country. well, the first thing that needs to be done is to take care of consumers. auto makers need to get a replacement part so that the airbags can be replaced. that needs to be sent to the dealers and they need, because of people potentially driving around with a defective airbag in their steering wheel and dashboard, the dealers, the automobile makers need to provide a loaner vehicle or a rental car for those whose cars cannot be immediately fixed. general motors recently took that kind of step for certain models, with faulty ignition switches.

and there's no reason why the auto makers covered by this notice should not be required to take the same kind. i think it is absolutely imperative in view of the fear that has gripped the public by virtue of what has already been said and what will be stated in in hearing today that a loaner or rental car would be provided for someone if they cannot get their replacement of their defective airbag on the recall list done immediately. the owners should have a right to expect that the cars that they drive are as safe as possible. so that's going to be what we're going to be facing in the next immediate future, as we dig into

the question of what in fact is the problem. i've written to secretary fox urging him to impose civil penalties up to the full extent of his law on any company that refuses to provide drivers with an alternative form of transportation. if they're going to have to wait to have their car repaired. the american people have a right to know about the story behind this airbag recall. and so that's why we're here today. now, let me just show you some of the items. this is part of the steering mechanism.

it would be facing the driver like this. and it would look like this in the wheel of the steering column. and of course the chemicals inside this mechanism, upon impact, a chemical reaction causes an inflation of the airbag and upon close examination you'll see the little holes around the mechanism that the gas that is created by the chemical reaction comes out, inflates the airbag and it's a device that has saved many, many people's lives.

this compound, ammonium nitrate, seems to have a problem. along about the turn of the year 2000 when it was changed as the compound, perhaps some of the metal as well, and when the explosions occur, instead of the gases form to fill the airbag, additionally it explodes with such force that this metal shreds. and as a result, what you see in this particular case of an

airbag, metal has shredded it, here's a big hole. here's another hole. and the very device that is supposed to save lives become a device that is taking lives. so that's absolutely unacceptable. now, after the opening statements of the respective chairmen and ranking members, i have asked an air force active duty first lieutenant, who happens to be stationed at the large egland air force base in

fort walton beach, florida to be our first witness and she will give you a firsthand account as to what her encounter has been with the defective airbag. so let me turn to our ranking member, senator thune, our future chairman of this committee, senator thune, thank you for participating. >> thank you, senator nelson for serving as chairman of this morning's hearing to examine the alarming takata airbag recalls and the actions of the national highway traffic safety administration. these are currently issues that belong on the commerce committee's agenda and i appreciate very much your calling this hearing to examine these issues. i first want to thank lieutenant stephanie erdman for being here today, thank you also for your service to our country. we appreciate you coming here to tell your story and help inform this committee.

this hearing is an important one and our discussion today will explore matters of public safety and accountability. ensuring the safety of america's motorists is a priority, but the public's trust has been shaken due to the record number of recalls this year and the beliefs many have about problems in the industry and at ntsa. this year record fines have been levied against toyota, g.m. and hyundai. now with the latest problems with takata airbags, we're examining aan apparent failure with serious consequences. today we will be asking takata questions about how these faulty products made it into consumer'' vehicles when the problem was first discovered and what steps if any could have been taken seen owe sooner that may have save lives and prevented injuries. whether the allegations were reported in the "new york times." questions also exist about the approach to these recalls and the wisdom of the agency's original decision to request

regional rather than national recalls, a decision which nhts has since reversed for some of the vehicles. the recalls for this year should be a wakeup calm. i believe we can do a better job addressing safety issues as they arise and holding auto makers and others accountability to ensuring the safety on america's roads the major auto makers and other manufacturers have instituted or sought time prove internal safety reporting systems that encourage employees to report safety problems. but reports of employees whose concerns may have been ignored, silenced or possibly even covered up persist. i believe we can do more to ensure that ntsa is informed of potential defects as early as possible. that's why later today i along with senator nelson will be introducing the motor vehicle

safety whistle bower act. such information leads to d.o.t. or department of justice enforcement action that total more than a million in penalties, the whistle blower would be eligible to share in a portion of total penalties collected. this bill will also protect whistle blowers' identities and allow ntsa to share information with the department of just is the and other federal agencies where appropriate. other agencies have similar programs including programs at that incentivize individual to report information to the

securities and exchange commission and the i.r.s. if there are potential whistle blowers with important information to help ntsa identify more defects, we want them to come forward so these problems can be identified early in the process. i think we would all agree it's better to address a problem before injuries or deaths occur if at all possible rather than relying on fines imposed after the fact. i look forward to working with stake holders as we continue our oversight of these safety matters. we will undoubtedly revisit this issue. having written president obama urging him to swiftly fill the position at ntss that has been vacant for 343 days, i'll pleased the president finally announced his intention to nominate dr. mark rosekind. i look forward to reviewing the nominee's qualifications. i urge all my constituents watching this to pay attention

to any recalls or field actions and if you determine your vehicle is subject to a recall to get it repaired quickly by an authorized repair facility. i want to thank the witnesses for being here today, i look forward to your testimony. thank you, mr. chairman. >> thank you, senator thune. we want our two leaders in the subcommittee to make a short opening statement. the chair of the subcommittee, senator mccast kill. >> thank you. i find it troubling, but more importantly i am sad that i am not surprised, that we find ourselves examining another example of manufacturers failure to fulfill safety obligations that could have saved lives. honda is under investigation for failure to provide early warning reports to ntsa related to the deaths the company has linked to takata airbags. takata itself is also under investigation by federal prosecutors over troubling

claims that it might have known a long time before it notified its auto manufacturer customers of the safety defects associated with millions of its airbags. 10 auto makers have now recall at least 7.8 million vehicles in the united states. under either safety recall or service campaigns related to takata airbags. what i want to get to the bottom of at this hour is what is the difference and isn't that difference important. a safety recall versus a service campaign. there seems to be some confusion among the driving public about the scope and severity of these recalls. and part of that is because not all the manufacturers are treating this the same, using the same language, and we have failed to have clarity from ntsa in this regard. in this committee we've held

three auto safety hearings since general motors recalled 2.6 million vehicles earlier this year for defective ignition switch that was largely ignored by the company and federal auto safety regulators for more than 10 years. sadly i think today we'll hear many of the same themes we heard in the g.m. investigation, an industry that fears no consequences for not complying with the law, companies more focused on defending against private litigation than promoting safety, and a regulator that lax both the resources and technical expertise to effectively do its job. i am pleased that the president has finally nominated a candidate to serve as ntsa's administrator. i look forward to hearing from him regarding his plans to strengthen the agency's oversight. he has a resume that reflects years of work in the area of automobile and transportation

safety. this committee should move quickly on a hearing to consider his nominations. i have a lot of questions. as we head into a new session of congress this committee should also make legislation reauthorizing ntsa a priority. we aren't going to agree on everything, but i think there's enough common ground on the reforms that are needed to act without delay. i look forward to working with the new chairman in that regard and all the members of this economy in the next congress. >> i'd like to thank lieutenant erdman for being here. i think this is the year of the airbags. g.m. had defects with airbags that would not deploy. and now we have takata airbags

that send shrapnel into the face of those that are driving. as this committee knows, i know a little bit about cars, i race them, i build them, i break them, and i fix them. i probably break them more than i race them, but that just seems to be the way it works out. but i will tell you the most terrifying thing a driver experiences is a crash, and at that moment the only thing that matters in their lives is that airbag. we have common themes emerging from all of our hearings. this year from this committee and our subcommittee. it's taken too long for the information found within the company that there is a defect and then getting these cars off the road. i'm proud to stand with senator thune, senator nelson, and mccaskell. it our hope that the whistle blowers act will solve the problems we're seeing time and again with these recalls.

it's my hope that a significant monetary payout will get this information to the public faster and faster means saving lives. today this committee has takata here. we need to know what they knew and when they knew it. i'm very troubled by the "new york times" article that alleges that there may have been a coverup, and i'm glad to have ntsa here. yesterday the president submitted his nomination for ntsa administrator to the president and i have called on the president to do this more months now. we will we view this nominee and process him accordingly. ntsa need a confirmed administrator, it's been almost

a year and i fear that the trust the public has in this agency has been eroded greatly. one of the concerns i have is that ntsa is not able to recognize these defects fast enough. i want to work with ntsa and my colleagues on solutions to that. as you know, nevada will be producing cars very soon with the new tesla center. we need to make sure that ntsa can handle these cars of the future as well as the cars we have here today. so thank you, mr. chairman, i look forward to this hearing. >> with the indulgence of the committee, we want to get on into the testimony. after the lieutenant, we will have the next panel, the chairman will defer his questions so we can get the members plenty of time to have their questions, and then we have a third panel which is the administration. ntsa. so let's get right to it. lieutenant, we are certainly

appreciative that you would be willing to step forward, lieutenant, first lieutenant, united states air force, stephanie erdman, a graduate of the university of texas system, rotc graduate. one of her first duty stations of which she is a compliance and testing officer. she was driving a 2002 honda, and this is what happened to her. the shredded airbag just like the one that i showed you here

on the left poster, this is what the car looked like. she had a passenger, you can see the airbag still inflated in the car. and unfortunately, and she has given us permission, that's what she looked like as she was being taken to the hospital. so if you would share your story. >> good morning, my name is stephanie erdman, i'm honored to be here today to serve as the voice for the people who have been forever silenced because of the exploding takata airbags.

