[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]




 
          AN UPDATE ON THE TAKATA AIRBAG RUPTURES AND RECALLS

=======================================================================

                                HEARING

                               BEFORE THE

           SUBCOMMITTEE ON COMMERCE, MANUFACTURING, AND TRADE

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              JUNE 2, 2015

                               __________

                           Serial No. 114-49
                           
                           
                           
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]                          
                           



      Printed for the use of the Committee on Energy and Commerce

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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman

JOE BARTON, Texas                    FRANK PALLONE, Jr., New Jersey
  Chairman Emeritus                    Ranking Member
ED WHITFIELD, Kentucky               BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois               ANNA G. ESHOO, California
JOSEPH R. PITTS, Pennsylvania        ELIOT L. ENGEL, New York
GREG WALDEN, Oregon                  GENE GREEN, Texas
TIM MURPHY, Pennsylvania             DIANA DeGETTE, Colorado
MICHAEL C. BURGESS, Texas            LOIS CAPPS, California
MARSHA BLACKBURN, Tennessee          MICHAEL F. DOYLE, Pennsylvania
  Vice Chairman                      JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana             G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio                DORIS O. MATSUI, California
CATHY McMORRIS RODGERS, Washington   KATHY CASTOR, Florida
GREGG HARPER, Mississippi            JOHN P. SARBANES, Maryland
LEONARD LANCE, New Jersey            JERRY McNERNEY, California
BRETT GUTHRIE, Kentucky              PETER WELCH, Vermont
PETE OLSON, Texas                    BEN RAY LUJAN, New Mexico
DAVID B. McKINLEY, West Virginia     PAUL TONKO, New York
MIKE POMPEO, Kansas                  JOHN A. YARMUTH, Kentucky
ADAM KINZINGER, Illinois             YVETTE D. CLARKE, New York
H. MORGAN GRIFFITH, Virginia         DAVID LOEBSACK, Iowa
GUS M. BILIRAKIS, Florida            KURT SCHRADER, Oregon
BILL JOHNSON, Ohio                   JOSEPH P. KENNEDY, III, 
BILLY LONG, Missouri                 Massachusetts
RENEE L. ELLMERS, North Carolina     TONY CARDENAS, California
LARRY BUCSHON, Indiana
BILL FLORES, Texas
SUSAN W. BROOKS, Indiana
MARKWAYNE MULLIN, Oklahoma
RICHARD HUDSON, North Carolina
CHRIS COLLINS, New York
KEVIN CRAMER, North Dakota

                                 

           Subcommittee on Commerce, Manufacturing, and Trade
           

                       MICHAEL C. BURGESS, Texas
                                 Chairman
LEONARD LANCE, New Jersey            JANICE D. SCHAKOWSKY, Illinois
  Vice Chairman                        Ranking Member
MARSHA BLACKBURN, Tennessee          YVETTE D. CLARKE, New York
GREGG HARPER, Mississippi            JOSEPH P. KENNEDY, III, 
BRETT GUTHRIE, Kentucky                  Massachusetts
PETE OLSON, Texas                    TONY CARDENAS, California
MIKE POMPEO, Kansas                  BOBBY L. RUSH, Illinois
ADAM KINZINGER, Illinois             G.K. BUTTERFIELD, North Carolina
GUS M. BILIRAKIS, Florida            PETER WELCH, Vermont
SUSAN W. BROOKS, Indiana             FRANK PALLONE, Jr., New Jersey (ex 
MARKWAYNE MULLIN, Oklahoma               officio)
FRED UPTON, Michigan (ex officio)

                                  (ii)
                                  
                                  
                                  
                                  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Michael C. Burgess, a Representative in Congress from the 
  State of Texas, opening statement..............................     1
    Prepared statement...........................................     3
Hon. Janice D. Schakowsky, a Representative in Congress from the 
  State of Illinois, opening statement...........................     4
    Prepared statement...........................................     5
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, opening statement....................................     6
    Prepared statement...........................................     8
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................     9
    Prepared statement...........................................    10

                               Witnesses

Mark R. Rosekind, Administrator, National Highway Traffic Safety 
  Administration.................................................    11
    Prepared statement...........................................    14
    Answers to submitted questions...............................   108
Kevin M. Kennedy, Executive Vice President, North America, Takata    42
    Prepared statement...........................................    44
    Answers to submitted questions \1\...........................   121
David Kelly, Project Director, Independent Testing Coalition.....    52
    Prepared statement...........................................    53
    Answers to submitted questions \2\...........................   122
Mitch Bainwol, President and Chief Executive Officer, Alliance of 
  Automobile Manufacturers.......................................    54
    Prepared statement...........................................    56
    Answers to submitted questions \2\...........................   123
John Bozzella, President and Chief Executive Officer, Association 
  of Global Automakers...........................................    62
    Prepared statement...........................................    64
    Answers to submitted questions...............................   124

                           Submitted Material

Letter of June 2, 2015, from Jacqueline Gillan, President, 
  Advocates for Highway and Auto Safety, et al., to Mr. Pallone 
  and Ms. Schakowsky, submitted by Ms. Schakowsky................    94
Statement of American Car Rental Association and Consumers for 
  Auto Reliability and Safety, June 2, 2015, submitted by Ms. 
  Clarke.........................................................    96
``Takata Airbag Inflator Ruptures: Timeline of Events,'' 
  submitted by Mr. Burgess.......................................   100

----------
\1\ Mr. Kennedy's answers to submitted questions have been retained in 
committee files and also are available at  http://docs.house.gov/
meetings/IF/IF17/20150602/103546/HHRG-114-IF17-Wstate-KennedyK-
20150602-SD005.pdf.
\2\ Mr. Kelly and Mr. Bainwol did not answer submitted questions for 
the record by the time of printing.


          AN UPDATE ON THE TAKATA AIRBAG RUPTURES AND RECALLS

                              ----------                              


                         TUESDAY, JUNE 2, 2015

                  House of Representatives,
Subcommittee on Commerce, Manufacturing, and Trade,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 2:09 p.m., in 
room 2123 of the Rayburn House Office Building, Hon. Michael C. 
Burgess (chairman of the subcommittee) presiding.
    Members present: Representatives Burgess, Lance, Blackburn, 
Harper, Guthrie, Olson, Kinzinger, Bilirakis, Brooks, Mullin, 
Upton (ex officio), Schakowsky, Clarke, Kennedy, Cardenas, 
Butterfield, Welch, and Pallone (ex officio).
    Staff present: Leighton Brown, Press Assistant; James 
Decker, Policy Coordinator, Commerce, Manufacturing, and Trade; 
Andy Duberstein, Deputy Press Secretary; Graham Dufault, 
Counsel, Commerce, Manufacturing, and Trade; Melissa Froelich, 
Counsel, Commerce, Manufacturing, and Trade; Kirby Howard, 
Legislative Clerk; Paul Nagle, Chief Counsel, Commerce, 
Manufacturing, and Trade; John Ohly, Professional Staff Member, 
Oversight and Investigations; Olivia Trusty, Professional Staff 
Member, Commerce, Manufacturing, and Trade; Michelle Ash, 
Democratic Chief Counsel, Commerce, Manufacturing, and Trade; 
Christine Brennan, Democratic Press Secretary; Jeff Carroll, 
Democratic Staff Director; Elisa Goldman, Democratic Counsel; 
Meredith Jones, Democratic Director of Communications, Member 
Services, and Outreach; Adam Lowenstein, Democratic Policy 
Analyst; and Timothy Robinson, Democratic Chief Counsel.
    Mr. Burgess. I want to welcome Dr. Rosekind to our 
committee hearing today. The Subcommittee on Commerce, 
Manufacturing, and Trade will now come to order. The Chair 
recognizes himself for 5 minutes for the purposes of an opening 
statement.

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE 
              IN CONGRESS FROM THE STATE OF TEXAS

