtsa and automaker end up to do the actual recall later in 2004. >> when was it reported to nhtsa? >> i believe it's during 2004. it's from automakers because they have to do the recall. and i believe november 2004. >> if you could confirm that in writing before the end of the week, we'd certainly appreciate it. >> yes. we can get back to the subcommittee by the end of this -- by the end of this, yes.

>> yield back. >> thank you, mr. chairman. now the ranking member has one additional question as well. >> mr. schostek, another news report from november in the "new york times" that reported after 2004 air bag rupture in a honda vehicle, your company reached a nonpublic settlement agreement with the injured party and also reported that you reached nonpublic settlement agreements after three air bag ruptures in 2007. so i'm just wondering how many settlements like that there are and if you yourself feels required- the company itself feels required to inform nhtsa or the public about these nonpublic settlements. >> thank you for the question. there certainly are settlements

in lawsuits. that's not unusual in our legal system. with regard to these air bag inflaters, we have made nhtsa aware of every inflater rupture that occurred in a honda vehicle. we don't understand -- the confidentiality of legal settlements is part of our system here but that's not to us a reason to -- that's going to cover up any safety information. we are providing the safety information regarding inflaters to nhtsa. >> in all of these particular cases, you did also give nhtsa the information? >> we provided nhtsa information about all inflater ruptures, yes, congresswoman. >> 2004, 2007? >> so, let me just be clear because there's two ways. we have been sharing with nhtsa all information about inflaters. we have fallen short on our tread obligations. there were eight of them.

eight out of the 1700 related to takata air bag -- 8 out of the 1700 related to takata air bag inflater ruptures. did we report those on our tread report? the answer is, no. nhtsa had that information based on our other communications with them. so in our view it did not hinder to continue to investigate as we have since 2007 these takata air bag inflater ruptures. >> so, these legal settlements have nothing to do, you're saying, with the actual reporting of the problem for which the lawsuit arose. >> congresswoman, what i'm saying is we have shared information about takata inflater ruptures with nhtsa. >> okay. thank you. i yield back. >> thank you. that does conclude the questions for our first panel as discussed

throughout, there was mentions of written questions, qfrs. we want to let the panel know it is likely you will have questions, written questions submitted to you. we will do our best to get those to you in a timely manner, which always means a couple of weeks. if you could likewise answer them within a couple of weeks, we would greatly appreciate them and get them back to us. this panel, thank you for your contribution and helping us better understand. obviously, this committee is dedicated to making sure the people drivering vehicles are as safe as they can possibly be. i think you share that as well. so, appreciate your time here today. you are dismissed.

>> we'll give it one or two minutes before we recognize you, mr. freeman.

staff all set up? everything good to go over there? i think it looks like we're set. acting administrator, mr. friedman, i appreciate you being here. i hope you enjoyed the last few hours -- a couple hours of their testimony. and now you are recognized for

your five minutes. and welcome. >> thank you, mr. chairman. >> microphone on? >> thank you. >> thank you, mr. chairman, ranking member and members of the subcommittee. thank you for allowing me to testimony about the issues in takata air bags. over 10 million vehicles across 10 automakers have been recalled because of inflaters that can rupture when air bags deploy. more than half of these are part of older recalls associated with known manufacturing problems and four related deaths that have occurred in the united states. excuse me. i apologize. many of these vehicles have already been repaired, but many

have not. that is why nhtsa alerted consumers in this year to bring their vehicles in for repairs. recalls are serious safety issues and vehicle recall completion rates remain far too low. i encourage all owners to go to safercar.gov/vinlookup to see if their cars need to be repaired under these or any recalls. under nhtsa's efforts to alert consumers, industry must step up. automakers must do a better job to aggressively reach out to consumers to get their vehicles repaired and they must report all information required under the tread act. dealers have to check v.i.n. numbers for open recalls every time a vehicle is brought in for service. as the administration proposes in the grow america act, rental car companies and used car dealers should never be allowed to rent or sell vehicles without fixing them first. congress can also provide help

to states to implement programs directly linking vehicle registration to the repair of open recalls. now, i want to address the latest air bag recalls. nhtsa moved to open an investigation based on three consumer complaints about air bags from three different manufacturers. we connected the dots. takata was the common supplier and all were from florida and puerto rico. we reached out to takata and the manufacturers, discovered three additional ruptures and that air bags with these or similar inflaters are used by several more manufacturers. initial data suggested the defects in driver's and passenger air bags were related to long exposure to high heat and humidity so nhtsa acted quickly. within days of opening an investigation, obtained recalls in areas of demonstrated risk from manufacturers with the same or similar inflaters.