on behalf of everyone who has suffered because of these defective airbags i would like to thank the committee for holding this hearing. i hope that no other families will have to go through the terrible ordeal that my family and i have had to endure. on september 1, 2013 my life was changed forever. i was driving my 2002 honda civic on highway 98 near egg land air force base, florida where i was stationed, i was on the way to get groceries with a friend. as i was driving a car took a left in front of me and our cars collided. when the impact occurred shrapnel from my car's airbag shot through the airbag cloth and embedded into my right eye and cheek. i was instantly blinded on my right side. i felt gushing blood running down my neck, is in we are tide. when i got to -- i was terrified. they did a scan when i got to the hospital, it had punctured and fractured my right nasal bone and the tip of the shrapnel, and the tip of the shrapnel had embedded in my

right sinus. since that day, i've endured multiple surgeries and therapies. i have more to go still. my vision will never be the same. i will never be the same. my accident involved a moderate frontal impact, the headlines on the front of the vehicle weren't even broken. my passenger only had mild james and bruises. i should not have been injured in this shocking and terrifying way that i was. what happened to me was grew some. the photo that the e.m.t. took of me with the shrapnel in my eye is scary to look at, but i believe it is necessary to grab the attention of those who have the ability to do something and have to keep this from happening to anyone else. it is easy to think that i'm the only one who has suffered because of this accident, but it's also been exceptionally tough on my family. they try to be strong for me and

i see it. but i can tell that when ever i talk about it, they are also hurting. i know i have physical scars about this tragedy. but people who care about me have scars as well, they are just the kind you cannot see. these companies should have done everything they could, they claim that they notified customers as soon as they found out about the problem. that they extended the recalls as they learned about each set of additional potentially affected vehicles as soon as they colorado i believe that the facts show differently. it has been six years since the first recall covering these deadly takata airbags were just starting at 3,940 vehicles has now ballooned to over 7 million vehicles, with the exact same vehicle in one state is not even recalled in the next state over. i do not understand how crossing a border simply means that that vehicle is now safe. i do not also understand why the dealerships that sell these vehicles and service them are not notifying customers. america honda motor companies

claim that they notified the honda certified dealership where i brought my civic about the recall for the drivers sigh airbag in february of 2010. i took my car into the dealership for service three times after they supposedly received the information. the honda dealership never told me about the recall, they never performed the recall repairs on my vehicle, and they never warned me about what might happen if my airbags deployed. they did nothing. i also learned that honda claims they sent a recall notice to my house in 2010. they have records showing that the information, the envelope containing critical information was returned to them as undeliverable. instead of trying to notify me in another way, they did nothing to warn me. it is in honor of my family and friend mo support me so much that i ask the committee to demand real answers. it is an honor the families and

friends of all who have been injured by these defective airbags that i ask the economy to insist that these companies explain why they waited so long to identify all these potentially deadly vehicles, and it is in honor of those who cannot be here today, because they have been hurt or killed by these dangerous products that i ask the committee to get to the bottom of why these companies did not try harder to warn us. i'm also, i'm so honored to be here today to have the opportunity to tell my story. but please understand that i'm just one of many people who have been affected by these deadly airbags. i am hopeful that congress will look at a way to improve the recall notification process. i hope there will be no more mothers taken from their children or no more fathers blinded by the exploding airbags. i ask the committee to do everything in its power to make sure every vehicle with a defective airbag is made safe. thank you.

>> we will do that, lieutenant. you have our promise, and that's why we have this hearing today. and we want to thank you for the courage of you stepping forward to come and tell your story. between what the lieutenant has said and the pictures, i think you get the picture. so with the committee's permission, i'd like to get right on in to the next panel. thank you, lieutenant. you are very kind. appreciate it. if we could ask the next panel, please, to come up. the senior vice president global quality assurance for the takata corporation, the manufacturer of

the airbags. the executive vice president of honda north america. the senior vice president, vehicle safety and regulatory compliance, the chrysler corporation group. gentlemen, thank you for coming. please be seated. mr. shimasu, we will start with you, you are very accommodating to speak in english, and this committee appreciates that. you have with you a translator

if there is any difficulty, and for you making the effort to speak in english today, we want you to know that we appreciate it. please proceed. >> thank you. chairman nelson and the ranking member thune and distinguished members of the committee, my name is, i am the senior vice president for takata corporation. i am own -- honored to appear before this committee to offer the perspective of takata

corporation on the important issues and the examination at today's hearing. takata's mission is to make products that save lives, and prevent serious injuries. when of one of our products does not perform as expected, it is our first priority to understand the root causes of the issue. if we identify a program in a product, a problem in a product design, production or installation, we do not hesitate to take the necessary steps to ensure that the problem is addressed properly and promptly. all of us at takata know that the ruptures that have been the subject of recent -- are very important to public safety. even though millions of takata airbags have inflated properly. and saving lives and avoiding injuries in hundred of thousands of accidents.

any failure of an airbag to perform as designed in an automobile accident is incompatible with takata's standard for highest quality assurance. we are deeply sorry about each of the reported instances in which a takata airbag has not performed as designed. and the drive or passenger had suffered personal injuries or death. our sincerest condolences go out to all those who have suffered in these accidents, and to their families. takata is watching closely with auto makers and ntsa to important the ongoing recalls. and we are devoting extraordinary resources to producing quality -- necessary to fulfill all the

auto makers orders. we are also taking extraordinary efforts in answering requests for information about these matters. we are committed to being fully transparent with the government. takata, strongly agrees with the position stated by ntsa on november 9, 2014. that the current -- our best current information supports the bill that these must be the pray ority -- priority. it is imperative that all owners of vehicles in these regions respond to the recall notices at earliest opportunity. we are confident that the

airbags takata is producing today, including the replacement for recalled units, are safe. we have confidence in the integrity of our engineering and our current manufacturing processes. we believe that properly manufactured and installed airbag we are producing today will work as designed to save lives for the expected life of the automobiles. while each instance of an airbag failure is terrible and unacceptable to takata, it is also important to remember that takata airbags continue to deploy properly as they were designed. and our airbags are helping to save lives and prevent injuries on the road every day. as we move forward, takata will continue to cooperate closely with auto makers and with governmental regulators and we will take whatever actions are

determined to be necessary in the public interest, and do our best to advance safety for the driving public. finally, as the committee is aware, english is not my native language. i will do my best to answer questions in english. but i may ask for clarification, and i may need assistance from an interpreter here from time to time for help in understanding the committee's question. thank you, mr. chairman. >> of course, you will have that assistance, and one of the things that we will want you to answer is about the change to ammonium nitrate and the problems that occurred there after. mr. shostik, you are a representative of honda, being the executive vice president of

honda north america, also talk to us about the recalls, and the provisions of loaners and or rental cars. >> thank you, chairman nelson, senator thune and members of the committee. i'm executive vice president with honda north america. on behalf of more than 28,000 honda employees in toughs, 1300 automobile dealers and more than 600 north american suppliers, thank you for the opportunity to be here today i want to be begin by expressing our deepest sympathies to those individuals and families who have been affected by these tragic incidents. we offer our sincere apology to the families of those who have died, to those who have been injured, including lieutenant erdman, and to those who have been in any way inconvenienced due to the defects in takata

airbags in our vehicles. airbags save thousands of lives each year. but we recognize that even one customer who is injured or loses their life when an airbag does not perform as intended is one too many and completely unacceptable. we understand the urgency of the current situation. and are taking pro-active steps to encourage honda and acura owners to get their vehicles repaired. specifically to meet the need of our customers related to these airbag recalls. we've posted written messages prominently on our websites to reassure our customers that we have procedures in place to address their individual needs customers with affected vehicles who desire alternative

transportation until their car is fix have access to loaner cars and rental vehicles at no cost to the customer. and we are working in our service and parts divisions with our dealer network to en shall your that replacement inflaters available where and when they are needed. like many auto makers, honda looked to takata for the supply of airbag components because takata was an internationally recognized safety systems supplier. as the manufacturer of the complete vehicle, we relied on takata for its expertise in this specific area of technology. we provided our performance requirements and takata designed the airbag component to those criteria. beginning with the 2001 model year, takata began to supply a new generation of components. by 2004 we had sold several millions vehicles equip with these airbags. it with a then in 2004 when we learned of an airbag inflater rupture in one of our vehicles and reported that to ntsa. this remained the only airbag

inflater rupture we were aware of until three years later. since 2007 we have been involved in a safety investigation of takata airbag inflaters. takata identified specific manufacturing issues as the primary factors of the rupture events. starting with the recall in november, 2008, and with every subsequent recall, we gathered component parts from a time period that corresponded to the manufacturing issues and provided those to takata for further investigation. additionally, we recalled vehicles that were outside of the range takata had identified for the purpose of additional analysis. as new evidence identified new risk, honda acted to expand our recall population. the investigation process has, since 2007, been designed to replies defective takata inflaters and also to seek out data using the public recall process. the investigation continues to

this day. with regard to the 2004 inflater rupture, takata advised us that their analysis demonstrated that it had distinctly different characteristics compared to the ruptures that led to the first recall. at honda, the founding principle of our company places the highest priority on the quality of our products and the satisfaction of our customers. now, today, we are operating with even greater energy and greater focus to quickly address our customers' needs. and with every action of our company, dedicating ourselves to honor the relationship we have with our customers. thank you. >> mr. shostek you didn't say anything about loaners or rental cars.

>> mr. chairman, i believe i d. customers with detective vehicles who desire transportation in the form of loaners or rental cars, have them available to them at no cost? >> immediately? >> we have them in place now, sir. >> for all of your dealaries cross the country? >> in the form of loaners, we've expanded our loaner program and we also have the option of rental cars. we will take care of our customers, sir. >> okay. let the record show that's that's been said. we certainly have had contrary information to this point. if that's the case, then i certainly want to congratulate you for the obvious reasons. all right. mr. kuntselman, senior vice president, vehicle safety, and regulatory compliance of chrysler. >> thank you. chairman nelson, ranking member thune, members of the committee, my name is scott kunselman, the senior vice president and head

of safety and regulatory compliance at chrysler group. i lead an organization with a mission of safeguarding our customers. i'd like to thank the committee for the opportunity to appear today to discuss this important matter. today's automobiles are the monk the most sophisticated and complex consumer goods on the market. auto manufacturers are more committed than ever to developing advanced safety technologist to reduce fatalities and injuries resulting from motor vehicle crashes. on a daily basis we work to design, engineer and manufacture vehicles to with stand a myriad of operating conditions. promoting and ensuring vehicle safety is a responsibility shared by auto makers, suppliers, government, and consumers. chrysler group looks forward to continuing this collective engagement with takata and ntsa to help address the current situation. chrysler group has been actively

engaged with takata and ntsa since the first, since takata informed us that certain airbags used by other auto manufacturees may explode upon deployment. that has since been link told four fatalities. this group of inflaters has never been used in our vehicles. our vehicles were equipped with takata's beta population of inflaters and in april of 2013 takata assured us that the manufacturing nonconform appears that led to the alpha population recall had been corrected. chrysler group engineers conducted a followup investigation and confirmed that the beta inflaters benefited from an upgreated manufacturing process. in october of 2013 we learned that one of our vehicles in southern florida was subject to

a high pressure deployment involving a drivers airbag and causing personal injury. this remains the one incident of its kind involving one of our vehicles. in response to this incident and working with takata and in consultation with ntsa we launched an investigation and conducted component test egg -- testing. in may of 2014, we were adviced of four incident moving vehicles produced by other manufacturing e manufacturers, with the inflaters similar to the ones used in our vehicles, and in june of 2014 this year chrysler group announced plans to replace beta population inflaters in certain vehicles, in areas known for high humidity, a factor believed to have played a role. we will be notifying customers when they may schedule service or replacement. our action covers 371,000 vehicles in florida, michigan,

puerto rico and the u.s. virgin islandings. it's important to understand the distinction between the alpha and beta populations. the alpha inflaters are associated with the most severe events, a substantially higher incident rate and were found to contain a defined manufacturing defect. none much our vehicles were built with an alpha inflater population. again our vehicles were equipped with beta inflaters, and in our vehicles these are known to have deployed as intended more than 10,000 times across the u.s. and 830 times in the areas that i just mentioned. that are covered by our field action. as i previously stated there's one incident involving a high pressure deployment in one of our vehicles, this took place in florida, a state covered by the announced regional action. chrysler group continues to work with ntsa as the situation evolves and will continue to -- in closing i would like to

reiterate our belief that promoting and ensuring vehicle safety is a responsibility shared by auto makers, suppliers, government, and consumers. chrysler group will continue to work collaboratively with takata, ntsa and others to address the situation. >> was that airbag deployment in south florida, was it alpha or beta? >> it was from the beta population. >> and therefore, of those that are in your vehicles, are you providing loaners and rental cars until they can get it fixed? >> as we deploy our field action, we will have rental cars available to those who need them. what i would reiterate, our number one goal as you suggested at the opening is to have the parts available and quickly service the product, that is our number one goal. when that can't be accomplished, we will make loaner cars available.