    So, again, I want to extend my welcome to everyone as we 
revisit a very serious motor vehicle deficit. Six months ago 
this subcommittee held a hearing looking at the same issue, and 
members of the subcommittee were assured that everything was 
being done, and that testing and expertise were being brought 
to bear, but there were still a lot of unanswered questions. I 
was not chairman at that time, but I did sit in on the 
subcommittee hearing, and I remember raising the concern that 
safer does not mean the same thing as safe. Here we are 6 
months later, and I was hoping we were getting down the road of 
safer, but it is still unclear to me how far away we are from 
safe.
    A few weeks ago the National Highway Traffic Safety 
Administration launched the largest motor vehicle safety recall 
in our Nation's history due to defective Takata airbags. This 
recall may impact 13 percent of the country's driving stock, 
affecting an unknown number of vehicles, and spanning 11 
vehicle manufacturers. Since our last hearing, tragically, 
there has been an additional death attributed to an exploding 
Takata airbag in my home State of Texas. Every morning I fear I 
am playing headline roulette waiting for another rupture, 
another injury, another death. While it has now been confirmed 
that there is a defect affecting at least six Takata airbag 
inflators, we don't have any great clarity as to the root 
cause, and how we will know when we get to that point where we 
are safe. Clarity and transparency are indeed needed.
    One thing that certainly isn't clear is why we are 
launching this national recall now, instead of almost a year 
ago, when basically the same information was before us. The 
American people deserve much better. They deserve to know, when 
a national recall is announced, if their car part is of the 
recall. I am repeatedly visited by vehicle manufacturers who 
lament the challenges of getting drivers to respond to recall 
notices, especially following a year of record recalls, and an 
overwhelming sense of recall fatigue. Yet, when we do have the 
attention of consumers, how is it helpful to tell them that 
there is a recall, but to check back later to see if you need 
to do something? NHTSA serves a fundamental and critical role 
in ensuring vehicle safety. It is critically important that it 
be part of the solution in every step of the recall process in 
removing defective vehicles from the road.
    The supply of replacement parts is also of concern. I am 
glad that the agency has--acknowledging that it has a role to 
play. United States drivers are competing against a global 
supply chain, and recalls in many parts of the world. I also 
acknowledge that Dr. Rosekind is still fairly new to NHTSA, and 
was not yet the administrator at our last hearing. I hope that 
we will see more action going forward, as this is now direct 
and timely.
    I have serious concerns about where we are in the process. 
It is inconceivable to me that none of the tests conducted by 
Takata over the past year on over 30,000 inflators has given us 
a clearer picture and dictated more direct action. And why is 
it that we still don't have any deployment testing being done 
by anyone besides Takata? At what point do we accept that we 
need to completely eliminate defective inflators and implement 
a new design, and a new manufacturing process? Are all the 
driver's side airbag replacements now using different inflator 
compounds? What is different about the passenger side 
inflators?
    We do have many questions today. The most important 
question of all, however, does not involve compounds, desiccate 
O-rings, or moisture. It is simply this, when will we have a 
plan that can be presented to the public, identifies who is 
affected, and when they will have a safe, not a safer, but a 
safe replacement part available? Nothing is more important, and 
nothing else is acceptable. In the meantime, the driving public 
should continue checking their Vehicle Identification Numbers 
against the NHTSA database to see if their vehicle is affected, 
and this includes vehicles that have previously been recalled.
    [The prepared statement of Mr. Burgess follows:]

             Prepared statement of Hon. Michael C. Burgess

    Good morning. I want to welcome everyone to our hearing 
today as we revisit a very serious motor vehicle defect. Six 
months ago, this subcommittee held a hearing looking at this 
same issue and the Members were assured that everything was 
being done and that testing and expertise were being brought to 
bear. But there were still a lot of unanswered questions. I sat 
in on that hearing and raised the concern that Safer is not the 
same thing as Safe.
    Six months later, I hope we are getting down the road of 
safer, but it is still unclear to me how far away we are from 
Safe. A few weeks ago, the National Highway Traffic Safety 
Administration launched the largest motor vehicle safety recall 
in our Nation's history due to defective Takata airbags. This 
recall may impact up to 13% of the country's driving 
population, affecting an unknown number of vehicles and 
spanning 11 vehicle manufacturers.
    Since our last hearing, tragically, there has been an 
additional death attributed to an exploding Takata airbag in my 
home State of Texas. Every morning I fear I am playing headline 
roulette waiting for another rupture. While it has now been 
confirmed that there is a defect affecting at least six Takata 
airbag inflators, we still don't have any great clarity about 
what was the root cause and how we know that we are safe going 
forward. Clarity and transparency are needed.
    One thing that isn't clear is why we are launching this 
national recall now instead of almost a year ago when we had 
almost the same information before us. The American people 
deserve much more. They deserve to know when a national recall 
is announced if their car is part of the recall. I am 
repeatedly visited by vehicle manufacturers who lament the 
challenges of getting drivers to respond to recall notices, 
especially following a year of record recalls and an 
overwhelming sense of recall fatigue. Yet, when we do have the 
attention of consumers, how is it helpful to tell them there is 
a recall but check back later to see if you need to do 
something. NHTSA serves a fundamental and critical role in 
ensuring vehicle safety. It is important that it be a part of 
the solution in every step of the recall process in removing 
defective vehicles from the road.
    The supply of replacement parts is also a concern. I am 
glad that NHTSA is acknowledging that it has a role to play. 
U.S. drivers are competing against a global supply chain and 
recalls in many parts of the world. I also acknowledge that Dr. 
Rosekind is still fairly new to NHTSA, and was not yet the 
Administrator at our last hearing. I hope we will see more 
action from them going forward that is direct and timely.
    In that vein, I have serious concerns about where we are in 
the process. It is inconceivable to me that none of the tests 
conducted by Takata over the past year on over 30,000 inflators 
has given us a clearer picture and dictated more direct action. 
And why is it that we still don't have any deployment testing 
being done by anyone besides Takata? At what point do we accept 
that we need to completely eliminate the defective inflators 
and implement a new design and manufacturing process? Are all 
the driver side airbag replacements now using different 
inflator compounds? What is different about the passenger side 
inflators?
    We have many questions today. The most important question 
of all, however, does not involve compounds, desiccant, o-rings 
or moisture. It is simply:
    When will we have a plan that can be presented to the 
public that identifies who is affected, and when they will have 
a SAFE, not safer, but SAFE, replacement part available?
    Nothing is more important, and nothing else is acceptable.
    In the meantime, the driving public should continue 
checking their VIN numbers against NHTSA's database to see if 
their vehicle is affected. This includes those vehicles that 
have previously been recalled.

    Mr. Burgess. Chair now recognizes--I will be happy to yield 
to Mrs. Blackburn the balance of the time.
    Mrs. Blackburn. Thank you, Mr. Chairman, and I want to 
thank the witnesses for both panels for being here. As Chairman 
Burgess has said, this is an issue that we have followed, are 
continuing to work on, and you are going to see us stay with 
this issue. The fact that we have these airbag ruptures, that 
they have caused serious injury and death, is of concern to us. 
I questioned Takata at the last hearing about a November 19, 
2014, New York Times article which noted that engineers at 
Takata's Moses Lake, Washington, facility had raised serious 
concern about the use of ammonium nitrate as an airbag 
propellant. They had done that as far back as 1999, yet they 
persist with this. Questions persist, and I thank you all for 
being here for our hearing. I yield back.
    Mr. Burgess. Gentlelady yields back. The Chair thanks the 
gentlelady. The Chair recognizes Subcommittee Ranking Member 
Ms. Schakowsky, 5 minutes for an opening statement, please.

       OPENING STATEMENT OF HON. JANICE D. SCHAKOWSKY, A 
     REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS

    Ms. Schakowsky. Thank you, Mr. Chairman, for holding 
today's hearing on the Takata airbag recall. The American 
people deserve to know what went wrong with Takata's airbags, 
and why it took so long to discover, and how the committee and 
this Congress will respond to ensure that it never happens 
again.
    Chairman Upton recently remarked about his airbag deploying 
after hitting a deer and said, ``Maybe I am lucky it wasn't a 
Takata''. But at least 34 million Americans aren't so lucky. We 
have a guest here today, Angelina Zujarta, who was a victim--
raise your hand--who was a victim of a Takata air rupture. At 
least six people have been killed by their airbag. In 
Angelina's case, it was 3 years ago, she was in a car accident 
at only 25 miles an hour. Shrapnel from a defective airbag 
ripped her chest, and we are just very thankful to have her 
here today. Here is an example of such an airbag that has these 
holes in it, where the--am I on the wrong side? Here we go. 
That shows where the shrapnel came out. This is an example--
these are examples of these sharp pieces that landed in her 
chest in two places. These are not the exact ones, but shrapnel 
like this, and it is very, very dangerous. We need to stop it.
    My big concern about this recall is that the root cause 
really has not been yet determined. We have been told that a 
combination of factors, including humidity and age, contribute 
to airbag ruptures, but we don't know whether the flaws in the 
design, manufacture, installation, or some other aspect of the 
airbag, which means that we still can't be sure that 
replacement airbags being installed right now are any safer. 
Well, this is really dangerous, and we need to know what caused 
this failure to make sure that it doesn't happen again.
    But as we wait for those questions to be answered, there 
are steps we can take right now to improve vehicle safety. Many 
of those are included in H.R. 1181, the Vehicle Safety 
Improvement Act, legislation that I introduced earlier this 
year, along with my colleague, and several others, Frank 
Pallone, the ranking Democrat on the full committee. And I am 
hopeful that my colleagues on both sides of the aisle will join 
me in this bill. 2014 was the year of the recall. Almost half 
of all cars on our roads were recalled. GM, Honda, and other 
major auto companies failed their customers, and lives were 
lost as a result. The Vehicle Safety Improvement Act takes 
valuable lessons from those recalls, and addresses existing 
weaknesses and information sharing, oversight, and 
accountability regarding auto safety.
    The legislation includes several provisions that would have 
benefitted consumers whose cars have those faulty airbags. One, 
the bill would double NHTSA's funding for vehicle safety 
programs, a priority that has been severely underfunded by this 
Congress. Two, H.R. 1181 would increase the quantity and 
quality of information shared by auto manufacturers not only 
with NHTSA, but with the public, and with Congress. Had more 
information about Takata airbag ruptures been cataloged and 
diagnosed earlier, I believe lives could have been saved. 
Three, the bill would require manufacturers to fix all recalled 
vehicles free of charge, rather than just those that were 
purchased within the past 10 years. And Takata has indicated 
that age of airbags is a contributing factor to ruptures, and 
many of the vehicles with defective Takata airbags are more 
than 10 years old. They should clearly be subject to mandatory 
fixes.
    Under the legislation, NHTSA would also have new imminent 
hazard authority to expedite recalls related to dangers 
defects. It would eliminate the regional recall program, 
ensuring that all cars subject to a recall are repaired, 
regardless of their location. Both of those changes would have 
improved the speed, scope, and efficacy of the Takata recall.
    The ongoing investigation into Takata airbag ruptures may 
identify additional policies that would limit the risk of 
similar recall during--in the future. If it does, we should 
enact them as soon as possible. In the meantime, we can't 
afford to wait to act on legislation that we know would save 
lives. It is not just committee Democrats who want action. A 
who's who of leading consumer and auto safety organizations 
support H.R. 1181, and I really implore my Republican 
colleagues to join me in this legislation. I ask unanimous 
consent that this advocates letter be added to the record.
    Mr. Burgess. Without objection, so ordered.
    [The information appears at the conclusion of the hearing.]
    Ms. Schakowsky. And I am eager to hear answers from our 
witnesses about what led to this massive failure, how to 
prevent another one in the future. And in the meantime, we 
can't delay common sense safety improvements that will save 
lives. I urge the committee to advance the Vehicle Safety 
Improvement Act without delay, and I yield back.
    [The prepared statement of Ms. Schakowsky follows:]

