Singapore markets close in 7 hours 1 minute
  • Straits Times Index

    -8.26 (-0.26%)
  • Nikkei

    -237.99 (-0.73%)
  • Hang Seng

    -138.13 (-0.78%)
  • FTSE 100

    -59.92 (-0.78%)
  • Bitcoin USD

    +104.47 (+0.40%)
  • CMC Crypto 200

    +3.05 (+0.54%)
  • S&P 500

    +17.38 (+0.40%)
  • Dow

    +43.04 (+0.13%)
  • Nasdaq

    +59.51 (+0.45%)
  • Gold

    -2.70 (-0.14%)
  • Crude Oil

    +0.10 (+0.11%)
  • 10-Yr Bond

    +0.1040 (+2.34%)
  • FTSE Bursa Malaysia

    +0.29 (+0.02%)
  • Jakarta Composite Index

    -18.46 (-0.26%)
  • PSE Index

    +15.44 (+0.25%)

NHTSA demands the recall of 67M potentially deadly airbag inflators; company disagrees

The National Highway Traffic Safety Administration (NHTSA) is demanding that the maker of a potentially defective airbag component recall 67 million units. But the manufacturer, ARC Automotive, says it isn’t proceeding with the recall.

The Knoxville, Tennessee-based subsidiary of China’s Sensteed Hi-Tech Group (000981.SZ) makes inflators for airbag modules, which have been used by at least 12 different automakers in the U.S., according to NHTSA.

The ARC airbag inflators used before 2018 have been found, based on field reports collected by NHTSA, to have a certain defect where in some cases the inflator ruptures when inflating—and metal particles are ejected in the passenger compartment. (ARC airbag inflators made after 2018 include a safety feature that detects debris in the inflator “mitigating the possibility of field rupture.")

NHTSA cites 9 specific incidents that lead to bodily injury (two of which were outside the US). Those include two that lead to fatal injuries. The incidents started in 2009, with the latest in March of 2023.

"NHTSA has investigated and identified a risk associated with a set of ARC air bag inflators that if left unaddressed would lead to more incidents in the future," a NHTSA spokesperson said in a statement to Yahoo Finance. "While incidents are rare, the incidents that have occurred have been severe, prompting the agency to issue a recall request. NHTSA is taking this action under its authorities to investigate potential defects and oversee recalls as required by the Vehicle Safety Act."

NHTSA reports the incidents occurring in vehicles made by Stellantis (Chrysler), Kia, GM, and Audi, as well as remedial efforts made by BMW, Ford, GM and Volkswagen to address issues with the airbags.

GM in fact issued a recall on May 12 of nearly 1 million vehicles with the ARC airbag inflators due to the possible defect; four of the incidents cited by NHTSA involved GM vehicles.

The 2017 GMC Acadia (L) and Acadia Denali are introduced at the North American International Auto Show in Detroit, January 12, 2016.   REUTERS/Mark Blinch
The 2017 GMC Acadia (L) and Acadia Denali are introduced at the North American International Auto Show in Detroit, January 12, 2016. REUTERS/Mark Blinch

“General Motors is voluntarily recalling certain 2014 to 2017 model year Chevrolet Traverse, GMC Acadia and Buick Enclave models. In these vehicles, the front-driver airbag inflator may contain a supplier manufacturing defect that may result in inflator rupture during deployment,” a GM spokesman said in a statement to Yahoo Finance. “GM is taking this expanded field action out of an abundance of caution and with the safety of our customers as our highest priority.”

In a letter to NTSA dated May 11th, ARC wrote that while it agrees with GM’s move to recall the vehicles due to “potential concerns” about the inflators, it disagrees with NHTSA’s demand for a full recall.

ARC wrote in its letter that NHTSA’s investigation into the defect was “not based upon any objective technical or engineering conclusion,” but rather conclusions and inferences based on the seven incidents that occurred in the US. “The Agency then asks ARC to prove a negative – that the 67 million inflators in this population are not defective,” ARC wrote.

ARC says NHTSA, vehicle manufacturers, and airbag module suppliers were not able to determine a “root cause” for the ruptures in the inflators, and ARC believes the issues in defective inflators were “one-off” manufacturing anomalies that were addressed by automakers in specific recalls done in the past.

ARC says that under the NHTSA Safety Act, a “defect” means more than an isolated failure, and NHTSA’s recall demand falls short of “establishing a common root cause or that these failures were anything other than occasional or isolated.”

Finally, ARC says that NHTSA’s ability to demand safety recalls does not apply to parts manufacturers like ARC. “The Safety Act and NHTSA’s implementing regulations expressly provide that vehicle manufacturers, not original equipment manufacturers, shall have recall responsibility for any defects found in original equipment installed in their vehicles.”

The next steps? Assuming an impasse remains between NHTSA and ARC, NHTSA could schedule a public hearing, or initiate litigation to compel ARC to recall its airbag inflators.

ARC did not immediately respond when Yahoo Finance reached out for comment.

Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.

Read the latest financial and business news from Yahoo Finance