>> you said that's not until the middle of december. >> we launch that in the middle of december when the parts are available to initiate this action. >> so do they get loaners and rental cars in the next three weeks? >> in these three weeks time, concerned customers can contact us through our hotline and we will on a case by case basis suggest those needs. >> thank you for making that clear. senator thune. >> thank you. mr. shimazu you mentioned in your written testimony that you have confidence in your current engineering and manufacturing processes. and my question is what changes have you made to your manufacturing processes that give you the confidence to testify that the replacement takata airbags are in fact? >> senator, let me explain about history of the vehicles. every time since 2007 or 2008

time period, we have some issues identified, and then we identify the root cause of the issues, and we address these issues to fix the problems at the same time we did the recall. every time it happened, we address all issues and take care of it. and currently we believe the products we are producing right now is come from the controlled manufacturing processes, and we believe it's, these products, will work as designed, and are safe. >> but what change have you made in that process that leads you to believe that? >> yes.

there are two junior cause of the problems, according to what we studied in the first instance. one is, the problem we thought was pressed from the powder, and if we controlled the compression force to get the certain testing, however as that, at that time the beginning of productions, the compression force control does not work well, and as we expected, so we change the press machine and now the new press machines can control the compression force for each chamber. and at the same time we have a device called auto executive device, which if the compression force is not as designed, then

it would detect that failure, and the device would reject this problem. so this device will take care of the issues of conduction force. and the other one is a humidity control. ammonium nitrate has many advantage to use that, however it's sensitive to humidity. so we put some special control of the humidity during the processes and assembly. but because the issue exist in the past and also the humidity controls is --

so we control the humidity during process in the plant, much tighter. so maybe since then we can -- >> the media report i referenced earlier that takata may have been aware of the dangerous airbags as early as 2004, i know you've denied those allegations in the media. but we need answers from an independent source about when takata became aware of the depending and will it was concealed from nhtsa. will takata initiate an investigation and release a public report about whether there was any wrong doing? >> according to the record of

communication i saw, the date states on may 2005. and it's the communication including picture also, that the first time according to my understanding we started investigation. is 2005. and that if there are any communication problems because of that i am not aware of that. but again, the record i confirmed shows the date, may 2005. but at that time is our only pictures available, no, we check the production record, and lots of time a different picture show shows an anomaly.

>> but were, will you initiate some sort of i believe investigation. i know you're talking about some of the things you looked into. but i think there's a real concern here that perhaps isn't as independent as it could be. and so have you given thought or would you initiate some sort of an independent investigation where someone outside the company that takes a look at these things and can report back about whether there was wrong doing, and if not why wouldn't you do that? >> senator, since i was not -- at that time, so i couldn't answer your question. >> my question is prospectively now, would that be something, i think for most of us that's something that with make sense , to have somebody that's independent take a look at this,

examine this and, similar to what general motors did with the ignition switch issue. >> yes, senator. i agree with that. and actually we view the independent center to check the materials and processes too. so actually we are doing it presently but not at another time. >> we can revisit that issue. there are, as we heard from lieutenant erdman, when she referenced that her vehicle was serviced multiple times at dealerships and after the recall but prior to the tragic accident. is there not some policy where your dealers actually when someone brings in a car in like that would at least notify the customer of some of these safety matters that she didn't receive notification until three days after her accident? >> indeed, senator thune, there is such a policy and we failed

lieutenant erdman and our dealer failed her. you her her speak about notifications from honda that she did not receive. so we did not effectively get word to her of her recalled vehicle. in addition, as she had told you, she brought the car to a honda dealer for other service. her vin number was not checked. and as a result, we lost opportunities to repair her vehicle. we failed lieutenant erdman and the dealer failed her. we have a policy, our dealers are independent, as you know, we communicate to them regularly about the importance of checking each car when it comes in for service to see if there are any outstanding recalls. we communicated that in march of this year. we communicated that a week or so ago. if you'd also look at the

complete testimony that i made, we are endeavoring to continuously improve the way we reach out to customers. i have to say the populations involved in these recalls are older vehicles. it is harder to track down the current owner. that is not an excuse. we have to do better. we failed lieutenant erdman. >> we and because they're older vehicles, the i deal time is when somebody brings it in. >> i agree, senator. to our everlasting regret, we missed those opportunities. >> and the mail, we're finding out i think isn't the most effective way to get that message out there, and these dealerships may be dropping the ball. so i'm interested in knowing what you intend to do to improve that in the future. if i could get mr. kunselman to

respond to what chrysler's policy is. >> similar to what mr. shostek said, our policy is to through the dealership communicate to consumers when they come to the dealership, what open recalls are on their vehicle. in fact the electronic systems that are are available that identify the vehicle as it enters the dealership automatically has this information. it's readily available, they don't have to work hard to find it. it is our policy that they make every effort not to have the consumer leave the dealership without scheduling or performing that service on site. >> thanks. >> i would suggest that the next three weeks might be critical. that you all be forward leaning on that. i thank you for stepping forward

and taking responsibility. specificly with regard to the lieutenant. and i would urge you, as senator thune has requested and this committee will follow up, that this independent inquiry be quick and swift and public. >> thanks for holding this hearing. thank you for our witnesses. i wish to say that i really believe there has to be a full investigation of what happened here. i say this on behalf of a victim in my state who was driving in her car in minnesota, it was a 2002 bmw but this actually happened in 2013 and there had not been a recall and that air bag exploded in her face. she is permanently blind. so that is why this looking back and trying to figure out what happened is very important to

me. why did it take takata years to disclose the danger of the defective air bags? when did takata no that it was no limited to certain honda vehicles? akata conduct secret tests on those air bags and not report the findings? to me those are key questions on . in addition on how nhtsa handled this. so my first question is honda's been aware of these air bags for years and you issued the first recall back in 2008. and since then it has been expanded multiple times. why do it that way? why doesn't honda just order one

expansive recall from the outset and avoid these additional recalls? >> senator, in 2007, we saw a series of inflater ruptures, defects, and began our investigation. when working with takata they identified specific manufacturing problems in their manufacturing plants that were related to the time that those inflaters were produced but which we put into our cars. we recalled based on that information. we expand the recall when another different manufacturing issue was brought to our attention by takata and in all we did four recalls from 2008 through 2011. i think it is important for the committee to understand that those four recalls which we did had no geographic boundry. they had no geographic boundry and the injuries that have occurred from -- there have been 45 injuries in -- because of ruptures in honda vehicles.

43 of those correlate to the time of those takata manufacturing concerns. and to our regret all four fatalities correspond to that same time. so we are talking about recalls that were done 2008-2011 because of different manufacturing issues that takata made us aware of. and there is pretty strong data that shows this is where the majority of the problems have been occurring and those recalls were -- >> i understand. i wasn't saying they were regionally limited. just you have these recall after recall after recall. clearly there's red flags. when this was in 2013, it just seems that it's a different manufacturer. ata had done a more global look in all their air bags i don't think this would have happened. so i get to you.

a november 6, a "new york times" article reported that takata secretly conducted test in your michigan location in response to the release of metal fragments issue with the honda accord. and according to the article two of the inflaters what specifically about the report was inaccurate? >> senator, again, it is regarding the incident of the honda vehicle in 2004 according to my knowledge it was informed to takata on may 2005 and there is no way we can do any test relating to that 2004 incident beforehand.

also, the series of instant that happened in 2007 and at that time is actually we started an investigation about the -- to identify the problem. at that time we have the series of tests of inflaters. all test results since 2007 -- that's the starting point of the investigation by us -- is shared with automakers and also nhtsa. >> just to go back to 2004 another time in writing. but my issue is my constituent got blinded in 2013. so in 2010, bmw sent a letter to nhtsa that it was aware of the takata air bags under honda recall. of course she was driving a bmw but that it had received documentation from takata indicating that bmw vehicles were not affected. so what documents were provided?

this is post 2007 now. we're back in 2013. so i'm asking specifically about bmw. and if you don't know you can send it to me later but i would like to know what documentation was provided to bmw about their situation. because they told nhtsa that they knew about these problems with honda's recalls, but they had received documentation from takata indicating that bmw vehicles were not affected. >> senator, can i confirm one thing? is it the driver's side air bag? >> i believe that this is the driver's side. yes. >> yes. let me answer for the best on based on what i know.

we do the recalls of the honda vehicles at that time and as you mentioned, senator, maximum times is the inflater cord. it's the dual stage driver's side inflater. at that time, the bmw, the inflater we supplied to the bmw is psda 4. the psdf 4 is a construction structor of the inflater. it looks the same from our side but the difference from psdi and produced in a different line. so that's the major reason, is the psdi was recalled. but we answered to the bmw that the psda 4 is a different structure. >> so when did you become aware that there were problems with the bmw? air bags?