            Prepared statement of Hon. Janice D. Schakowsky

    Thank you, Mr. Chairman, for holding today's hearing on the 
Takata airbag recall. The American people deserve to know what 
went wrong with Takata airbags, why it took so long to 
discover, and how this committee and this Congress will respond 
to ensure that it never happens again.
    Chairman Upton recently remarked about his airbag that 
deployed after hitting a deer, ``maybe I'm lucky it wasn't a 
Takata.''
    At least 34 million Americans aren't so lucky. We have a 
guest here today, Angelina Sujata, who is a victim of a Takata 
airbag rupture. At least six people have been killed by their 
airbag--a supposed safety feature.
    My biggest concern about this recall is that the root cause 
has not been determined. We've been told that a combination of 
factors--including humidity and age--contribute to airbag 
ruptures, but we don't know whether the flaw is in the design, 
manufacture, installation, or some other aspect of the airbag. 
That means we still can't be sure that the replacement airbags 
being installed right now are any safer. That isn't just dumb--
it's dangerous. We need to know what caused this failure to 
make sure it doesn't happen again.
    But as we wait for those questions to be answered, there 
are steps we can take right now to improve vehicle safety. Many 
of those are included in H.R. 1181, the Vehicle Safety 
Improvement Act--legislation I introduced earlier this year.
    2014 was the year of the recall. Almost half of all cars on 
our roads were recalled. GM, Honda, and other major auto 
companies failed their customers--and lives were lost as a 
result. The Vehicle Safety Improvement Act takes valuable 
lessons from those recalls and addresses existing weaknesses in 
information sharing, oversight, and accountability regarding 
auto safety.
    The Vehicle Safety Improvement Act includes several 
provisions that would have benefitted consumers whose cars have 
those faulty airbags:
     The bill would more than double NHTSA's funding 
for vehicle safety programs--a priority that has been severely 
underfunded by this Congress.
     H.R. 1181 would increase the quantity and quality 
of information shared by auto manufacturers with NHTSA, the 
public, and Congress. Had more information about the Takata 
airbag ruptures been catalogued and diagnosed earlier, lives 
could have been saved.
     The bill would require manufacturers to fix all 
recalled vehicles free of charge--rather than just those that 
were purchased within the past 10 years. Takata has indicated 
that age of airbags is a contributing factor to ruptures, and 
many of the vehicles with defective Takata airbags are more 
than 10 years old. They should clearly be subject to mandatory 
fixes.
     Under the legislation, NHTSA would also have new 
Imminent Hazard Authority to expedite recalls related to 
dangerous defects. It would eliminate the regional recall 
program, ensuring that all cars subject to a recall are 
repaired, regardless of their location. Both of those changes 
would have improved the speed, scope, and efficacy of the 
Takata recall.
    The ongoing investigation into the Takata airbag ruptures 
may identify additional policies that would limit the risk of a 
similar recall occurring in the future. If it does, we should 
enact them as soon as possible. In the meantime, we can't 
afford to wait to act on legislation that we know would save 
lives.
    It's not just committee Democrats who want action. A who's 
who of leading consumer and auto safety organizations support 
H.R. 1181 and urge this committee to move it forward without 
delay. I ask unanimous consent that their letter be added to 
the record.
    I am eager to hear answers from our witnesses about what 
led to this massive failure, and how to prevent another one in 
the future. In the meantime, we cannot delay commonsense auto 
safety improvements that will save lives. I urge the committee 
to advance the Vehicle Safety Improvement Act without delay, 
and I yield back.

    Mr. Burgess. Gentlelady yields back. The Chair thanks the 
gentlelady. The Chair recognizes the gentleman from Michigan, 5 
minutes for an opening statement, please.

   OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Upton. Thank you, Mr. Chairman. An airbag is a safety 
measure that you hope that you never have to use. And if you do 
need it, you need to have it work exactly right. And yes, I had 
my own incident, going back for the Memorial Day break in 
Michigan less than 2 weeks ago. It was dark, it was at night, 
there wasn't much of a moon, and I was driving at 70 miles an 
hour when I hit not one deer, but two. I was lucky. The seat 
belt worked, airbag deployed, just as they were designed. It 
was a scary moment for anyone, and I remember thinking, you 
know, I am lucky I didn't have a defective Takata airbag at the 
time. And then I thought, the safety of your airbag can't be 
just a game of luck. Being from the auto State, which includes 
Takata's headquarters in Auburn Hills, Michiganders understand 
better than most just how complicated cars are, and how much 
goes into each and every part. Cars are certainly safer today 
than ever before. As miles driven, and as the age of the car 
goes up, deaths and injuries have gone down.
    What concerns me today, though, are the multiyear safety 
investigations where we can identify a problem, but a solution 
is nowhere in sight, where the preferred approaches are Band-
Aids, instead of an effective cure. In these Takata airbags, we 
have a problem. It has persisted for years. And again we have 
NHTSA opening up an initial investigation, and closing it, 
before revisiting it years later. The technology truly is 
rocket science, but you don't need to be a rocket scientist to 
see that more needs to be done, and it should have been done a 
lot quicker. When lives are put in jeopardy, delay is deadly. 
There wasn't much doubt at our December hearing last year that 
the airbags were defective, but it still took 6 months to say 
so.
    Dr. Rosekind was not the administrator when we held our 
last hearing in December, and there has been some--certainly 
some positive movement of late. Now Takata is changing its 
formulation of propellant in the replacement on the driver's 
side, either because someone else is making it, or because they 
were using improved formulations of their own. But this isn't 
the case on the passenger side. Instead, they continue to try 
to perfect an innumerable set of manufacturing variables which, 
for 10 years or more, have resisted perfection. So we trust 
that this time the moisture won't get in, and everything else 
will be just perfect.
    Once we have safe replacements, we need people to actually 
be able to replace them. Recall rates of 15 to 30 percent are 
unacceptable. We have to understand what the plan is from NHTSA 
and the automakers. NHTSA will be--for the first time act as a 
central coordinator. Such a move seems warranted, if not 
overdue, but we need to clearly understand the plan so that it 
can be relayed to the public. The messaging around these airbag 
recalls has been tortured, at best. We need more information, 
clear information from consumers. I am concerned that NHTSA and 
Takata decided to release head turning, headline grabbing 
recall numbers at a time when the information is not yet 
actionable for consumers. Drivers read about the recall, 
biggest one in history, but could not look up if their own car 
was part of the recall, including mine, a week or two after my 
incident. How does that help safety? Surely a better way 
exists.
    At a time when this committee should be focusing on how to 
update NHTSA, how to incentivize the rollout of better safety 
technologies, and how to improve recall take rates, we are 
instead forced to understand why safety, our very highest 
priority, seems relegated to the back lot. Testing is overdue. 
Change is overdue. Safe replacement parts are overdue. Six 
months ago I asked the question, what should I say to the mom 
in Michigan who asked me if she and her family are safe behind 
the wheel? Six months later I, unfortunately, have to ask the 
same question. We will have as many hearings as needed, and 
require as much reporting to this committee as needed, to 
ensure that this problem is finally resolved, restoring the 
safety of our Nation's roadways and trust of the American 
people.
    [The prepared statement of Mr. Upton follows:]