automakers responded to our recall and declared defects on a handful of incidents and, thankfully, no reported deaths. our policy is clear. vehicle recalls are nationwide and have -- and we have denied and will continue to deny requests for regional recalls unless the manufacturer provides solid information indicating that the risk is regionally limited. the data we had at the time on the regional nature of the problem was compelling and we wanted the manufacturers to quickly recall the vehicles of those that demonstrated risks. but that was far from the end of our efforts. we are actively looking into other claims of injury or death to determine if they could be related. while we continue those efforts, we refuse to wait until someone else got hurt. we had takata begin testing air bags from vehicles across the country. the tests so far have provided data supportive of the regional recall approach for passenger side air bags, as you can see in

this chart. but when we quickly connected a more recent driver's side injury in north carolina to one in california, as you can see in this chart, and others that did happen in florida, we acted. i called on takata and the vehicle manufacturers with driver's side air bags with the same or similar inflaters to expand the driver's side recall nation wide. mr. chairman, it's time again for industry to step up and put safety first. what we learned last night takata has refused to issue a nationwide notice of a defect in these driver's side air bags. until they and automakers act, effected drivers won't be protected. we are now engaged in a detail review of takatas response and demand and will follow up with all appropriate steps to ensure takata and automakers protect the driving public nationwide. takata must also increase their testing to provide us with more

data to determine the full nature of the defects. i was encouraged by honda, ford's -- make these remedies available to vehicle owners, including working with other air bag suppliers. finally, if our continued investigation or added testing show the passenger side air bag defects are not limited to regions of high heat and humidity, we will act quickly. until then, we want to ensure that the limited supply of passenger side replacement parts are made available to those that demonstrated risks. mr. chairman, each day more than 90 americans lose their lives due to drunk driving, not wearing a seat belt and fataliti

fatalities. each other, more than 200 americans are injured in traffic acciden accidents. these are tragic reminders of the importance of our efforts and how we must build on our many successes and continue to work hard and even harder to protect the american public. the case of dweblgttive air bags is no different. let me be clear to you. we will continue our aggressive efforts to protect americans from defective takata air bags. we have acted swiftly and based on the evidence and we will continue to do so. if we find any evidence of wrongdoing, those responsible will be held accountable. thank you. >> thank you for your testimony. now, i'll recognize myself for five minutes to start the questions. so, bluntly, does nhtsa believe that humidity is the problem? >> it is clear humidity is one of the factors and is clearly a major factor when it comes to passenger side air bags. when it comes to driver's side air bags, we have to follow the

evidence. the evidence is clear that the problem is not limited to areas of very high, absolute humidity. >> all right. so, takata believes that a national recall of driver's side air bags is unnecessary. can you explain with some level of specificity -- specifics why nhtsa now disagrees, especially in light of the fact that nhtsa had initially called for a regional action? >> mr. chairman, first of all, i was deeply disappointed by takatas response and failure to take responsibility for the defects their products -- for the defects in their products. the fundamental explanation is, we have followed the data. initially, all of the incidents that occurred in the real world with passenger and driver's side air bags all occurred exclusively in florida and puerto rico. when we expanded the testing and pushed takata to do the tetsing,

the same held true for the testing of all passenger side air bags as can you see in this chart over here. however, when we saw real world incidents on the driver's side, one california, we pushed honda to make sure their recall covered that region. then very recently, we became aware of a driver's side incident in north carolina. with six total incidents, two of which are outside that region, we can no longer support a regional recall. our policy is clear. recalls must be nationwide unless the manufacturers can demonstrate that they are regional. with the new data, it is clear, they can no longer demonstrate that the region that was used before was appropriate for driver's side air bags. >> specific kaelt cars that you referenced, north carolina and california, santa monica area, what is the level of absolute humidity there?