>> i'm sorry i'm not familiar. i don't know the actual date. >> thank you. >> just so it's clear to everybody, what we're talking about -- this is the steering -- middle of the steering wheel. this is the inflater. and it fits in there. and then when the impact occurs, the explosion is supposed to come this way. but as we said earlier, if the explosive force is too great it breaks off this metal, and the metal starts coming through the middle. every one of us at this hearing table have had constituents affected by this. in florida, right in central florida, we've had one death. and in the case of cory burdyk,

a firefighter, he has no eye now for the rest of his life. very similar to the situation of the lieutenant but in this case the metal had penetrated his actual eye. this is why we're so concerned about this. and to get to the bottom of this. senator ayotte. >> i want to thank the chairman and ranking member for holding this very important hearing. i wanted to follow up on a question that senator klobuchar had asked you about with regard to the report in the "new york times" about the 2004 secret tests by takata. as i heard your testimony, in response to her question, you said that takata wasn't informed until 2005 about a particular

incident. and what incident was that? >> the incident happened in 2004 at the honda vehicles. and according to my knowledge, the driver was injured. >> ok. and then you said that there were a series of incidents in 2007 that prompted an investigation within takata. >> yes. >> when was nhtsa first notified? of any of this? >> according to my knowledge, there were three incidents that happened during the year 2007. that led us to deeply investigate the cause of the problems. >> why was it -- with the 2005 incident, was there any investgation conducted within takata? >> we did. we received the picture -- not

the actual module but we received the picture and our engineers checked the pictures and also records based on the serial number provided. and then as i said, our engineers recognized the anomaly from the picture. however, our records don't show any system error or any abnormality from the records. and then at that time, there's not enough technical evidence at that time that we believe is required for furtherer further investigation or action at that time. >> so you didn't take any further steps to investigate the anomaly that your engineer saw. did you report it to anyone? or did you talk to nhtsa about it? or honda or anyone else? >> according to my understanding, we didn't inform

nhtsa but we reported back to honda. >> throughout this, i would like to understand whether takata believes that as it receives reports -- and i would like to also inquire of mr. shotak from honda. when it received reports of both incidents of injury and unfortunately these horrible incidents of death, when do you believe that you reported them to nhtsa? and do you believe you've complied with the tread act? >> you will me to answer that, senator? if i might, to supplement on the discussion you've been having. the first event of a ruptor in a honda vehicle occurred in 2004. we received notice of that event through our legal department in may of 2004. we are still checking our

records. but as he said, what we can find now is that we provided that information to takata in 2005. we did report that 2004 event on our tread report, which is provided to nhtsa. as we were discussing, in 2007 there were several events and it was at this time that we and takata engaged in the beginnings of an investigation. ultimately in that investgation takata has made us a presentation that show the 2007 events and the manufacturing deficiencies that caused the defect, and also compared it to that 2004 event. the 2007 event, those manufacturing times clearly show improper density in the inflater

propellant. the 2004 event ultimately it was fully investigated and it shows a proper density for the inflater propellant. so it's not an excuse, senator, but that information we could have gleaned maybe sooner in 2004 would not have helped us predict the events in 2007. as i look back on our activity, i think we acted with urgency. but do i think there are -- we could have moved faster in some respects? i absolutely do. have we met our obligations to report tread? we have not and i think as the committee may know we have an ongoing internal review about that process. that information is due to be provided by honda on monday this coming monday. we will provide it on time. and we will share with them any

gaps or deficiencies in our tread reporting at that time. >> so i know that my time is expired here but let me just say that i echo the comments of my colleagues. this really does warrant a thorough investigation. because these time frames, the reporting requirements, the questions that have been raised and as you know gm undertook this activity with regard to the ignition switch and given the seriousness of this matter i would think that takata and honda would want to undertake the same. so let me urge you to do that as well. and my time is up. but mr. councilman let me just say i'm troubled by the december 19 piece because i think you should instead of waiting people , reach you with concerns

out to your customers regardless of how you view the data air bag differently than the alpha. so i think that -- i'm very concerned about the december 19 date. thank you. >> thank you senator ayotte for underscoring that point. senator heller? >> i also want to thank you for holding this hearing. read yourh her testimony. it does discuss your anguish and your promise to address this issue promptly. however, i think there was something amiss in your testimony. and that was that nowhere does it say that takata takes full responsibility. so i want to ask you right now. does takata take full responsibility for this tragic defect? >> can i ask my interpreter to

confirm your question? >> sure. >> senator, can i confirm the tragic defect. which tragic are you talking about? >> i'm talking about the five deaths. >> five deaths. >> do you take full responsibility for those tragic deaths? does takata take responsibility? >> excuse me. i understand we recognize the three victims' case is relating

to our product and during the understandingmy is that two others are still under investigation. >> so let's take the three. does takata take full responsibility for those three deaths? >> my understanding is our products in this accident worked anomalies so that caused the accident. from this stance, yes. >> i got a phone call from my wife recently, a good morning america piece was done on this issue. she's probably doing what every parent is doing in america today. we happen to own a 2007 honda

civic and we didn't buy it brand new. so we probably didn't get recall notices on that. and my wife would remember if she did. i want to give to you the same question that she asked me. if our 18-year-old daughter were to drive that car today, 2007 honda civic, would she be safe? >> senator, we have several different analysis of what the problems are with these air bags in our vehicles. as i mentioned before, the recalls that we did in 2008 through 2011, we have connected those to takata manufacturing issues and we urge customers -- and those have no geographic limits -- we urge customers to get those vehicles repaired because there is a risk.

there is a risk. with regard to the more recent regional recalls, where there is not as much information available as to what is the cause of the ruptures in the air bags -- that's where there is a concern about humidity, and we have the same concern about humidity. we look at the 45 injuries that have occurred, 17 of them have occurred in florida, also puerto rico and texas. the large majority of these issues are occurring in southern areas. so we are trying to understand if there is any additional risk out there. and when we find risk we act to recall. it's our responsibility to recall those vehicles when we find risks. >> as a parent, we did run the vin number through nhtsa's site and they said that a 2006 or earlier vehicle would been subject to the recall but not 2007.

how can you assure me today that a 2007 vehicle is safe for any young adult on the road to drive today? >> senator with your indulgence and understanding i'm not sure of all the exact models as i sit here the break points in terms of the recalls. if that vehicle was subject to a recall, we want it fixed. if that vehicle was not subject to a recall, we have not determined risk so we would deem it safe for the driver. >> we had a conversation earlier in my office, and you said it was difficult to determine the safety of the device because of proprietary reasons. would i be accurate in assuming that you can't be assured 100% assured not knowing what the necessary changes were made in these air bags? >> senator heller, we are not chemical propellant experts as

honda there are -- there is proprietary technology involved. there have been improvements made by takata as time has gone on. for example, there is differences in the shape of the propellant wafer. to me, i'm not an engineer. to me as a lay person it makes sense that that different shape may result in better manufacturing process. but respectfully, senator, i would defer questions about the intellectual property and the proprietary aspects of the chemistry to takata. >> thank you. mr. chairman, my time has run out. but i think i represent every parent across america concerned with their young adults in the cars that they are driving today as to whether or not they have an air bag sitting in front of them today that may cause severe injuries as we have heard in testimony today and even death. so, thank you. >> senator heller let the record show that the pauses that occurred

to your two direct questions to the two gentlemen, that those pauses i can say for this senator were painful. and perhaps on the basis of mr. shostik's response you had better tell your daughter not to drive south in her honda. senator marky. >> thank you, mr. chairman, very much. in the audience today is kim. kim is sitting right over here. her sister was killed in arizona in november of 2003 sitting in the passenger side of a subaru model that contained defective takata air bags but that subaru model has only been recalled in humid states which arizona certainly is not.

my first question to you is, would you first of all right now given your testimony, agree with the position that nhtsa has taken recalling -- that you have said so far that takata strongly agrees with the position stated by nhtsa that the recalls be limited to the so-called humid states. but on tuesday, nhtsa finally changed its position and called for a nationwide recall of all impacted driver's side takata air bags. does takata support nhtsa's new nationwide recall? >> i understand nhtsa saying

to change this from a regional recall to a national recall. the reason behind is i understand is one incident that happened in north carolina. >> but do you agree or disagree with nhtsa's call for a nationwide recall? >> senator, it's hard for me to answer yes or no. so if you allow me to -- >> it is not hard for you to answer yes or no. do you support the nationwide recall of air bags that the department of transportation has issued? yes or no? >> again, senator, if -- i did find the technical data to -- from any incident to support nhtsa's new directions, and then

we worked with nhtsa and auto makers to take care of the issues. >> i'm going to take that as a no, you do not agree with the decision by nhtsa and i just think you're plain wrong here and i think it is very disturbing i think to any american family who has a vehicle with takata air bags to think that's your position today after all that we have learned. i think your company is making a big mistake in not supporting this recall whole heartedly. now, let me move on, if i can. kim's sister was killed with a passenger's side back. and i think that there is kind of a roulette like quality to this, hoping that the air bag that was installed in people's cars was on the driver's side. that's now being recalled but

not the passenger's side. i don't think that's right. i don't think anyone should have to worry that any of their family members are in danger. kim has lost her sister forever. does honda support a recall of passenger's side bags as well given what we now know about the ticking time bombs that each one of these air bags potentially is as a risk to american families? >> senator markey, there are two confirmed air bag ruptures, passenger air bag inflator ruptures in honda vehicles. we have not experienced any injuries. they are part of the sic or improvement campaign. we have actually recalled in i believe it's ten states passenger air bags. we are actively working on that right now. again, those are concentrated in the -- >> do you support passenger side

recalls that would be the equivalent of the driver's side recalls for these air bags? >> we support passenger -- we have ongoing a passenger side air bag recall and for us -- the key is to understand what the technical information is -- >> do you support not a voluntary or geographic recall but a nationwide recall of passenger side bags, yes or no? >> as to a national recall, we have not refused. we're actively considering that senator markey. right now our priority -- >> right now to that. do you support a nationwide recall? not voluntary, not geographic, nationwide? do you support it yes or no? >> respectfully, senator, i want to point out that the answer to this question obviously is one that we interact with nhtsa on and make decisions quickly

based on the data. i haven't received that specific request but i would respond quickly using our rigorous internal process to make that decision in a five-day period. >> look at, these air bags are the same whether they hurt the lieutenant or they killed kim's sister. they're the same. and they should be recalled. and each of you should be today saying that you support that whole heartly. thank you, mr. chairman. >> thank you, senator. thank you for making it so direct. yes or no. just like senator heller did as well. senator blumenthal. >> thanks, mr. chairman. you know, i know that you are here in good faith so i hope you won't take anything i am going to say personally. but it strikes me that these air bags failed but the system

failed equally if not more. and first of all, i want to join senator marky in his calling for a national recall of all cars with these air bags on the passenger as well as the driver's side. we made that point previously, he and i. i'm also calling on the secretary of transportation to immediately accelerate the replacement process looking forward. at the current rate of production by takata of 300,000 air bags a month, there is no way that there are going to be sufficient products available. so i ask you, will you cooperate in an accelerated replacement process so that competitors of takata will be called upon to supply those products instead of takata?

to each of the -- our two witnesses. >> i can start. obviously i mentioned again that we have an obligation to our customers. accelerating the production of parts and getting this process done quicker is directly -- >> so that's a yes. >> i agree. >> so will you take nontakata parts to replace those air bags? >> senator, we want to get these cars fixed. the safety of our customers is the highest priority. all options are on the table. we would look at every option. >> i'm going to ask the secretary of transportation to order that you do so but i hope you will cooperate. when i say the system failed, we are here because of delay, nondisclosure, as well as

potential deception and concealment. in fact both of your companies , entered into settlements that were deliberatively and purposefully consealed in court orders. damian fernandez in florida, ashley parhum, the first in 2006, in oklahoma city in 2009. jennifer griffin, orange county, florida, in 2009. gerget wrathmor, 2009. christie williams in georgia 2010. the first was driving a chrysler, the others were driving a honda. your company settled with them. if that information had been made public, more people would know about this deadly defective air bag and fewer people would have been killed. do you agree?