                 Prepared statement of Hon. Fred Upton

    An airbag is a safety measure you hope you never need--if 
you do need it, you need it to work exactly right. I had my own 
incident with an airbag while back in Michigan just two weeks 
ago. It was in the evening, pitch black, while driving on the 
interstate at 70 mph when I struck two deer. I was lucky that 
my seat belt worked and my air bag deployed--just as they were 
designed. It's a scary moment for anyone and I remember 
thinking, ``I'm very lucky I didn't have a defective Takata 
airbag.'' And then I thought, ``the safety of your airbag can't 
be a game of luck.''
    Being from the auto State, which includes Takata's 
headquarters in Auburn Hills, Michiganders understand better 
than most just how complicated cars are and how much goes into 
each and every part. Cars are safer today than ever before. As 
miles driven and the age of the car go up, deaths and injuries 
have gone down.
    What concerns me today, though, are multiyear safety 
investigations where we can identify a problem but a solution 
is nowhere in sight; where the preferred approaches are band-
aids instead of an effective cure. In these Takata airbags we 
have a problem that has persisted for years. And again we have 
NHTSA opening an initial investigation and closing it before 
revisiting it years later.
    This technology is truly rocket science. But you don't need 
to be a rocket scientist to see that more needs to be done and 
that it should have been done sooner. When lives are put in 
jeopardy, delay is deadly. There wasn't much doubt at our 
December hearing that the airbags were defective, but it still 
took six months to say so.
    Dr. Rosekind was not the administrator when we held our 
last hearing in December and there has been some positive 
movement of late. Now, Takata is changing its formulation of 
propellant in the replacements on the driver's side--either 
because someone else is making it or because they are using 
improved formulations of their own. But this is not the case on 
the passenger's side. Instead they continue to try to perfect 
an innumerable set of manufacturing variables, which for 10-
plus years have resisted perfection. Do we trust that this time 
the moisture won't get in and everything else will be perfect?
    Once we have safe replacements, we need people to actually 
replace them. Recall rates of 15--30 percent are unacceptable. 
We must understand what the plan is from NHTSA and the 
automakers. NHTSA will for the first time act as a central 
coordinator. Such a move seems warranted, if not overdue, but 
we need to clearly understand the plan so that it can be 
relayed to the public.
    The messaging around these airbag recalls has been tortured 
at best. We need more information, and clearer information for 
consumers. I am concerned that NHTSA and Takata decided to 
release head turning, headline grabbing recall numbers at a 
time when the information is not yet actionable for consumers. 
Drivers read about the biggest recall in history, but could not 
look-up if their car was part of the recall. How does that help 
safety? Surely a better way exists.
    At a time when this committee should be focusing more on 
how to update NHTSA, how to incentivize the rollout of better 
safety technologies, and how to improve recall take rates we 
are instead forced to understand why safety, our very highest 
priority, seems relegated to the back lot. Testing is overdue. 
Change is overdue. Safe replacement parts are overdue. Six 
months ago I asked the question, ``What should I say to the mom 
in Michigan who asks me if she and her family are safe behind 
the wheel?'' Six months later I unfortunately have to ask the 
same question. We will have as many hearing as needed and 
require as much reporting to this committee as needed to ensure 
that this problem is finally resolved--restoring the safety of 
our Nation's roadways and the trust of the American people.

    Mr. Upton. And I yield back the balance of my time to Mr. 
Lance.
    Mr. Lance. Thank you, Chairman Upton, and distinguished 
members of the committee. I telephoned my car dealer last week. 
I have a 2004 Honda Accord. I did not indicate my title. I just 
telephoned as a regular and ordinary citizen, and I was told 
that I will need a new airbag. It seems to me that one of the 
main purposes of this hearing is to make sure that Mr. and Mrs. 
John Q. Public are aware of the recall, are able to be informed 
quickly as to whether their automobile is affected, one of 34 
million inflators recalled, and be confident that the 
replacement is safe.
    During the subcommittee's hearing 6 months ago, Takata's 
witness indicated extreme reluctance to cooperate with NHTSA's 
requests for an expanded recall, and I characterized the 
testimony at that time as tendentious. I am extremely 
dissatisfied with the company's obstinate attitude during a 
majority of this process, and I hope that its recent change of 
heart will be sincere. It occurs, of course, after being fined 
$14,000 a day. I look forward to discussing this with the 
distinguished person now in charge, Mr. Rosekind. And, Mr. 
Chairman, I hope that this will be a hearing of great substance 
for the American people.
    Mr. Burgess. Chair thanks the gentleman, gentleman yields 
back. Chair recognizes the ranking member of the full 
committee, Mr. Pallone, 5 minutes for an opening statement, 
please.

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF NEW JERSEY

    Mr. Pallone. Thank you, Mr. Chairman. Though it has taken 
months, I am glad that Takata finally admitted that its airbags 
are defective, and finally moved forward with national recalls. 
Getting dangerous cars off the road is crucial. Airbags are 
supposed to save lives, and not take lives.
    But these national recalls came after a full year in which 
we have seen a rather sloppy rollout of recalls of these 
exploding airbags. Each automaker seems to have handled the 
recalls differently. Some automakers conducted regional safety 
improvement campaigns in high absolute--areas. At the same 
time, others conducted regional recalls in the same areas. Some 
automakers expanded their recalls to more States. Some 
eventually conducted national recalls of certain cars. One 
automaker advised against passengers using front seats until 
the airbags are fixed, even offering to disable passenger 
airbags as a precaution.
    All of this has led to considerable confusion for the 
public. Drivers are unsure if their cars are part of the 
recall. Those who have already had their airbag replaced do not 
know if they need to have it replaced again. But most 
importantly, people do not know if their cars are safe to 
drive. This is the second hearing this subcommittee has held on 
the Takata airbag recalls, and our first hearing was 6 months 
ago, and yet in that time we are still left with many of the 
same questions. We still do not know the root cause of the 
Takata airbag defects. We certainly know enough to take action, 
however. And while I appreciate and share the majority's 
concerns about this Takata crisis, I am disappointed by its 
lack of action. Auto safety is not a partisan issue. However, 
even after the GM ignition switch issues, the Takata airbag 
ruptures, and even going back to the Toyota sudden acceleration 
problems, this committee has failed to take appropriate 
legislative action.
    Earlier this year, Subcommittee Ranking Member Schakowsky 
and I, and of course she mentioned it, with a number of other 
members of the subcommittee introduced the Vehicle Safety 
Improvement Act of 2015. Many provisions in our bill would 
address problems that occurred in the Takata airbag and the GM 
ignition switch recalls. I mentioned to Congresswoman 
Schakowsky that my car--I had a Chevy Impala, I think it was a 
2008, I still have it--was, you know, subject to the ignition 
switch issue. And, you know, I received a notice in the mail, 
but there was still some confusion, even on my part, as to what 
this was all about. I was told that until I actually had the 
opportunity to go to the Chevy dealer that I should separate 
the two parts of the key from the keychain, or whatever this 
thing is called. And, you know, I continued to do that, even 
after the--even after they soldered and fixed the key. And, of 
course, I had to look up and see if my VIN number was one of 
the Impalas that had to be recalled. But even in my mind, there 
is a lot of confusion about, you know, what was being 
accomplished.
    And I think that is why we need legislation. The National 
Highway Transportation Safety Administration, or NHTSA, has 
received much of the blame in both the GM recall and this 
Takata recall, but it is clear that NHTSA simply does not have 
the resources and authorities it needs to protect drivers and 
passengers, and to hold automakers and automobile parts 
suppliers accountable for safety defects. Our bill provides 
more resources and tools to NHTSA, increasing fines for 
manufacturers that violate vehicle safety laws. Also, in both 
cases, automakers and parts suppliers failed to timely produce 
critical information that may have helped NHTSA identify 
problems earlier. The bill improves the early warning reporting 
system by making more reported information public, and 
requiring manufacturers provide significantly more information 
about any fatal accident involving a safety defect.
    So, Chairman Burgess and Chairman Upton, I appreciate your 
interest and, you know, what you have said today, in terms of 
continued oversight of these recalls, but I think that we need 
to begin our legislative work, and not just talk about more 
investigations. I hope that we can work together to move 
forward with a bill to keep our citizens safe on the roads. I 
yield back.
    [The prepared statement of Mr. Pallone follows:]

             Prepared statement of Hon. Frank Pallone, Jr.