and is it so different that you can say back up what you're saying, is that it needs to go to a more national level. >> if we could put up chart "d" over here. what chart "d" is information from noaa indicating the median annual dew point temperature. dew point temperature is a measure of total amount of water in the air or the absolute humidity. as you can see, the brown areas are where we saw initially all the incidents. then we started to see passenger incidents in the red areas. the new incidents in california and north carolina are roughly around the edge of the yellow and green areas, clearly indicating they are outside of the areas of the regional recalls and in areas of lower humidity. >> in the sense -- this is why

this issue is particularly difficult to get my mind around. so, if the issue is the absolute humidity, how -- what caused the defect in california and north carolina autos? >> mr. chairman, you're asking the exact same questions we're asking. one of the most frustrating parts about this is that neither the automakers nor takata have been able to get to the bottom of the root cause on this. we've been pushing them to do so. we are also working and hope to within the week hire outside expertise and begin standing up our own testing capabilities so we can supplement the work they are doing. they are responsible legally for getting to the bottom of this. we have pushed them to do so, including requiring answers under oath. between the fact of the root cause on the driver's side is not clear, now that it's clear it's outside those areas of high

temperature and high humidity and the fact we now have six total incidents, it is clear a regional recall is no longer appropriate for the driver's side air bags. >> very good. i appreciate that. so, in regard to the humidity aspect, the three automakers testify that they believe it is humid -- or humidity is the root cause, i don't have the level of confidence in that, but they've said they are going to hire a third party independent inspection of whether it is related to the humidity or something else. so my question, very quickly answer, do you believe that as well? that a third pert independent inspector is absolutely necessary? >> i believe we need to put all

resources forward to address this issue. also, let me be clear, a root cause is not required for a recall. all that is required for a recall is an unreasonable risk to safety. that's clear on the driver's side there is an unreasonable risk to safety outside the areas of humidity and temperature. >> i agree with the latter part. the reality for the consumer is if the root cause isn't identified, how can you have confidence they've solved the problem by putting in a new air bag? >> we share your concern. we will evaluate the adequacy of their remedy to ensure that the american public is safety. >> thank you. >> thank you. >> recognize the ranking member. >> thank you, mr. chairman. on november 26th nhtsa issued a recall request letter to takata acknowledging that there's a safety-related defect regarding the driver's side air bags.

i wanted to know, why did this request go to takata alone, either instead of or in addition to the manufacturers? why hasn't nhtsa issued recall letters to the automakers demanding they expand the recalls of the driver's side air bags? >> ranking member, on november 17th, i called on takata and then followed up the next day and called on all the involved manufacturers to recall these vehicles. i made a verbal demand to them. the reason we put a written demand to takata is because once takata does the right thing and agrees to this, it doesn't matter what the automakers do. there is a clear statement of a defect in all and all the automakers must recall those vehicles. what we were looking to do is to get these vehicles recalled as quickly as possible. >> no i understand that, but takata has said no to you. >> absolutely. >> it would seem to me, since that was their option, that it

would make sense to go to the automakers as well. >> in our next -- so, we're evaluating takata's response. in our next steps, we will work to push takata and automakers to recall these vehicles nationwide. i noted the actions by honda today, which is a clear and promising action, but clearly also not enough. much more needs to be done. we will push and use all the extent of our authority to push takata and the manufacturers to address -- >> well, what is your authority now that takata has said -- >> well, our authority under the safety act is our next step would be to issue an initial decision of a defect, then we would hold a public hearing, giving takata the opportunity to provide any evidence they have. so far, they have not provided any compelling evidence. we would give the same opportunity to the automakers. after that hearing we would weigh all the evidence and make a final determination. >> and how long would that take?

>> i cannot tell you yet because we just got the -- >> frame of reference, order of magnitude, how long? >> order of magnitude before a hearing could be certainly multiple weeks and likely multiple months. >> let me also ask you a question about your climate map. the darkest part -- well, there's florida but then there's also texas and yet on the original regional recall, you didn't include any part of texas. why is that? so, the original -- all of the original incidents occurred in florida or puerto rico. so florida and puerto rico were included in those regions. there's -- you know, this chart doesn't show all the gradation in humidity levels. that said, we have pushed all of the automakers involved to cover the same region, at least the same region, not just in florida and puerto rico, but all around the gulf coast to ensure not

just that the darkest color is included, but that there is a significant buffer zone outside of the darkest area and the red -- >> no i understand. it's just curious to me if you think that at least humidity is a key factor that why -- the first choices wouldn't be those areas of highest humidity in your initial recall. >> well, it was because all of the data pointed to incidents in initially the more southern parts of florida and puerto rico. so, we went with the initial data, but as we got more data, we acted quickly to make sure the recalls were expanded. that was one of the benefits of the testing we pushed takata to do, is that we started seeing failures outside of that area and that made clear to us the evidence was pointing to the need for a broader recall. every time the evidence has pointed to the need for a drooder recall, we have pushed