>> respectfully, i would highlight that that incident did occur in the fall of 2013. i highlighted it in my opening statement. and while it's our policy when we enter into confidential , the existences of that incident was not concealed in any way. it was -- >> but the details were and the devil and the death was in the details here. don't you agree? >> i would ask for a definition of details respectfully. >> well, the details of how and why and what the role of the air bags was in that crash. do you agree? and let me ask both of you will your companies commit to declining from now on to enter into these kinds of secret settlements? and concealing the facts

surrounding crashes that result from the vector products? products. ? >> senator, two of the cases that you site with ms. parham and with ms. wrathmor we provided information about those inflater ruptures to nhtsa. we have talked about them to takata. >> but not to the public. you -- your company deliberatively consealed the facts that otherwise would have been known to the public as a result of this court action. >> i respectfully disagree. ms. wrathmor's case was reported in the tread material. i understand your point that ms. parham's was not. but we were in talking to nhtsa 16 days after that tread report was due giving them all the information we had about inflaters. with respect to confidential settlements, our legal system

recognizes confidential settlements so we do not intend to hide behind settlements. the information that comes out during lawsuits should be available to nhtsa and as appropriate we could support the principle of others as well. >> i want to show you some standards that are used in testing american cars. these are standards used to test. they are specifically required by american law to test. were those standards used prior to the sending of those air bags to these american companies? >> i'm not familiar with this but i'm sure someone in our company knows about it.

>> but you don't know whether those standards were used? >> not in detail. >> well, i would like to get an answer from you in writing after this hearing that these standards -- they're u.s. car 24 standards. they apply to the substances used in the air bag, the sealing of those air bags to protect them from moisture. you're unable to provide this committee an assurance that those standards were used and applied. i want to know from someone in your company under oath whether those standards were applied to every air bag design -- in other words if the designs were changed over years -- and whether they were tested with

those standards, when there were reports of defects. >> senator, yes, if you allow me i will talk to our responsible engineers and then as i get back to the committee about the response. if it is so acceptable. >> thank you. and let me just conclude, i hope that your companies will join in supporting the legislation that i have introduced, sunshine in litigation legislation that would prevent these kinds of settlements that contributed to the problem the courts ought not to be complicit and i hope that your companies will cooperate and join in supporting this kind of legislation. thank you. thank you, mr. chairman. >> thank you. senator mccaskle. >> thank you. is your company the only company that uses amonium nitrate? that manufacturers air bags? >> senator, i don't know in

details what kind of materials exactly our competitors are using. but heard that some of the competitors are also using a similar kinds of materials. >> well, the information we have is that there's four or five companies that make air bags and that your company is the only one that is using amonium nitrate. let me ask you this question. are you still using amonium nitrate in the manufacture of your air bags? >> yes, senator. >> ok, well, that's worrisome to me. and let me now move to chrysler and honda. i'm confused -- and i guarantee if i'm confused your customers are confused. the letter that chrysler sent to nhtsa on june 20, 2014, i would like these three letters to be made part of the record, mr. chairman, if we could. >> without objection. >> listen to this paragraph. although chrysler has not at this time made a determination of a defect in the subject air bag

inflators, it is chrysler's intention to condult a field action to replace the driver air bag inflators between -- dadadadada. as well as the passenger inflators so i'm guessing a lawyer wrote that paragraph because then i have a letter from honda that says we determine the potential defect relating to motor vehicle safety exists. that was written in 2008. and then we have another letter from honda in 2014 saying we decided to conduct a safety improvement campaign. we have not made a determination that a safety defect exists. then you go down the list of the notifications. and i'm going to start in june 2014. we have a service campaign. then a service campaign. then a honda safety recall. and then a mazda service campaign. and then a mitsbishi service

campaign. then a nissan safety recall. then a nissan service campaign. then a nissan safety recall. safety have a subaru recall. then we have a subaru service campaign. do you understand the issue here? what's going on here is a refusal to characterize a problem in a way that is clearly understandable to the consumer. we have been -- had more recalls in the last year-and-a-half in the american car manufacturing than in the history of american car manufacturing probably more in the last year than we've had in many, many years combined. the problem is i don't think that people that are driving these cars understand the risk. because you guys aren't even comfortable with being consistent as to whether or not you're telling nhtsa it's a service campaign or a safety recall. in your mind, other than avoiding litigation and

liability, why would you differentiate between a service call and a safety recall? >> yes, senator. i would like to start by saying it's chrysler's policy that regardless of which way these actions are initiated or how they're characaterized recall or field service campaign, the customer facing information is identical. we filed the same information with nhtsa and the mailings that go to our customers are the same. >> so do the mailings say this is a safety recall and you are in danger and you need to get this car in? or does it say this is a notice that this part has been recalled? without any emphasis on safety? >> it's my understanding it does characaterize it as a safety concern. yes. >> well, i would like to see for all of those ones that involved your companies, all the service campaign versus safety recall -- i would like to see the notices that went to your drivers. i would like to see the language of those. and if in fact the language is the same going to the drivers

why is the language different to nhtsa? >> i guess the characterization -- in terms of how we characaterize these events, again, chrysler is agreeing to do this with one incident and the lack of understanding of root cause. i know this will sound like engineering terminology. but the thing that is still open in this instance with these beta inflators is the absence of a defined root cause. in the absence of a defined root cause, it makes the next steps difficult in terms of what to do. i think this is a nuance of definition as to why you see these characaterized this way. >> do you say the same? is the reason that there's a difference in characterization is -- is your notification to drivers identical as to whether or not it's a service campaign or a safety recall? >> senator, i think -- there is confusion here. and the regulatory framework that we're operating under has certain terms that are part of that regulatory framework that

we are using. i'm not an engineer. i've asked the very same question you've asked what's the practical difference for the customer. ? and i've been told none. they need to bring their car in. now, behind in terms of how we're looking for evidence of risk and so forth that should be the manufacture's responsibility working with suppliers and working with nhtsa. but, senator, i would support if we could make this clearer for consumers honda is happy to work with -- >> are you sending the same notification to your drivers whether or not it's a safety recall or whether or not it's a service campaign? >> senator, i would like to double check but i believe they're very similar notifications whether it's a service campaign or a safety recall. our interest is to tell that custmer to please come, please call, please come to a dealership, please get the part replaced. whether that replacement is for the purpose of an identified defect which is the recall or the purpose of getting more information which is the safety improvement campaign.

i think we should help the consumer by not having it be so unclear to them. >> well, i'll tell you what if i get a letter saying we're investigating something would you bring your car in to help us, i'm busy? if i get a letter saying if you drive this you could have a piece of shrapnel embedded in your eye if your daughter isn't sitting in the seat next to you she could be blinded or die, that's different than we're checking out an investigation. i think that too many lawyers are in -- we found this in gm. as you all know you had have to have followed it closely. there were lawyers that are trying to avoid litigation. there were not lawyers that were trying to make sure every consumer knew the danger. and we have got to get out of this defensive crouch about liability litigation and get into an offensive position about making sure drivers are safe. and until your companies decide to do that, until nhtsa is a more able and aggressive partner

in that, consumers are going to be in the dark. i mean, the exchange between senator heller about whether or not his daughter was safe was incredible. he is a united states senator and he is asking somebody in charge of the company that made his daughter's car whether it is safe for her to drive it and it is clear you weren't sure how to answer it. that's a problem. we've got a problem. so we're going to keep having these hearings and we're going to try to keep working on legislation and we're going to keep yelling at nhtsa until we get this right for the driving public. this is unacceptable. thank you. >> thank you, senator. senator cantwell. >> thank you, mr. chairman. and i would like to follow up on a couple of points my colleagues have made and i share their frustration and angst over this situation when there's such a pause or it's we're just doing what nhtsa says. i think today's hearing is a

very good opportunity for us to discuss what are the changes to be made. not what nhtsa requires today but now that we're here what do we need to improve the situation. but first i want to follow up on this air bag recall situation as it relates to the passenger's side. so i wanted to ask you mr. shim if we actually -- would you be able to meet demand if it was for all the passenger's side air bags? would you be able to meet that demand? or do we need the secretary to help and expediting this with other manufacturers? i heard mr. shosteck say if that's -- it was to -- to senator blumenthal's question there was a little bit i read hesitency into that. we'll see what nhtsa says. so i'm asking you now can you immediately that demand on the passenger side bags? if not let's get to the bottom line here. >> we [inaudible]

the replacement kit which is in the beginning of this recall of the air back. the air bag. currently we are producing 300,000 kits per month and in total. then we understand we have to speed up preparing for replacement kits. so we have added two more lines in january and then it's -- we also committed in the beginning and we are going to do as we did and as the supply ability to have the replacement part goes to 450,000 kits. also, we do -- we have four inflater plants globally and then the plant in mexico is mainly producing the inflater for replacement. but they are running at full capacity right now.

so we found out the german plant has extra capacity so we decided to move some of the products from mexico to germany to to mexicoe capacity so they can generate more deflaters for the replacement kits. >> so you're saying you have capacity and the secretary doesn't need to take action? it shouldn't be a mystery here. we should be clear whether we need more capacity by other suppliers or not. >> we need -- we understand that we have to speed up the replacement kit. we increase to 450,000 maybe still not speedy enough. we are discussing with automakers and any other option we can take to speed up the replacement.

in answering your questions, i'm not sure the things that they can -- >> maybe i will ask the other two. do you think that we need to have the secretary take action? yes or no? >> at the present time we have enough supply for the demand. but the demand could change based on future actions. so i'm not in a position to judge takata's ultimate capacity here. for us all options should be on the table to get parts replaced in customer vehicles.