    Thank you, Mr. Chairman. Though it has taken months, I am 
glad that Takata finally admitted that its airbags are 
defective and finally moved forward with national recalls. 
Getting dangerous cars off the road is crucial. Airbags are 
supposed to save lives, not take lives.
    But these national recalls came after a full year in which 
we have seen a rather sloppy roll-out of recalls of these 
exploding airbags. Each automaker seems to have handled the 
recalls differently.
    Some automakers conducted regional ``safety improvement 
campaigns'' in high absolute humidity areas. At the same time, 
others conducted ``regional recalls'' in the same areas. Some 
automakers expanded their recalls to more States. Some 
eventually conducted national recalls of certain cars. One 
automaker advised against passengers using front seats until 
the airbags are fixed, even offering to disable passenger 
airbags as a precaution.
    All of this has led to considerable confusion for the 
public. Drivers are unsure if their cars are part of the 
recall. Those who have already had their airbag replaced do not 
know if they need to have them replaced again.
    But most importantly, people do not know if their cars are 
safe to drive.
    This is the second hearing this subcommittee has held on 
the Takata airbag recalls. Our first hearing was six months 
ago. And yet, in that time, we are still left with many of the 
same questions.
    We may still not know the root cause of the Takata airbag 
defects, we certainly know enough to take action. And while I 
appreciate and share the majority's concerns about this Takata 
crisis, I am disappointed by its lack of action.
    Auto safety is not a partisan issue. However, even after 
the GM ignition switch issues; the Takata airbag ruptures; and 
even going back to the Toyota sudden acceleration problems, 
this committee has failed to take appropriate legislative 
action.
    Earlier this year, Subcommittee Ranking Member Schakowsky 
and I, with a number of other members of this subcommittee, 
introduced the Vehicle Safety Improvement Act of 2015. Many 
provisions in our bill would address problems that occurred in 
the Takata airbag and the GM ignition switch recalls.
    The National Highway Transportation Safety Administration 
(NHTSA) has received much of the blame in both the GM recall 
and this Takata recall. But it is clear that NHTSA simply does 
not have the resources and authorities it needs to protect 
drivers and passengers and to hold automakers and automobile 
parts suppliers accountable for safety defects. Our bill 
provides more resources and tools to NHTSA, increasing fines 
for manufacturers that violate vehicle safety laws.
    Also in both cases, automakers and parts suppliers failed 
to timely produce critical information that may have helped 
NHTSA identify problems earlier. Our bill improves the Early 
Warning Reporting System by making more reported information 
public and requiring manufacturers provide significantly more 
information about any fatal incident involving a safety defect.
    Chairman Burgess, I appreciate your interest in continuing 
oversight of these recalls. But we don't need any more 
investigation to begin our legislative work.
    I hope that we can work together to move forward with our 
bill to keep our citizens safe on the roads.

    Mr. Burgess. Chair thanks the gentleman, gentleman yields 
back. That concludes member opening statements. Chair would 
remind members that, pursuant to committee rules, all members' 
opening statements will be made part of the record.
    We do want to thank all of our witnesses for being here 
today, taking the time to testify before the subcommittee. 
Today's hearing will consist of two panels. Each panel of 
witnesses will have an opportunity to give an opening 
statement, followed by a round of questions from members. Once 
we conclude with the questions on the first panel, we will take 
a very brief recess to set up for the second panel.
    Our first panel today will consist of a single witness, 
Administrator Mark Rosekind of the National Highway Traffic 
Safety Administration. Dr. Rosekind, we appreciate you being 
here today, and you are now recognized for 5 minutes to 
summarize your opening statement.

STATEMENT OF MARK R. ROSEKIND, ADMINISTRATOR, NATIONAL HIGHWAY 
                 TRAFFIC SAFETY ADMINISTRATION

    Mr. Rosekind. Chairman Burgess, Ranking Member Schakowsky, 
and members of the subcommittee, thank you for the opportunity 
to provide an update on NHTSA's efforts to address defective 
Takata airbags. There is a more detailed explanation of our 
efforts in my prepared statement, but let me summarize what 
NHTSA has done, and what we are doing. All of NHTSA's actions 
are focused on achieving one main goal, the only acceptable 
goal, a safe airbag in every American vehicle.
    On May 19 Secretary Fox of NHTSA announced that Takata had 
filed four defect information reports with the agency, covering 
an estimated 33.8 million defective airbag inflators that 
Takata had shipped to automakers. Takata, as an original 
equipment supplier, does not know into which vehicles those 
inflators were installed. Prior to the filing, automakers had 
recalled a total of 18.5 million vehicles. All of the May 19 
filed defect reports involved recalls that are national in 
scope.
    Since May 19, 11 auto manufacturers have been scouring 
their own records to determine which vehicles are affected. To 
date, automakers have filed additional recalls, bringing the 
total to an estimated 30.4 million vehicles. During that May 19 
announcement, NHTSA made clear the consumers might have to wait 
to determine if their vehicles were covered by the expanded 
recall while automakers made their own recall filings. As you 
know, Takata's defect filings were a necessary first step 
before the automakers would initiation their own filings. The 
automakers' filings contained the detailed make and model 
information and Vehicle Identification Number, or VIN numbers, 
that allow individual vehicle owners to determine if they are 
affected by this recall. Obviously this delay is frustrating, 
and if there is any way to avoid that anxiety, it would have 
been done.
    In NHTSA's public communications philosophy, and like all 
of our other interactions, we followed a very simple 
philosophy, to make information available to consumers as 
quickly as possible. To that end, NHTSA has established a 
microsite called Recalls Spotlight. It is located at 
safercar.gov, and includes key consumer information on recall 
issues of high public interest. It includes continuously 
updated information on the Takata recalls. On May 19 and 20, 
after the DOT NHTSA announcement, more than 1.5 million people 
conducted VIN lookup searches on safercar.gov, including nearly 
one million on May 20. On May 19, Secretary Fox also announced 
a Consent Order with Takata that gives NHTSA oversight into the 
company's testing, requires its full cooperation with our 
investigation, and, importantly, gives us the ability to fully 
evaluate the adequacy of proposed remedies.
    It was also announced that NHTSA has launched an 
administrative process, a coordinated remedy program, to 
prioritize and coordinate the actions of Takata and the 
manufacturers. NHTSA is using this authority provided under the 
Safety Act, and by Congress in the Tread Act, for the very 
first time. We need to acknowledge Congressman Upton for 
driving that vision, and working with others to provide a 
mechanism to address the challenges and circumstances that are 
now faced in this recall.
    Many Americans have asked whether we can trust remedy 
inflators any more than the defective inflators. NHTSA's 
Consent Order with Takata, the coordinated remedy program, and 
NHTSA's own testing, are all essential actions designed to 
provide full and final answers to that critical question. NHTSA 
will continue pursuing answers until the American people can 
have a safe airbag in every vehicle.
    There continues to be great interest in establishing the 
root cause of these defects. While some factors appear to have 
a role, such as time and absolute humidity, the full story is 
not yet known, and a definitive root cause has not been 
identified. In my recent experience as an NTSB Board member, 
and a veteran of many major transportation investigations, it 
may be that there is no single root cause, or the root cause 
may never be known. Secretary Fox addressed this directly on 
May 19, clearly stating that uncertainty cannot stop NHTSA from 
acting to protect safety. In areas of uncertainty, NHTSA must 
act, focused firmly on our safety mission.
    Lastly, whatever the final numbers turn out to be, this may 
be the largest, most complicated consumer safety recall in our 
Nation's history. Fixing this problem is a monumental task. It 
will require tremendous effort from the auto industry. It will 
also require tremendous effort from NHTSA. And yet the agency 
must manage this enormous and necessary task with too few 
people, and insufficient funding. The same people managing the 
Takata recall must also continue to analyze thousands of 
consumer complaints, investigate scores of other potential 
defects, and oversee more than 1,200 other recall campaigns 
that automakers and equipment manufacturers now have underway. 
NHTSA must accomplish this task with a defects investigation 
budget that, when adjusted for inflation, is actually 23 
percent lower than its budget 10 years ago.
    NHTSA needs your help to protect the safety of Americans on 
our country's roads. The President has submitted a budget 
request that would fund significant improvements in NHTSA's 
defect investigation efforts, providing the people and 
technology needed to keep Americans safe. The Administration 
has proposed the Grow America Act, which would provide stable, 
increased funding for our agency, and important safety 
authorities to help us in our mission. As proposed, the Grow 
America Act, and in a recently introduced bill, if imminent 
hazard authority had been available to NHTSA, this hearing 
would have a very different focus. At NHTSA we address safety 
risks every day.
    I urge the members of the subcommittee and your colleagues 
in Congress to help NHTSA address these safety risks and keep 
the traveling public safe on America's roadways. Thank you.
    [The prepared statement of Mr. Rosekind follows:]
    
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]    
    