on industry to act on that. >> i want to go to another topic. you know that our ranking member of the full committee, waxman and i, had introduced new auto safety legislation this year. which among other things would improve the early warning reporting smg by requiring manufacturers to provide more information, making more information public. could you briefly -- let's see. maybe i'll just put this in writing. if you could briefly describe how the early warning reporting system works, if you could provide us that information, that would be great. >> we will do so. >> thank you. >> thank you. the chair recognizes full committee chair mr. upton for five minutes. >> thank you, mr. chairman. welcome back, mr. friedman. so, you've seen these reports. >> yes. >> the one that i cited earlier and "usa today." i think you might have written a response to that in terms of the editorial f i recall, a number of weeks ago.

so, as you try to connect the dots, since these stories have emerged, what have you done as relates to going back to takata and seeing whether or not, did they really do these? were they really off hours and weekends? what did they do with the evidence? how does that comply? i don't know if you've thought there's enough evidence, i'm not a lawyer, enough evidence to go back to the -- to see if, a, they were true, if there's actually someone is liable for criminal sanctions? i mean, what is -- what is your response behind the scenes to what has been reported publicly? >> mr. chairman, we took two steps. first of all, we looked into all of our information. second of all, we issued special order to takata compelling them, under oath, to provide us with all information on any testing that they have done related to -- >> have they done that? have they reported back yet?

>> they have -- they provided their submission as of december 1st. >> monday. >> and my team is going through the voluminous data to get to the bottom of acted quickly to make sure that we could get to the bottom of this. >> so you don't have -- you haven't been able to get -- since they reported back monday, you don't have -- will you be able to share with us your -- what they submitted? >> we will dig in to all that information and we will be more than happy to brief you and the committee on what we find. >> what has been your response to the reports and the under reporting, 1,700 cases by honda as relates to how you all are supposed to function? >> my personal response was shock and frustration that honda has failed so significantly to follow the act. again, we issued a special order

to honda to get to the bottom of this and to push them to discover not only about the 1,700 failures but what other failures are associated with their reporting of early warning data and information. we are -- our team has gotten back that information also just recently. we're digging through that information. and to determine -- they have basically admitted third guilt. now the question that we're trying to determine is how many different ways did they fail? how many different ways might we have to consider fining them to the full extent of the law? >> have you communicated with the other auto companies, all of them in terms of what honda did and to make sure that in fact the other companies have not followed that same type of pattern in. >> we have two steps along those lines. one in my expectation as would you have exasked me that question. so today i'm calling on every

automaker to do an audit of their early warning reporting and provide to that us to ensure they are fully following the act and can demonstrate that to us. we are looking at other measures potentially compelling them to provide such information. but i think every automaker should take the responsible shep of doing their own audit to determine an ensure that they are appropriately following the act. and if they are not, report that information to us and fix the problem immediately. >> now, you indicated in your testimony that you have been responsible for takata quadrupling their testing. have you determined that by quadrupling that rate, would that be sufficient to generate the needed data to understand the current problems? >> no. in fact, i was very encouraged to hear -- first of all, we continue to push takata to do more. second, i was encouraged to hear toyota, ford and honda agreed to

do additional testing. we issued a general order to each and every automaker involved to require them to provide us with all the information they have on testing. we are trying to push the entire industry to ramp up their testing. we are also working to stand up some test facilities of our own so that we can verify the work that they're doing. >> appreciate it. i yield back. >> chair recognizes full committee ranking member, mr. waxman. >> thank you very much, mr. chairman. on november 18, nitsa announced it was calling toen takata and ought mo automakers to expand the recall of defective driver side airbags to a national recall. they based the decision to expand the recall on airbag failures that occurred outside of the high-humidity areas covered by the regional recall. mr. freedman, you have determined humidity is no longer a key factor or contributing