>> ok. i have about a minute left and i want to get to another point but i'm going to follow up on this with each of you and with the secretary. but why are we not here today to discussing why not make manufacturers responsible for 100% recall success? the gaps that i see -- i mean first i don't see an email system here, i don't see an amber alert and yet we have people who are dying and we're hiding behind, well, we had an agreement and we did a settlement. and then in the settlement nobody really knew what was going on. my understanding is germany has more like 100% recall success. we have a gap here with people who are second purchasers not knowing because you're communicating with first is my understanding first buyers. so why not just say that you're responsible for getting 100% recall? the cars are yours. they're out there in the public. there's lots of tools we can use. but why not set a better goal than what we have? >> well, 100% would be what we want to achieve, too. a and that's what we're trying to achieve right now. we are trying different methods. we haven't got 100%. i think and especially in older

vehicle populations we are -- we've been unable to achieve 100%. i don't know and i don't know you the average recall a completion rate. i'm -- i believe but i want to check further. i believe it's about 60, 70, 80%. to me that's not good enough. >> and my understanding is that germany is getting 100%. a and germany and where i me ande you and will and will

>> and what i would just submit, senator, in my full written opening statement we talk about that. germany to my understanding has a process whereby if a car -- before a car can get registered it needs to be checked if there's any outstanding recalls similar to in some states in the united states an emission certificate preseeds registration. please don't misunderstand, honda is going to take -- use any new tools on innovative tools to find customers and get these recalls done. that's what we want to have happen. but there could be some support on a state level or -- for recommendations such as that. >> the more the manufacturers can talk about not what nhtsa does and requires today what you would like to see the better it will be. thank you, mr. chairman. >> senator rubio. >> thank you, mr. chairman. this question is to all three of the companies involved. can you guarantee us here today that no one driving one of these vehicles outside of the territories currently covered -- florida, hawaii, puerto rico, the u.s. virgin islands, the places with high humidity. if you were driving one of these vehicles with one of these devices in it outside of those

territories can you guarantee us that no one will be injured by this device and the way we've seen in other places? >> maybe i will start. as i mentioned in the opening statement, the country -- all issues from the past incidents or problems is already addressed and taken care of. according to my understand, i believe that products we are producting right now including the replacement kits and produced under well-controlled processes and should work as designed as safe. regarding regional recall you mentioned for the states, for the high humidity areas, according our records these areas, due to the high humidity environment --

>> i understand. i don't mean to cut you off. i have limited timed. my question is straightforward. if you have one of these cars and you spent the entire time in north dakota or south dakota or wisconsin, not one of these places, can you tell us here today that you are confident that no one will be injured in the way we saw for example in florida? >> if not currently covered by recall, i believe a product in the car works as designed and safe as i said before. >> so we're never going to read about a story of someone outside of these areas covered by the recall that have been injured in the same way that we saw, for example, in florida? is that your testimony? >> according to my knowledge, again, it is i believe -- i believe these cards are to be safe. >> what about the other companies? >> senator rubio, we have recalls outstanding that are connected to takata manufacturing issues. we did these recalls 2008-2011. they had no geographic limit. those are uncompleted recalls. and i was just discussing with senator our struggles

to get those completeed. those customers we want them to come in. there's risk there. we want those customers to come in. we want to get to 100%. >> my question is people not covered by the recall for various reasons. you're talking about the recalls that have nothing to do with geographic limits. i'm talking about the ones that do. maybe not specific to your company. if your car is not currently covered under the existing recall, you have nothing to worry about? >> we have identified higher risks, sir, in the humid areas and that's -- we're still working to gather more information about

those vehicles both there and in nonhumid states. >> senator, i would characaterize in my opening statement i characaterize this situation as an ongoing investigation and at least once during the testimony i reiterated that in the absence of defined root cause for the beta population of vehicles, i think we would find it difficult to guarantee 100% as to the risk outside of the geographic regions identified. i believe the test data and the incidents confirmed those areas are of high risk and utmost importance to deal with those first. but with the open status of the root cause. i could not affirm your question. >> the best of the knowledge to the minute i have left, did any of your companies at any time calculate that the cost of the conducting the recall outweighed the benefits of alerting

consumers and thfer decided not to move forward with some of this earlier in the process? in other words was there ever a calculation was made that it would cost so much financially to deal with this that we're better off not doing anything about it because the safety risks don't justify it? did that calculation ever happen at any of the three companies? >> i can confidently say that's not the case at chrysler. >> to my knowledge no, sir. >> that's not the case. >> if i am driveing one of these cars now and i don't live in one of the states covered or areas or products covered by the recall because of where they're geographically located what should i do? go on about my life and not worry about it? >> again, we've, we don't we see the risk much higher in the humid states. and it's an open as to what is the cause. that's what all of us are trying to get to right now with regard to these regional, this regional sic. >> senator rubio, i would say for the chrysler vehicles not covered by the recall, i would drive them myself. >> senator rubio, they see the

risk much higher in the humid states. but associated press reported on november 17th that honda had quietly decided to replace impacted taakata air bags nationwide rather than just in hot and humid states. and so they also indicated in those reports that honda had no intention of actually notifying customers in other states about the remedy. instead, as stated, they would have to go to their dealer. so, why did honda believe it was appropriate to provide a remedy but not tell anybody? >> right. chairman nelson, this is not a secret or quiet policy. it's on the nitsa website and it's there because we put it there. this was a communication to our dealers. our dealers are asking the same kind of questions that senator rubio had.

and when we want to deal with our customers' needs in the nonhumid areas, on an individual basis. if we find a customer that has a concern, we are asking our dealers to take care of that customer and replace that air bag. understanding that we believe the repairs are more priority in the humid areas. but we have an approach to our customers that we want to provide customer service. it's not secret, we didn't mean it to be quiet. we wanted to tell our dealers, if our customer comes in with a concern, please respond to that concern. >> so a dealer in senator thune's state or senator klobuchar's state, but we're a mobile society. and there are people in massachusetts and minnesota and south dakota that drives south

and come to florida during all times of the year. when the kids are out of school, they come also in the heat of the summer. isn't something missing here? >> we are looking -- we're doing our best to collect that information, sir. >> mr. shimasu, this morning's "new york times" says, quote, two former taakata engineers said they and other employees had concerns over switching to a risky compound.

they're talking about the ammonium nitrate from the previous compound. quote, it's a basic design flaw that predisposes this propellant to break apart and therefore risk catastrophic failure in an inflater, said mark lily, a former senior engineer with taakata at the propellant plant in moses lake, washington. mr. lily recently shared his concerns with our senate staff members. quote, it was a question that came up. ammonium nitrate propellant, won't that blow up? said michael britain, a chemical engineer who worked with mr. lily at the moses lake plant. the answer was, not if it stays in the right phase. all right.

now, in addition, the media reported various problems at the plant in hiroshi shimizu 2001. and secret air bag tests in 2004 2004, so why didn't taakata take action on any of these kind of concerns regarding the use of ammonium nitrate? >> let me briefly explain about aluminum nitrate. aluminum nitrate is, as i said at the beginning, advantage to use it and it's a benefit to the users also and users also.

but it's because -- it's chemical properties. their sensitivity to moisture is well-known. at the moisture is not well -- if the moisture is , they don'ttrolled perform as designed. and because that may influence the combustion characteristic. and that's well known in the industry. but talking about phase of this thing, it's going to manage the aluminum nitrate is staying stable and it's during the processes, and also the environment. in my understanding, if in other

words, we produce and the control -- moisture control environment, that will be stable -- [indiscernible] in process in some occasion, we have some that appear as we did in the past. >> i did not interrupt you, an opportunity to answer the question. that doesn't answer the question. if, in fact, you knew about it as far back as 2001 and they were doing secret air bag tests with ammonium nitrate in 2004

and you have your own engineers as quoted in today's "new york times" saying what they said that ammonium nitrate was the problem, then -- senators, any questions in a second round? >> may i ask a question? >> please. >> until two days ago, most of the recent actions taken related to defective driver side air bags were limited to so-called humid states. but 3 of the 4 deaths that were caused by exploding air bags in honda's cars occurred in oklahoma, virginia and california. not the humid states that this recall applied to. as the chairman was just referring to. south dakota, minnesota, massachusetts, could have been in that category. when my staff asked nitsa about these deaths, they were told that the vehicles involved had been recalled for a different

air bag manufacturing problem years ago. but that they had not been repaired. there is just one problem with the explanation. when my staff put the vehicle i.d. number of two cars involved in 2013 and 2014 fatalities through honda's recall data base, the database says these cars' air bags were repaired some time after 2011. either, one, your recall database is wrong. two, the defective air bag was replaced with another defective air bag. or three, the driver received a brand new air bag some time after 2011 and the air bag still killed someone just a few years later. which of those three options is it? >> senator, i believe it's option one. that our website is -- has deficiencies. when we have multiple recalls that involve the same vehicle,

our system was bringing up a message of recall completed for the ones that were superceded, if you will. it's our problem, sir, which is being fixed. we are due to report tomorrow about that. it is an embarrassing problem in this day in age that we have that technology problem on our website. >> all right. so this goes back to the senator's question and others about the safety of families driving these vehicles. what you're telling me is that someone buying a used honda today could look up the car they want to buy on your recall data base, be told that a repair needed to fix a fatal safety defect was completed, even though it was not. and i think, again, that just goes to the whole question of whether or not the public should feel confident that they have a family member driving these vehicles. >> sir, i agree with you.

that could happen today. i'm bound and determined to check and make sure it can't happen tomorrow and it won't happen again. >> and i'll just say, again, mr. chairman, i don't think it makes any sense for a passenger air bag aside recall to occur. otherwise, they'd be in the backseat because they're just really running a huge risk. given the fact the very same air bags that deployed and ready to hit dangerously a passenger. >> and, gentlemen, you need to know that i'm going to be meeting with secretary fox. i'm going to request of him that he impose the maximum penalty allowed by law. even if that's $1 million a day.

on the automobile companies, if you're not providing a loaner or rental car to the folks who potentially would be driving a death trap. as simple as that. senators, we need to move on to the next person. >> what is the maximum number of replacement parts you'll be able to provide per month? >> currently, it's all provided from mexico for american market. 300,000 per month at this moment. but it will be increased to 450,000 a month from january. >> 450,000 per month. that is the maximum. >> that's our plan right now. >> and one more question. what steps have you taken to improve the assembly of the

inflater, the container that senator nelson showed you? what steps have you taken to make the inflater more leak proof and waterproof? in other words, more resistant to water coming into it or humidity. >> a couple step -- couple step already we have taken to improve the problems, improve the robustness. and we are discussing with our car makers the current product as i said, it's safe from -- if they came out from well-managed processes. but ways to improve the robustness against the humidity.

we will continue to discuss about how we can improve the robustness from now. >> thank you, mr. chairman. >> thank you, senator. >> ok, gentlemen, thank you for your participation today. we'll call up mr. david friedman of the deputy administrator of the national highway traffic safety administration, nitsa. >> where is he? >> where is mr. friedman?

welcome, mr. friedman. have you heard the testimony in the anteroom? >> i have. >> what we're going to do is forego the statement because of the lateness of the hour. we'll have our senators and you can make your point in response to the questions. i'll defer my questions and do cleanup at the end.

