Why Takata rescue would be costly, slow

Editor's note: an earlier version of this story used an outdated title for Autoliv executive Steve Fredin. He is now group vice president, sales & engineering.

DETROIT -- Congressional lawmakers have suggested that rival airbag suppliers could help Takata Corp. produce enough inflators to repair 10 million U.S. vehicles recalled since 2008.

But Steve Fredin, Autoliv's 52-year-old group vice president of sales & engineering, warns that a rescue is going to take time -- and money.

In an interview Nov. 24, Fredin emphasized that the company -- the world's largest airbag producer -- is willing to help.

Then, he ran through a long list of hurdles -- such as cost, propellant shortages and time-consuming tests -- that will come as sobering news to anyone who envisions a team of rivals quickly lifting Takata out of its mess.

According to Fredin, the Swedish supplier would have to spend $30 million to $50 million to add new production capacity, a project that probably would take 10 to 12 months. New inflators would require months of tests, too.

Suppliers' ability to make more inflators took on added urgency last week when the National Highway Traffic Safety Administration formally demanded that Takata participate in national recalls of driver-side airbags. Some recalls are now for vehicles in high-humidity states only.

Fredin, a 26-year veteran at Autoliv, says he has not committed to adding production capacity despite requests from various automakers, which he would not name.

With added overtime and weekend production, Autoliv can squeeze out limited production runs of 10,000 or 20,000 units, Fredin said.

But any major orders -- such as a couple of million inflators -- would require Autoliv's factories in Utah to add production lines. And Fredin wants long-term commitments for those.

"We don't have spare capacity lying around," Fredin said. "We've offered to help by running extra shifts and weekends. But to make millions of inflators, we'd need a new assembly line."

At a hearing scheduled for Wednesday by the House Subcommittee on Commerce, Manufacturing and Trade, lawmakers are likely to grill federal regulators and Takata executives about the time required to expand production.

Given the steps needed to boost output, there may be little that airbag makers such as Autoliv, TRW Automotive or Japan's Daicel can do quickly to produce enough inflators to repair the recalled vehicles.

TRW has said it is willing to produce replacement inflators, but it's unclear how much spare capacity the company -- the world's No. 3 airbag producer -- has available.

TRW spokesman John Wilkerson wrote in an email that "some excess capacity does exist on a global basis, [but it's] highly dependent on the specific inflator type."

Wilkerson wrote that TRW could not estimate the time required to produce replacements.

As of Nov. 5, eight automakers have told NHTSA that they had fixed just 438,000 recalled vehicles.

Takata hopes to boost monthly output of replacement inflators by February to 450,000 units from 300,000 today. At the higher rate, it still would take about two years to produce enough Takata inflators to fix all recalled vehicles in the United States.

As Takata struggles to boost production, various automakers have asked Autoliv and TRW if they can produce replacement inflators. According to Fredin, those requests have ranged from a few hundred thousand inflators within three months up to 10 million units over two years.

Autoliv's manufacturing complex in Utah produces 60 million inflators a year, but all of that production is spoken for. Fredin estimates that a $30 million to $50 million investment would allow Autoliv to produce an additional 10 million to 15 million inflators annually. But such an expansion would take time.

First, Autoliv would have to expand its Utah propellant factory, which already is operating around the clock, seven days a week. The propellant produces the gases that inflate airbags.

Next, the company would need new machinery to produce more initiators -- the inflator's electronic trigger.

The company is willing to invest in more capacity, Fredin said, but it can't do so simply to produce replacements for a couple of years. To make things worse, the automakers are unsure how many inflators they will need.

Four deaths in the United States and one in Malaysia have been linked to Takata inflators that exploded, hurling shrapnel as the airbags deployed. Federal regulators and some lawmakers have pressured automakers to expand their recalls, which would worsen the inflator shortage.

If an automaker wants a one- or two-year contract for a large batch of replacement inflators, Autoliv is seeking assurances of future commitments to keep its expanded assembly lines busy.

"In general, we would look for long-term commitments," Fredin said. "We're not engaging in hard negotiations -- we're just telling them the facts. This is what it will cost."

Even if Autoliv gets financial commitments, it may be unable to significantly speed its 10- to 12-month timetable because of the need for performance tests. That's because Autoliv inflators differ from Takata units in terms of propellant, performance and size.

Inflators come in a variety of dimensions -- typically cylinders. Autoliv inflators tend to be a bit larger than Takata units because they require more propellant. If a replacement inflator is, say, 5 millimeters bigger than the Takata unit, it may not fit in the airbag module.

Even if the inflator is the right size, it still must pass performance tests. The key indicator is the inflator's "mass flow rate" -- that is, how quickly it generates gas to fill the airbag and the total amount of gas produced.

"That has to be pretty close to get an airbag to function the same way," Fredin said.

If the inflators have similar performance, Autoliv might need only a month or so for tests. If not, tests might take Autoliv up to four months, plus any additional time required for Takata and the automaker to tune the airbag. Testing and production can run concurrently.

If Autoliv were to produce a Takata inflator by using Takata's specs, that would presumably eliminate the need for most testing. But that's not a practical option, Fredin says. Autoliv still would need to add costly machinery, thus chewing up 10 to 12 months.

Fredin's timeline for replacement inflators parallels that of several automakers. In documents filed Nov. 5 to NHTSA, Toyota estimated that it would take one year to obtain replacement inflators from another supplier, while BMW said it could take two.

All this will be bad news to the Senate Commerce Committee, which is pressuring federal regulators to ask other suppliers to supplement Takata's inflator production.

On Nov. 20, committee members called on David Friedman, NHTSA's deputy administrator, to order automakers to take replacement inflators from suppliers other than Takata.

Can Autoliv step up? "We're willing to help," Fredin said. "But we're not going to invest in this new capacity for free. It's not going to be on our nickel, because it's not sustainable." c