factor to represent tured in these airbags? have you determined that consumers outside of high humidity regions are potentially in danger from ruptures? >> regarding passenger side airbags, all the data continues to point to an issue associated with high temperatures and high humidity over long periods of time. on the driver's side airbag, while humidity may still be a contributing factor, it is now clear based on the evidence that that is not simply the dominant factor which is why we have called on them and made clear to them while we accept regional recalls where the evidence supports it, the evidence does not -- no longer supports a recall limited to those freefshous areas. >> in september, ranking member interest dwoused a bill that all recalls occur on a national be a s sis. cars are mobile and move from state to state. you can commit to re-evaluate the procedure that allows for

regional recalls based on climb mat or environmental conditions? >> ranking member, each and every day we are looking at how question do more and better for the american public. this issue is certainly cause us to continue to look into this issue. >> the committee has received takata's testing results from over 2,500 airbags that were collected as part of the regional recalls or safety improvement campaigns. these results are a bit perplexing. they show no ruptured from the driver's side airbags but they show more than 60 ruptures of passenger side airbags. in the case of one auto manufacturer with one type of airbag, one of the -- one of every eight airbags from southern florida vehicles ruptured during tests. can you help us understand why they have asked for a national recall on the driver's side airbags but lass not done so with the passenger side airbags

even though takata test results seem to show higher risk for those airbags? >> so if you look at chart a, the red dots are multiple cases during the testing of where there have been failures in passenger side airbags. each and every one of of the failures in the real world and in testing have all happened in areas of high temperature, high humidity, consistent exposure to those areas. in this case, we must follow the data. and the data on the passenger side clearly indicates that the problem is in those areas. that said, our investigation is far from over. we are pushing for additional testing. and if we receive any evidence indicating that the problem is broader, we will act and we will act quickly to protect the american public. >> is the issue with the driver's side airbags a different issue than with the passenger side airbags? what's the difference that makes you confident in calling for a national recall only on the

driver's side airbag? >> we are following the data and that's the basis for our decision. we do know that there are design differences between passenger side and driver's side airbags. let me be clear. as takata and the automakers indicated, they have not yet gotten to the bottom of the root cause of the issue. that's a critical step that we are pushing for. we are involved in because getting to the root cause will help dramatically clarify things for consumers, for autd toe makers, for suppliers and for the actions that each and every one must take. that's a critical step and we will continue to push ourselves and industry to get to the bottom of this. that's one of the reasons why we are now looking to get under contract hopefully within a week an expert in propellants and airbag production and design so that we can have added expertise on top of the experts we already have to get to the bottom of this as quickly as possible. we will leave no stone unturned in our efforts. >> honda failed to report 1,729

serious accidents resulting in injuries or deaths to nitsa between 2003 and 2014. eight of these incidents involved takata airbags. can you explain how this information could have been used if honda had reported it like it was supposed to and can nitsa penalize honda for this failure to report? in your view, would increasing penalties help ensure manufacturers report the information they are supposed to do? >> ranking member, the way we would use and the way we use all of the early warning information is to spot trends, cases where there are mow tenl defects. any time an automaker fails to provide that mfgs to us, it leaves us more hamstrung in our ability to find problems quicker and to get the problems fixed sooner. we are one of the things that we are determining right now, based both on han da's admission of

their failure and on the information they have provided is to what degree penalties are appropriate. but i can assure you, we will hold them accountable to the full extent of the law. that said, as you indicate, our maximum penalty for any single incident is $35 million. sadly for too many car companies, that's pocket change. that needs to change. under the grow mshg act, the president and secretary have called for the maximum penalty to be increased to at least $300 million so that it will send a clearer message. we have worked over the last six years and have fined automakers more than $160 million using our authority. more than any administration ever has before. but it is clear to us that we need a bigger stick. >> thank you. thank you, mr. chairman. >> thank you, mr. waxman. now recognize the vice chairman, mr. lance. >> thank you very much, mr. chairman. i'm interested in the time frame moving forward in answer to the

congresswoman's question you said it might be weeks or months. i'd like a little more specifics on that. your november 26 letter, there was a response on december 2, a response with which you fundamentally disagree. and i would imagine i disagree as well. what is your next step? >> thank you, vice chairman. our next step -- my team already began once we received that -- the information from takata on monday in response to our special order and yesterday in response to our recall demand, we are did iing into that data. we are evaluating their arguments. we are marshaling our evidence. >> is their argument in the three-page response that they gave you? >> that is the extent of their argument. >> rather weak tea, in my judgement. >> i agree. >> what's the time frame? because the american people need to be assured that their automobiles are safe. what is your next step, when will that occur in. >> our