>> thank you, mr. chairman. mr. friedman, another apparent fail in the auto industry. and these issues with the faulty air bags are the latest in the long line of recalls the focus of multiple hearings held by this committee and the house of representatives this year. >> i was wondering if you could shed some light on why we're seeing such a flood of safety issues recently. and do you believe this recent experience indicates a broad and systemic problem within the industry? >> senator, one of the reasons why ranking member, one of the reasons why i think we're seeing the increase in recall is because the auto industry is running scared. the auto industry realizes, one, that nitsa has been pushing them hard to establish a new normal. where we expect them to recall vehicles quickly, to notify us quickly, and to find the problems quickly.

i think they're also very concerned about and as they should be about the actions that congress has taken to shed a light on serious problems in the auto industry. and i think they're also reacting to the media attention that has been observed. they're cleaning out their closet, and it's truly a shame the fact it took all of this attention for them to do so. i asked 12 major auto makers. i called them to way washington to talk to them about the need for a new normal when it comes to recalls. no more hiding information. no more hiding behind attorney/client privilege. no more waiting to prove beyond a shadow of a doubt there's a problem. no more fighting us when we have clear evidence of defects. they need to act much more quickly.

we've over $160 million in fines. >> in 2010, the examination into the scope and timeliness of honda radicals involving driver side air bags citing and, i quote, insufficient information to suggest that honda failed to make timely decisions on information it was provided, end quote. what was the insufficient information at issue and knowing what you know now should the agency have kept that inquiry open? >> senator, we're just beginning to look into the details of what happened at that time. i expect to be able to provide you more details on that going forward. my understanding, my current understanding is that we understood that taakata had identified the batches involved with the manufacturing problems. it's been made clear to us they do not have good quality control and does not have good recordkeeping because further down the road, they had to

update indicating they had not provided us with that information. that is one of the key reasons we are demanding under oath they provide us answers about all of these recalls, all of the tests they've done on air bags. we will pore through that. and if they failed to live up to the law. we will hold them accountable. i would say, though. one of the things we would like to see is an increase in our ability to hold them accountable. right now, we're limited to just $35 million for any single infraction. frankly, for too many of these companies, that's pocket change. the secretary and president have asked for that to be increased to $300 million, and if you give us that authority, we'll use it aggressively. >> it was their failure to

disclose to you that the information that could have shed an additional light on this and you closed the inquiry because you thought you satisfied all the questions you had. but that was a failure on their part to provide information. >> you have not had a chance to look at it, but we are introducing legislation that uncovers serious allegations of vehicle defects or noncompliance with motor safety laws to blow the whistle and provide information to government regulators, but if that information leads to enforcement actions where more than $1 million in monetary sanctions is involved, that whistleblower could receive up to 30% of that. is that a concept that you could support? >> senator, we welcome every bit

of evidence, every bit of information that can help lead us to root out any of these problems. i look forward to reading your legislation, i look forward to evaluating. one of the things i think would be crucial in general, but also with such a proposal is to ensure we have the resources, the people and the dollars to follow up on those leads. this year alone, over 70,000 consumer complaints. these are critical to us finding finding -- finding these problems. we get 6,000 reports a year from the auto industry. we need more people to be able to follow up on all that information. >> thank you, mr. chairman. my time's expired. thanks. >> i agree with you, mr. friedman. you do need more resources. and thanks to senator thune for being willing to push forward on this question on the whistleblowers. senator klobuchar. >> thank you very much, senator nelson.

first of all, i think you maybe heard me talk about the victim in our state who is permanently blinded from the north oaks, minnesota, she was driving her bmw in 2013, it was a 2002 model. and this is sad because it'd been going on for so long. the "new york times" report about the secret task in 2004 -- test in 2004 and now here you are in 2013. mr. friedman, according to the family, they never received confirmation that from this so their case was being reviewed. i don't know what actions, follow-up actions, the family itself filed something in 2013. and you know if anything ever reviewed the complaint that was filed by the family and what happened. >> we're looking into this as we speak. i know your staff is alerted to us just this week.

but we put eyes on every single complaint that comes through nitsa, that comes through our website, our hotline that people mail in. we put eyes on all of them and follow up and we try to piece together the information that provides. i'll look further into this to tell you exactly what happened with this. >> ok. obviously this complaint was filed after it happened. given all the recalls have trickled out, might have helped someone else. and then going back in time, nitsa's call this week, now we're into this week for a recall that expanded beyond the regional recall finally got at people in minnesota who might be actually snow birds, believe it or not, some of them abandoned our state in the winter. and they actually spend their winter months in southern states and their vehicles, then, they drive down there and drive back. their vehicles are exposed for an extended amount of time to

high humidity. and they were not included in the previous regional recalls. and you didn't think there was a need to include those type of vehicles. what changed? >> this is indicating the dew point temperature, an indication of the total amount of water in the air. all the initial incidents that caused us to open this investigation. -- occurred in these regions you see in brown. all the initial incidents that caused us to open this investigation. we started with three complaints. we acted rapidly based on those three complaints. we connected the dots. all three, there were three different car companies. all three had air bags from taakata. we connected those dots, as well, these were all in humid regions.

we opened an investigation and got the auto industry to begin recalling vehicles in days. so we acted aggressively in this case based on the information we had at the time. now, we -- because we didn't want to see anyone else hurt from these problems, part of what we did is we pushed the auto industry. we can't wait for another one of these incidents. you need to get out there and work with taakata, test air bags returned so we can figure out, is this a broader problem. we can't sit here. now, if -- as we did that, as we tried to gather that test data, we were also monitoring field incidents. initially what we were working with.

five incidents that were all in florida. reinforcing the concept that this was a problem related to exposure to high temperatures and high humidity. high, medium, dew point temperatures. >> were they all in part of the southern part of the united states? >> it was only these. >> then they got -- >> then, an incident happened in california. at that point, that could, could have been an outlier. >> uh-huh. >> then, at the end of last month, we received a complaint from an incident in north carolina. >> uh-huh. >> we acted quickly. we reached out to the consumer. we verified that it was, in fact, an air bag rupture. the pattern is now clearly broken for the driver side air bags. >> ok. >> while all the incidents

initially were around here, now we have an incident here and here. >> right. >> areas of much lower temperature and humidity. >> ok. >> based on that information, we called on taakata and all the auto makers involved with driver side air bags to recall those vehicles. >> the types of cars. so this is an issue for the family a bmw car. bmw told nitsa it was aware of the air bags under honda's recall but taakata told them that bmw vehicles were not affected. did they base this on taakata's information? >> i believe that's accurate. one of the things, frankly, that needs to change and needs to be more effective is suppliers and automakers need to do a better job of sharing incidents, especially when you have a common supplier.

right now, all too often, automakers keep their incident data to themselves. >> can they legally share that information? >> well, this is one of the things when i called to washington that i began discussing with them is we've got to figure out a way without violating antitrust laws that they can share critical safety information. there should be no barriers. >> agreed. >> and we also talked about suppliers. i was talking to them about taakata at the time because both in the gm case and the case, part of the concerns are communications between the auto industry and the suppliers. that has to get better. >> got it. all right. maybe there's something we can work on.

thank you. >> senator markey. by the way, of course your written testimony will be a part of the written record. >> thank you, mr. chairman. >> senator markey. >> thank you very much. >> how can you justify calling for a mandatory nationwide recall with taakata driver side air bags while continuing to allow patchwork of voluntary or regional recalls for the passenger side air bags? >> senator, two things, first of all, these regional recalls are not voluntary, period. i have in my hand the same letters that each of the car companies are sending to all the affected consumers. this important safety recall notice from honda. i was frustrated on them calling this a service campaign. this is a recall. they also very clearly state honda has decided -- >> why are you not making the same recall of passenger side air bags? >> that's based on the data.

if we could switch to the test charts. because we didn't want to be in a position of waiting for another rupture. we pushed the auto industry and taakata to test all over the country. >> can i just ask you to do this? kim is sitting over here. her sister died in a passenger side air bag accident. what do you tell kim and her family about her sister? and everyone else's sister now sitting in the same passenger seat in vehicles across the country given the fact that kim has lost her sister. her sister was driving a subaru in a nonhumid state.

why not issue that same recall order as a result? for every passenger side air bag, as well? >> what i say to you, this is the first i've heard of your accident. please, get us the details of what happened. i want to know what happened to your sister. it's an utter tragedy, clearly, what happened to your sister. if we can get information from you on what happened so we can determine if this was an air bag rupture outside of though -- those regions, you could help other americans protect themselves. we will always follow the data. we will always follow the information. that's why we pushed the automakers to test it. the challenge we face, senator is if without information, the safety act requires us to act based on information about unreasonable risk. if i have no information about an unreasonable risk outside of those areas, then i'm not able to force the automakers to recall outside those areas.

in a situation, look -- >> no -- [indiscernible] >> the limited air bag supply. what you're potentially doing, senator, if i did another recall without the data is putting someone's life at risk. >> her sister was in arizona, ok. goes up to 110, 120 degrees in arizona. that car can be driven over to southern california, driven over to texas, could be driven to florida. you don't know what any of these family members are going to be doing. it could be a used car. it just seems to me that you as the agency chief should err on the side of safety knowing these vehicles move from state to state. as the senator said, the chairman said, people are going to florida from pretty much every state in order to escape

the cold in the winter, in order to visit disney world, and we know that. an accident could happen. and so why don't we just recognize the mobile nature of our society, the danger that each person runs, and by the way, i don't accept the fact there is no risk in really warm weather in arizona or other states. because we have other states here that are outside the humid area that have had these incidents. i just don't know why you don't say to all these families who have already lost people that the least that's going to happen is no other family member of any other family in america is going to suffer the same thing. >> senator, that is my solemn goal in doing all of our efforts. to put safety first. if we have evidence that indicates this should be a national recall, we'll do that. right now the challenge, senator is, what you're asking me to do based without information is to put someone's life at risk in florida based on a lack of

information elsewhere in a situation where air bag supplies are limited. >> they're not even saying they support your recall right now. how can you trust a company-- and the answer as to whether or not they support, they can't give an affirmative answer to that. that is a frightening answer from a company who is responsible for ensuring that all information about the danger of these air bags is made public. you should just err on the side of safety. finally, if i can, toyota believes the passenger side air bags are so dangerous that the whole deal is to disable them and to warn passengers not to sit in the passenger seats.

you think toyota was right to warn the dealers and vehicle owners in that manner? >> the median timed failure is ten years. if you're coming in and out of these states or in them for only a short period of time, the data does not indicate you're facing the same risk as someone who lived there. further -- >> answer the toyota question before my time runs out. >> senator, you can drive a vehicle without someone in the passenger seat. but even if you drive a vehicle without someone in the passenger seat, if that air bag ruptures, that driver is in danger. therefore disabling an air bag and putting a label on that vehicle saying do not put anyone in this passenger seat is a way to protect the driver from a dangerous air bag. >> so you approved toyota's plan to do that? >> senator, it's not a question of approval.

these are defective parts and therefore they are broken parts. >> well, if you did approve that plan, why didn't you tell other manufacturers to issue the same warning? >> senator, as i said, we did not approve this one way or another. these are broken parts. and manufacturers are allowed to disconnect broken parts. >> this letter serves to acknowledge toyota motor engineering notification to the national highway traffic safety administration of a safety recall which will be conducted pursuant to federal law for the products listed below. and the product that we are referring to is the air bag that is in discussion. and it says it will disable the front passenger air bag and advise the customer not to use the front passenger inflater is installed.