    
    Mr. Burgess. Chair thanks the gentleman. We will move into 
the question-and-answer portion of the hearing. I start by 
recognizing myself 5 minutes for questions.
    And, Mr. Administrator, again, thank you very much for 
being here. Thank you for making yourself available to me both 
in person, on the telephone, as you have worked your way 
through this process. Just so that people are clear, the VIN 
number that we keep talking about, the Vehicle Identification 
Number, people could access that number at the lower left hand 
of their windshield or inside the driver's door?
    Mr. Rosekind. I hope they are paying attention to you. They 
can find that VIN in that location, and go to safercar.gov to 
see if their vehicle is in the recall.
    Mr. Burgess. And that is the Web site, safercar.gov. Now, 
if someone checked their VIN number and got the all clear on 
May 1, do they need to do anything further, or are they good to 
go?
    Mr. Rosekind. We suggest people check that on a weekly 
basis.
    Mr. Burgess. You issued the initial recall in the middle 
part of May. How quickly can people assume that you are getting 
the uploaded information into your Web site so that, if they 
check the Web site, they can be confident that the information 
they get is current?
    Mr. Rosekind. So--thank you for that question, because 
clarity for consumers is critical here, and Takata had to file 
their defect reports before the auto manufacturers could put 
together their information. And what is clear is we can't just 
get numbers. They have to be accurate. So they have to do their 
due diligence, and then we have to do ours. At this point, we 
have--seven out of the 11 manufacturers have provided the 
information, which are now covering up to 30.4 million 
vehicles, but weekly people should be checking.
    Mr. Burgess. So, let me just ask you this, is there 
anything else that you can do, or we can do, to make certain 
that this process is clearly and effectively communicated to 
the driving public?
    Mr. Rosekind. I think you just did part of it, and we are 
trying to do the same thing, which is give people safercar.gov, 
and helping them on a weekly basis go. I do have to acknowledge 
the auto manufacturers have stepped up and really provided an 
accelerated production of those numbers, which we are checking, 
so they are getting up there very quickly.
    Mr. Burgess. OK, but then that brings up the other point, 
the--their ability to access the remedy inflators. Where do we 
stand with that, the production and distribution of those 
remedy inflators? Where are you?
    Mr. Rosekind. Again, very important for people to 
understand the whole process. And I won't give the whole list 
now, but part of what we are--this whole hearing is really 
addressing is, before May 19, there was denial of a defect. 
There was mostly a focus on root cause. There was concern about 
the supply chain, whether the remedy even worked or not. So 
that all changed on May 19.
    Mr. Burgess. Well, let me stop you there. We are no longer 
concerned if the remedy works?
    Mr. Rosekind. I am sorry?
    Mr. Burgess. We are no longer concerned if the remedy 
works?
    Mr. Rosekind. We absolutely are, and that is what I am 
saying. On May 19 the focus changed. There has been 
acknowledgement by Takata that there is a recall, and they are 
all national. The second is a Consent Order with NHTSA, which 
allows us to be directly involved in oversight for testing to 
make sure that the remedy is going to be adequate or not. And 
then the third part of that is a coordinated remedy program, 
which goes to your question, and that is now NHTSA is in the 
driver's seat, and we will coordinate and prioritize to make 
sure that the supplies are available, and that they get out 
there as quickly as possible.
    Mr. Burgess. But just so people are clear, to cut through 
any of the talk surrounding this, are the replacement devices 
safe? Not safer, but safe, unequivocally safe.
    Mr. Rosekind. And thank you, because, again, that is a very 
important, confusing point. People need to look up their VIN 
number now, and if they have a recall to go get a replacement 
inflator, they need to do that. And we have got to point out, 
there are millions of airbags that are out there every day 
protecting people, including millions by Takata, that are 
functioning properly. We are trying to get the defective ones 
off.
    And so, yes, they need to go get it fixed. What we will do 
is identify if there is an interim remedy, because you are 
correct, some of these may not have the longevity that is 
needed to make sure that it is a lifelong, for the entire life 
of the vehicle, fix.
    Mr. Burgess. So, you know, what am I supposed to do? One of 
my kids calls me and says, hey, I got a bad VIN number, but 
good news, they have got a replacement, and I am going to get 
it fixed. Am I OK with that? Am I OK letting my child drive 
that car?
    Mr. Rosekind. And your dealer should be able to tell you 
whether they have a fix that is long term, or they have an 
interim remedy. And the bad news is, if there is an interim 
remedy, you should get a call back from the dealer when it is 
time to get that fixed for the long term.
    Mr. Burgess. OK. So even someone who gets it fixed may not 
really have it fixed?
    Mr. Rosekind. And the dealer better make that clear.
    Mr. Burgess. I just want to ask you one thing quickly. I 
was being interviewed on a national business show the other--or 
last week, and they pointed out to me that in New York, I guess 
is where the show originated, that they called dealers around 
the town, and they said they were laughed at when they said, 
can we bring our vehicle in to get our airbag changed, that 
they did not have a supply.
    So I did the next logical thing, and called my local guy 
who does all things cars back in the district, and he actually 
provided me some--what I think is some--this was recent 
information. Number one, no one is reporting any panicked or 
irate customers as a result of the recall. I do remember a few 
months ago some dealers were complaining about mad customers. I 
am going to assume this was when there was no process in place. 
And only one dealer had a real volume for replacements. Another 
one had maybe 1,000 that needed to be replaced, but no one was 
bringing their vehicles in. And that is, and will continue to 
be, a problem, that people aren't recognizing that their 
vehicle needs to be fixed.
    My time is expired. I will recognize the gentlelady from 
Illinois, 5 minutes for your questions, please.
    Ms. Schakowsky. I think it is really important, what you 
said earlier, not all of the VIN numbers are up yet, is that 
true, so that people need to be checking. They may be driving 
a--with a Takata airbag that will, and their vehicle may be 
recalled, but it is not up online right now, right?
    Mr. Rosekind. That is correct.
    Ms. Schakowsky. OK. So----
    Mr. Rosekind. We have seven out of the 11 manufacturers----
    Ms. Schakowsky. OK. So people should not necessarily feel 
secure, but they should just keep checking. I wanted to talk 
about one of the authorities that would be in the Vehicle 
Safety Improvement Act, and that would be to give NHTSA more 
authority itself for recalls. The first known Takata airbag 
inflator rupture occurred in 2004, May 2004. That was 11 years 
ago. And months after NHTSA called for national recalls, which 
was last November, Takata has finally relented, because it is 
still within their authority to do that. NHTSA currently has no 
authority to take emergency action, even in cases where defects 
are known, and there is strong and immediate risk of serious 
injury or death.
    So, Dr. Rosekind, in November of last year NHTSA called for 
this national recall of certain vehicles with defective 
driver's side airbags. Takata had refused to conduct the 
national recall. I know you weren't there at the time, but if 
NHTSA had had the authority to mandate emergency recalls, do 
you think the agency--or let me put it this way. Would you have 
used it, with regard to Takata?
    Mr. Rosekind. And thank you for the rephrasing. Starting at 
my confirmation hearing, I made it clear NHTSA will use every 
tool available. If imminent hazard authority had been 
available, we would have used it.
    Ms. Schakowsky. Thank you. The--as I said, the--this 
legislation does allow for imminent hazard authority to recall, 
and NHTSA has testified before the subcommittee in the past, 
asking for that authority, so I guess you have already stated, 
you agree with the need for that authority?
    Mr. Rosekind. Absolutely.
    Ms. Schakowsky. And would it have been beneficial to NHTSA 
in carrying out its mission to reduce deaths, injuries, and 
economic losses resulting from motor vehicle crashes?
    Mr. Rosekind. Absolutely. And just to highlight, what you 
are focused on, as an imminent hazard, would have allowed us to 
get these airbags off the road. And there are still procedures 
to make sure everything is done transparently, officially, but 
we wouldn't have been waiting. There could have been lives 
saved, and people--injuries prevented with imminent hazard 
authority.
    Ms. Schakowsky. There are a number of other provisions in 
the Vehicle Safety Improvement Act. It would double the funding 
for NHTSA. So, first, let me have you comment on that, in terms 
of the resources that you have to do the job that needs to be 
done, and--but I think Americans all expect is being done.
    Mr. Rosekind. At my confirmation hearing in December I 
highlighted people, technology, and authorities, that we needed 
to look at those. I got to NHTSA and found out it was more 
under-resourced than I had ever imagined from the outside. And 
since I have been there, we have done everything we are--we 
can, and will be doing with what we have available to us.
    I could give you a list of 29 different things that have 
already gone on, process improvements, et cetera. At some point 
you need people and authority to get the job done, and that is 
a concern. I highlighted, even in December, there are eight 
people looking at 80,000 complaints coming in, and there are 
now eight people in the recall group that have to do with this 
recall, 34 million vehicles, and the other 1,200 campaigns that 
are going on at the same time.
    Ms. Schakowsky. I think it actually would be helpful to 
this committee that, if you had additional resources, to tell 
us exactly how that would be used, and how then it would impact 
consumer safety. So I would appreciate seeing that.
    Mr. Rosekind. And I would be happy to do that, because, in 
fact, in the President's 2016 proposal, we have identified 
what--our request for enhanced funding. So we could actually 
talk about a trend analysis division, a special investigation 
division for defects. We can provide that to you.
    Ms. Schakowsky. I would appreciate it. The legislation that 
some of us are co-sponsoring, it would increase civil 
penalties, it would limit--eliminate most statutory maximum 
penalties to make sure that bad actors have every incentive to 
get unsafe vehicles off the road. It would also make sure 
that--it would eliminate what I think is really the farce of 
regional recalls. Wonder if you could comment on those 
provisions.
    Mr. Rosekind. Sure. Just as far as the cap goes, Grow 
America goes to 300 million, yours has no cap. Clearly the 
message there is that $35 million is not enough to really get 
an effect, so anything that gets us to 300 million or beyond 
would be great. And I think, as far as regional recalls, my 
perspective is that everything is national.
    Ms. Schakowsky. Good. Thank you. I yield back.
    Mr. Burgess. Gentlelady yields back. Gentlelady's time is 
expired. Chair recognizes the chairman of the full committee, 
Mr. Upton, 5 minutes for questions, please.
    Mr. Upton. Thank you, Mr. Chairman. And, again, we welcome 
your appearance before us, and wish you all the best. I want 
you to know that I have made an inquiry--I don't know what the 
Appropriation Committee did with regard to the NHTSA budget, 
but I am--I will find out soon.
    Prior to the May 19 announcement, what efforts did you do 
to coordinate with the auto manufacturers so that they could 
identify the VIN numbers impacted by the recall?
    Mr. Rosekind. And before I go specifically to that, let me 
just say there were a lot of actions and inactions before May 
19, so it has already been raised here that Takata was 
pressured to go for a national recall, denied any defect. We do 
have to acknowledge----
    Mr. Upton. We saw that in December back here too, before 
you were on board.
    Mr. Rosekind. That is exactly--and the auto manufacturers 
stepped up to actually take on those recall service campaigns 
and other things, even though Takata was denying. So there was 
some action before that.
    Mr. Upton. So just to use my own little personal 
experience, I don't do this very often, but with my incident 
coming back for the--to Michigan for the Memorial Day break, so 
I did plug in to safercars.com with my VIN number, and I am not 
sure that we still can determine today it was a Ford Explorer, 
'06, and I can't really tell today even if it was a Takata 
airbag, or TRW, or whoever it was. The information was not 
readily available when I got online last week.
    Mr. Rosekind. And that is why the information that is 
coming back at safercar.gov is really just called to get 
recalled or not. It won't give you the specific----
    Mr. Upton. Yes, it didn't have it on the recall list.
    Mr. Rosekind. Yes, which means you would be clear if it 
wasn't there as a recall.
    Mr. Upton. Although I am supposed to be checking every 
week, is what you are saying?
    Mr. Rosekind. On a weekly basis. Which, by the way, is a 
good thing to do anyway because of the number of recalls that 
are coming out, is just to check that on a regular basis. 
Airbags aside, that is a good source to have bookmarked for you 
to go back.
    Mr. Upton. So the auto manufacturers really did step up, 
then, is what you are saying?
    Mr. Rosekind. And----
    Mr. Upton. All of them?
    Mr. Rosekind. And that was to--again, previously, when 
Takata denied, the manufacturers stepped up to look at recalls 
and what they could do. To your question specifically, we had 
contact with them the day before to let them know something was 
coming related to the defect so they would have a heads up, and 
since then have been in contact with them about the 
coordination that is coming forward.
    Mr. Upton. So you and I talked in advance of the 
announcement. And what is the timetable--what is the goal, the 
timetable, for completely resolving the issue? Being able to 
identify which vehicles have these defective airbags, getting 
them replaced, making sure that the owners are there. What is 
your hopeful timeframe for this to be resolved, and we can move 
to the next issue?
    Mr. Rosekind. At this point, I believe if anybody gave you 
a number, they don't know what they are talking about. Here is 
our plan to get there, and that is--we have already initiated 
contact and had meetings with both the auto manufacturers and 
suppliers, other meetings bringing all of them together. That 
will create a plan that will look at the effectiveness of the 
remedy, the supply, and try--and basically getting to 100 
percent recall. We hope to have a public hearing by the fall 
that will lay all of that out, all three of those elements.
    Mr. Upton. What steps have you taken to, you know, has 
NHTSA taken to ensure that the propellant safety and evaluation 
for the integrity of the studies and testing being submitted to 
NHTSA by various parties? That seems to be a real element here.
    Mr. Rosekind. Yes. And, again, thank you for highlighting 
that, because part of the Consent Order actually allows NHTSA 
to directly focus the testing, so we can make sure that goes to 
both the adequacy of the remedy, as well as for root cause. So 
now we have some direct oversight and involvement with that. 
Before we were just on the receiving end. Now we can actually 
direct. And, as you know, everybody was focused on root cause, 
which is still not determined, nobody focusing on the remedy.
    Mr. Upton. So when someone has one of these defective 
airbags, they have to replace the whole thing? They can't 
replace just the propellant, is that right? They have got to 
take the whole thing out, and put a whole new device in with a 
different propellant, is that right?
    Mr. Rosekind. That is correct.
    Mr. Upton. OK. Thank you. Thank you very much for being 
here. Yield back.
    Mr. Burgess. Chair thanks the gentleman. Chair recognizes 
the ranking member of the full committee, Mr. Pallone, 5 
minutes for questions, please.
    Mr. Pallone. Thank you, Mr. Chairman. On February 20 of 
this year NHTSA sent a letter to Takata, informing the company 
that its failure to cooperate with NHTSA's investigation of the 
airbag defect, as well as Takata's prior knowledge of the 
defect, would result in fines of $14,000 per day for each day 
Takata failed to cooperate. By the time those fines were 
suspended under the Consent Order last month, Takata had been 
fined about $1.2 million. So, Doctor, how much of the 1.2 
million that Takata owes in fines has the company paid to 
NHTSA?
    Mr. Rosekind. Basically, with the Consent Order, we made 
sure that the investigation continues, as well as the potential 
for future penalties. And so, at this point, nothing has been 
collected because we are looking at an open investigation with 
potentially future penalties to be collected.
    Mr. Pallone. So when do you expect that the penalties will 
actually be paid to the agency?
    Mr. Rosekind. That could be at any time. And part of that I 
think will come as the investigation continues. We are focused 
right now on the safety element of it. As it unfolds there may 
be need for, again, further penalties, and I am sure that would 
be part of the package that would be----
    Mr. Pallone. I was going to ask you about further 
penalties, but you obviously think you do--there is a 
possibility of additional civil penalties against Takata?
    Mr. Rosekind. Yes.
    Mr. Pallone. OK. A Reuters article last week cited a source 
within Takata, explaining that the daily fine was a factor 
motivating Takata to agree to a national recall, but it still 
took 3 months of daily fines to get Takata to agree. Are 
financial incentives an effective means of ensuring compliance 
amongst manufacturers, in your opinion?
    Mr. Rosekind. No question. And I think from the earlier 
question, going from 35 to 300 or no cap is critical. If I can 
take just a moment, I would highlight that there was the 
penalty, there was a preservation order, and, frankly, NHTSA 
was working on a unilateral program to go after this that we 
made sure was communicated to Takata as well.
    Mr. Pallone. Do you believe that increasing the size of the 
statutory penalties would have allowed NHTSA to put more 
pressure on Takata and other automakers and, in turn, to reach 
an agreement to conduct a national recall sooner?
    Mr. Rosekind. No question.
    Mr. Pallone. OK. Last year GM was fined the statutory 
maximum of $35 million for its failed handling of the ignition 
switch recall. Many regulators and advocates, including 
Transportation Secretary Anthony Fox, asked Congress to raise 
or eliminate those statutory maximums in order to send a 
stronger message to bad actors. I mean, it is impossible to put 
a price on the cost of a serious injury of a loss of life. No 
financial penalty or compensation can bring back a family 
member, but stronger financial incentives can go a long way in 
deterring manufacturers from hiding defects and not cooperating 
with Federal investigations.
    So, you know, as I mentioned, Congresswoman Schakowsky and 
others on the committee have introduced the Vehicle Safety 
Improvement Act, which would not only raise per violation civil 
penalties, but also eliminate most statutory maximum penalties. 
So do you believe strong financial penalties would discourage 
automakers and parts suppliers from hiding possible defects, or 
incentivize quicker action from manufacturers?
    Mr. Rosekind. Absolutely.
    Mr. Pallone. All right. And, lastly, I wanted to ask you, 
would increased fines make automakers more likely to cooperate 
with NHTSA investigations?
    Mr. Rosekind. Yes.
    Mr. Pallone. All right. Thank you very much. Thank you, Mr. 
Chairman.
    Mr. Burgess. Chair thanks the gentleman, gentleman yields 
back. Chair recognizes the gentlelady from Tennessee, 5 minutes 
for questions, please.
    Mrs. Blackburn. Thank you, Mr. Chairman. And, Mr. Rosekind, 
I thank you so much for taking your time and being here. Let us 
go back to your November 18 second special order to Takata, 
where they were to come to you with information--further 
information about their propellant mix. And what we would like 
to know is what you have been given, what you know about that 
mix, what is the specific use of that mix in the replacement 
parts, or the remedy parts, as you call them, and in new 
vehicles?
    Mr. Rosekind. And I can provide as much technical 
information as you would like. What you have identified is one 
of the special orders that actually triggered the daily 
penalties that started, because we basically had 2.4 million 
documents dumped on us with all of that information, and tried 
to understand where the meaningful pieces were. So we have some 
of the meaningful pieces now identified, and we can certainly 
bring you as much technical information that was provided.
    Mrs. Blackburn. Are you satisfied with the information that 
Takata has provided to you on their propellant mix?
    Mr. Rosekind. We are still--we are working our way through 