-- until a replacement inflater is installed. >> that's our letter acknowledging. >> again, if that's the case, why not have a similar letter from every other manufacturer. to warn people of a potential air bag catastrophe. >> we do not approve remedies. that is us acknowledging to them what they told us. that is our way of holding them to the decisions they've made. it is not our letter telling them what to do. it is us acknowledging their steps. it says to me you're seeing yourself as a detached processor of a decision made by a manufacturer of vehicles,

toyota. that has tremendous implications for the other vehicle. that it has the same kind of air bag of catastrophic consequence. i don't understand how you can process something like this. agree with this, essentially, hold the manufacturer to the implementation of it and not simultaneously be saying this is the warning bell going off if toyota believes this is so dangerous that the other manufacturers, as well, should have the same responsibility to make sure those air bags are recalled. so i just say to you, mr. friedman, that from my perspective, there's a higher responsibility that as an agency we have to call you to. and i thank you, mr. chairman. >> and you will acknowledge because you heard the testimony today that each of these automobile manufacturers are handling the recalls in a different way, which is all the more, adding confusion.

you heard chrysler say they're not going to start until the middle of december. and you got to have concerns about whether these automakers are responding appropriately. >> i have serious concerns. we have actually had to push chrysler before in previous cases to accelerate the production of parts to get notices out to consumers. i don't accept after hearing what they said. i don't accept that there's any reason why they should wait to notify consumers about these recalls until they have the parts. consumers need to know there is a risk in chrysler vehicles because of these air bags. >> do you have under law the ability to find them if they don't respond quickly? -- fine them if they don't respond quickly to replace these defective air bags? >> we have authority under law to require an accelerated remedy. if we determine they have tools they could be putting into place

to provide a remedy more quickly than they currently are, yes, we can require them to act. we are currently in the process to ask and determine that exact question. we've already, of course, taakata to increase the production to about 500,000 units a month. >> do you have the legal authority to fine them on a daily basis if, in fact, they are not replacing the air bags? >> if we find they could be doing more and are failing to do so, absolutely, we can order them to accelerate the remedy. if they don't do it, we can find -- fine them. >> you ought to start sticking it to the manufacturers with a severe financial penalty. >> senator, my understanding of the safety act is it requires us to -- before we can do that,

that it requires us to be able to demonstrate they could be doing more than they could. we started from the beginning digging in, trying to understand, we're contacting other suppliers and trying to get them to be able to supply more air bags. >> i don't want to beat up on you, but if you could meet corey murdoch from central florida, the father of two little boys, a firefighter who now has no ability because he does not have an eye as a result of a piece of this shrapnel coming in his eye, then it would seem to me that would give you the legal authority to whack it to these people to replace those defective air bags.

senator blumenthal. >> thank you. mr. friedman, thanks for being here today. i -- i take your comments about going after the automobile manufacturers manufacturers. i want to ask you about your responsibility. you heard the head of takata say today that the maximum they can commit to produce are 300,000 replacement parts a month. their hope, their hope is to go to 450,000. they are unwilling to commit to anything more than 300,000 replacement parts a month. which means, it will take three years, and even if they meet the 450,000 goal, they hope, it will take more than two years. isn't that unacceptable? >> absolutely unacceptable.

>> and so, will you commit to use the power that you have under the motor vehicle safety act, section 301.20, as you know, to order that the car manufacturer use replacement parts from other makers of air bags. >> senator, we will use all of our authority to the full extent -- >> i don't want a vague answer. >> senator. >> i want really a yes or no answer. because this is a pretty clear question. i know you'll use all your authority to do the right thing and with public interest, i want to know that you'll recommend to the secretary of transportation that you will order the automobile manufacturers to use replacement parts, even if it means sharing proprietary information with them so they americans are kept safe on the roads for the next 2 to 3 years. >> senator, if i can determine

that can be done safely, absolutely, i will. absolutely. >> how long will it take to make that determination? >> we are in contact with two different air bag suppliers. we are asking them what their capacity is, what their compatibility is. there may need to be tests involved to ensure. because each air bag is tuned for each car that they will be safe. we're hiring an expert in propellants and air bags. we're seeing the contracts with an expert in propellants and air bags. we need to get all of these people involved in making sure. >> well, i understand your testimony has said you've been in communication with other air bag inflater manufacturers to assess the capability those companies have to fill replacement parts. you have the power to order them to break exclusivity agreements, to share proprietary information. i want to know by when you will finish that determination.

>> senator, i will finish that as soon as we can determine if that is safe. i have to put the safety of those replacement air bags first. -- those getting replacement air bags first. i will do so, and we will do so as quickly as humanly possible with the resources congress has provided us. >> mr. friedman, would you agree with me that there's more than sufficient reason to believe that nitsa was not furnished with enough information about these defective products. >> senator, excuse me. i can't prejudge a case. but we have, because of the exact same concerns you have, we have demanded under oath information that will reveal exactly that. these are gut wrenching -- >> well, i know you have asked for this information under oath,

but, you know, when i was a prosecutor, we have something called called probable cause, which is enough to indict. i recognize you don't have criminal authority. you would agree with me that there is pretty close to probable cause here to believe you weren't given the information you need to protect the public. >> senator, i'm not a lawyer, so i don't know the exact meaning of probable cause. but i will say i don't trust that they have provided us with with -- we know that they have not always provided the auto industry with accurate information of all the loss involved. we haven't always gotten the information that we need. we're looking into this. i have serious concerns and will hold them accountable based on the findings. >> so far as the information that's concerned, the maximum penalty now is in the range of $30 million. as you know, senator markey and i and senator nelson our chairman have proposed the accountability act which would

list that $35 million cap -- would eliminate the cap. would you support that legislation? >> senator, we will take all the authority you give us and use it to the full -- >> you support the legislation. >> senator, i -- we want that raised. >> that's a yes? >> the secretary has asked it to be raised. me personally, david friedman, if you give me the authority to do more, i will gladly accept that. >> well, don't you agree as the current acting administrator that $35 million, $300 million may be inadequate for some cases as this one where people have died as a result of failing to report sufficient information. >> there's no doubt that the more, the greatest fines we can levee on the automakers, the greater power we can have to keep them establishing the new normal that we need from them to always provide us with all the information they need and to quickly act on that information,

and to never fight us when we provide them with the data like we are in driver side air bag that these recalls need to happen nationwide. >> my time has expired. but i just want to finish by saying, by making the request that by the beginning of next week you come back to this committee in writing after consulting with secretary about how quickly you will have a determination as to other companies that can provide these replacement parts and whether you will recommend to the secretary, in other words, the time line for finishing that process. and i hope it will be measured in days, not weeks. i know that the secretary of transportation, i've talked to

him on a number of occasions, shares our concerns on this committee, very strongly shares concerns about the american public. and i commend him for not only sharing those concerns but also acting to a point, the administrator, which we welcome. and i would like you to give us a date by which you will make a recommendation as to how replacement parts will be accelerated under 301.20 of the motor vehicle safety act so that americans can be provided with those replacement parts as quickly as possible. otherwise, we will be waiting two to three years the most optimistic estimate, two plus years under the more realistic estimate, three years for americans to be safe on roads on american roads with these air bags in their cars because they can't be replaced if there aren't the parts to replace them.

thank you. >> mr. friedman. i agree with you that you don't have the resources that your little agency needs. and i really feel sorry for your successor who has been named by the president. because as he goes through the confirmation process, there are going to be a lot of questions asked of him with regard to the conduct of your agency on a going forward basis. the amount of vehicles with takata air bags worldwide, senator blumenthal, is something like 100 million. in the u.s., the amount of air bags is something like 30 million. so this could be a problem of gargantuan proportions, that is

going to need the aggressiveness of the federal regulator to try to protect the public. and we appreciate the hot seat that you're on. i'm going to be visiting with your boss who is the secretary of transportation. i'm going to ask him, as i've said earlier, to start socking it to the folks that are dragging their feet not answering questions with the financial penalties. that he has under law. and then we'll try to change the law so as to eliminate that cap. i want to thank everybody for participating. the meeting -- and before i adjourn, let me say that the record will remain open for ten days and all witnesses are expected to answer any and all questions for the record from the members of this committee.

>> i apologize. i'm wondering if i can say one more thing. >> of course. >> nitsa is an agency of people who wake up every day with nearly 100 reminders of how we need more resources and to work harder to protect the american public. because nearly every day, 100 people die on our roads because of drunk driving, distracted driving, vehicle defects. each hour we come to work with over 2,000 reminders of people who are injured, over 2,000 people every hour of our need for more resources and to continue to improve and act aggressively to save peoples' lives. that is what every employee and what i do every single day, dedicate ourselves to protecting the american public. we will work aggressively in this case. i welcome your support, i welcome the added resources we -- resources.

we will act aggressively to protect the american public. >> we appreciate the dedication of the federal employees who often are not given that appreciation. and on behalf of the committee, i express that. we now have a new problem that we are addressing. which is in effect a live hand grenade in front of a driver and a passenger in the vehicles that have been enumerated. and it must be addressed and it must be addressed immediately. and with that, thank you, and the meeting is adjourned. [captioning performed by the national captioning institute] [captions copyright national cable satellite corp. 2014]

>> the cato institute hosts a discussion tomorrow on free speech. speakers will look at how a 1958 supreme court case dealing with gay rights became a turning point in first amendment law. that is live at noon eastern on c-span3. over on c-span2, the discussion

on jihadist movements and the increase in violence across afghanistan, syria, and iraq. that is hosted by the endowment for peace. watch it live at 3:30 eastern. this thanksgiving week, c-span is featuring interviews from retiring members of congress. watch the interviews monday through thursday at 8:00 p.m. eastern. >> people have become so partisan. tell that to some of the people involved in congress back in the 1830's to 1860's period. douglas -- these people were trying desperately to work out compromises to keep the union afloat and avoided splitting up. >> i think we have a lot of

talented younger members trade it is not just mrs. pelosi. i think she has been a great leader, and she is really good at raising money. that is not one of my fortes. but they have to start training younger people and bring younger people into the caucus to become hopefully the future leaders. one of the things i certainly believe with all my heart and soul, you have to know when to leave. >> also on thursday, thanksgiving day, we will take in american history tour of various native american tribes traded that is at 10:00 a.m. eastern, following "washington journal." at 1:30, contain the groundbreaking of the new diplomacy center in washington with former secretaries of state. supreme court justices clarence thomas, samuel alito and sonia sotomayor at 8:00 p.m. eastern.

that is thanksgiving week on c-span. for a complete schedule, go to www.c-span.org. here on c-span, "newsmakers" his neck with republican congressman bill florez of texas. governors discussed their at aigns and agendas recent conference in florida. 8:00, a conversation with >> are guest is bill flores, republicans of texas. head abeen tasked to committee in a competitive election. >> welcome.

>> good morning i'm honored to be able to join you. we're going to start with christina. before we do the first question let's do the broadest one. which is tell us very briefly your top priorities in taking this gavel. why did you want the chairmanship and what do you intend to do with it? >> well, i looked at the republican study committee and because of its size and its passion and the quality of its membership, it seemed to me that it would be the organization to have the greatest influence in terms of being able to excute the things that are most important to the american people particularly in light of the fact that the republicans will control the senate in the 114th congress beginning in january. it just seemed like this would be a great way to be able to put conservative fingerprints on the policies that hard-working american families need to be able to better themselves at this point. e