that information. They have been open about----
    Mrs. Blackburn. OK.
    Mr. Rosekind [continuing]. Providing us testing data----
    Mrs. Blackburn. OK.
    Mr. Rosekind [continuing]. But the information that you are 
asking about was millions and millions of pages that have grown 
to about 2.4, so we are still making our way through that.
    Mrs. Blackburn. OK. Are they being forthcoming in bringing 
clarity to that? We want to know what the mix is, the 
propellant mix is. So are they satisfying the questions that 
will--that consumers will have when they want to know--this 
component that is in their vehicle that is to make the vehicle 
safe now explodes, it causes injury, and the question is, have 
they arrived at something that is going to make certain that 
indeed it is safe?
    Mr. Rosekind. And I would say they will now. That us part 
of the consent----
    Mrs. Blackburn. OK.
    Mr. Rosekind [continuing]. Order, that they are required to 
provide that information.
    Mrs. Blackburn. So you are satisfied? I think if you could 
just have someone from your team provide a summary so that we 
will have that for the record, that would be helpful to us for 
future hearings and for legislation.
    Also, let me go to the point that was made--back to that 
December hearing we had, that ammonium nitrate was used as a 
propellant in the 1990s. And--so what we would like to know, 
have you all found any evidence of ruptures from the--that 
occurred in the '90s? And, if not, does NHTSA have any insight 
into why not?
    Mr. Rosekind. And that is a good question. Again, I will go 
back and make sure that that is part of the information that we 
provide you. What is really important about the Consent Order 
is we now get to be in the driver's seat to direct this kind of 
testing. We will be looking at it both historically, and see 
how that informs what we need to do now.
    Mrs. Blackburn. OK. We would love to have that as a follow 
on, if you will, as to what occurred in the '90s, and as you go 
back and do a revisit of the information that you have, that 
would be helpful.
    One last thing, you mentioned that the auto manufacturers--
and Chairman Upton mentioned that they had been doing their 
part in meeting this. I want to know if you are satisfied with 
how the dealers are being compensated for this, if they are 
being made whole. Because if everyone is taking their car in 
for the replacement, that is a lot of loaner cars, that is a 
lot of man hours. So would you speak to that?
    Mr. Rosekind. Actually, I would suggest you ask that of the 
individuals on the next panel, because we would be focused on 
that only if it interfered with the recall.
    Mrs. Blackburn. OK. We are going to ask the next panel 
that, but I wanted your insight also. And with that, Mr. 
Chairman, I yield back.
    Mr. Burgess. Chair thanks the gentlelady, gentlelady yields 
back. Chair recognize the gentleman from Massachusetts, 5 
minutes for questions, please.
    Mr. Kennedy of Massachusetts. Thank you very much, 
Administrator. Great for--of you to be here, and I appreciate 
your service to the country, and your--willing to testify 
today. I want to touch base with you a little bit. You have 
heard some of my colleagues already mention the Vehicle Safety 
Improvement Act, and I want to touch on that, and particularly 
the need for safety upgrades for used cars.
    Used car sales in March and April of this year reached more 
than three million cars sold for each month, but purchasers of 
used cars now face major loopholes when it comes to auto 
safety. Most do not know it. The Vehicle Safety Improvement Act 
would take two concrete steps toward making our used car market 
safer. First, the bill would require the buyer's guide window 
form to include information about a vehicle's history of damage 
and recall or repair history. Second, the bill would also 
prohibit dealers from selling or leasing used vehicles subject 
to a recall until the dealer has repaired the defects.
    So, Dr. Rosekind, I--concerned that consumers have an 
implicit perception that used cars are safe and free of defect, 
and that dealers have made all necessary repairs. Is that true, 
or what light can you shine on that problem?
    Mr. Rosekind. This is part of the Grow America proposal. It 
is part of what you are describing, and I guess I just--I can't 
imagine that you would sell a new car, used, leased, et cetera, 
if you knew there was a defect involved, not to have it fixed 
before you put it in somebody's hands. Just seems like we don't 
have the system working properly.
    Mr. Kennedy of Massachusetts. I would agree. So, Doctor, a 
purchaser of a used car can find some vehicle history 
information through the National Motor Vehicle Title 
Information System, but that information is available only if 
the purchaser knows where to find it, and pays a fee. So do you 
agree that purchasers of used cars can benefit from knowing 
that a used car they intend to purchase has been previously 
junked, salvaged, or marked as a total loss?
    Mr. Rosekind. Any information that is going to help them 
determine the safety of that vehicle is going to be useful to 
that consumer, no question.
    Mr. Kennedy of Massachusetts. So the Vehicle Safety 
Improvement Act requires information from vehicle history 
report to be made available through the National Motor Vehicle 
Title Information System to be included in a buyer guide window 
form. Do you think that is a smart provision to go for?
    Mr. Rosekind. Every piece of safety information is going to 
be helpful.
    Mr. Kennedy of Massachusetts. Finally, sir, current dealers 
are prohibited from selling or leasing new vehicles subject to 
recall unless a dealer makes the necessary repairs, but the 
same regulation does not apply to used cars, which means that 
used cars may be sold or leased to consumers with unrepaired 
defects. The average recall completion rate for vehicles is 
about 75 percent, meaning that a full 25 percent of all 
recalled cars are not being repaired. For that Takata airbag 
recall, the completion rate so far has been much, much lower.
    In many of these cases the cars are not being repaired 
because the current owner of the vehicle doesn't know anything 
about the recall. So what efforts does--has NHTSA undertaken to 
increase the awareness of used car buyers and lessees about the 
potential safety defects, and what does NHTSA--or what 
obstacles does NHTSA face in getting this information out to 
consumers?
    Mr. Rosekind. I don't think there is any question this is a 
huge part of the whole system, and we have--Secretary Fox and I 
have really emphasized finding defects is great, but if you 
don't get them fixed, doesn't really matter. So we actually 
held, at the end of April, an event called Retooling Recalls, 
asking the industry for new ideas, and have set the standard as 
100 percent target to get recalls done.
    Mr. Kennedy of Massachusetts. So do you agree, then, that 
the provision of the Vehicle Safety Improvement Act that 
prohibits the sale or lease of used cars until any defect has 
been remedied would help increase recall completion rates?
    Mr. Rosekind. Absolutely.
    Mr. Kennedy of Massachusetts. And would it make drivers of 
used cars safer?
    Mr. Rosekind. Absolutely.
    Mr. Kennedy of Massachusetts. Are there other tools that 
would help improve the safety of those cars? What would they 
be?
    Mr. Rosekind. And I would say, from our even in April, 
there was a great list of possible things that could be done, 
and we are looking at all of them. But we had manufacturers 
come in and talk about some of their new strategies, and there 
were some new things that only one manufacturer is doing. We 
need to figure out what NHTSA could do to get those basically 
across the entire industry.
    Mr. Kennedy of Massachusetts. And, Doctor, how can this 
committee be of any service to you as you try to get that 
information out?
    Mr. Rosekind. Frankly, I think the bill that has been 
introduced and Grow America Act are two of the most critical 
things right now, as far as our authorities and budget. And 
then directly there is the budget, which allows us not just 
people, but the authorities, and other kinds of opportunities.
    Mr. Kennedy of Massachusetts. And, briefly, I only have a 
short period of time left, but if--did I hear you say earlier 
in your testimony, Doctor, that there were--you had eight staff 
that were working on this recall of 34 million vehicles, and 
that same staff of eight people working on 1,200 other recalls?
    Mr. Rosekind. There are 51 in the Office of Defect 
Investigations. Eight of them look at the 80,000 complaints 
that come in. A different eight are handling this recall.
    Mr. Kennedy of Massachusetts. But--so eight people----
    Mr. Rosekind. Correct.
    Mr. Kennedy of Massachusetts. OK. Thank you. I yield back.
    Mr. Burgess. Chair thanks the gentleman, the gentleman 
yields back. Chair recognizes the gentleman from New Jersey, 
Mr. Lance, 5 minutes for questions, please.
    Mr. Lance. Thank you, Mr. Chairman. Dr. Rosekind, I went 
online regarding my own situation, and the Web site is 
safecar.gov?
    Mr. Rosekind. Safercar.gov.
    Mr. Lance. Spell that out for the public, please.
    Mr. Rosekind. Thank you. S-a-f-e-r-c-a-r-dot-g-o-v. 
Safercar.gov.
    Mr. Lance. And it has on it how many millions of VIN 
numbers?
    Mr. Rosekind. The total number of VINs I can't tell you 
specifically. For the Takata right now, we are up to 30.4 
million vehicles, seven manufacturers.
    Mr. Lance. And I know you are working as quickly as you 
can, but at the moment, not all of the VIN numbers are on that 
site, and I was just lucky that my VIN number had already come 
up. But you are informing the American people, through this 
committee hearing, which is being televised across this 
country, that the American people should go on that Web site 
frequently?
    Mr. Rosekind. Weekly.
    Mr. Lance. Weekly? Now, can you estimate, Dr. Rosekind, as 
to when you might have all of the numbers up on the site? And I 
know that is a difficult question, and I am just asking, is 
there a timeframe that you think you might be able to have?
    Mr. Rosekind. We have seven out of 11, and the 
manufacturers are working quickly. I would hope within the next 
2 weeks we should have that complete data set.
    Mr. Lance. So within the next 2 weeks you----
    Mr. Rosekind. That is the plan.
    Mr. Lance. Very good. Now, I didn't ask this, because then 
I called the dealer, and the dealer was very, very cooperative, 
and said that he thought he would have a new airbag within 1 
week to 4 weeks, and did I need a loaner car? But I didn't 
think to ask, should the American people ask, is this for the 
driver or for the passenger? And I have no idea at the moment, 
and perhaps I should, as to whether in my personal situation it 
is the driver or the passenger. And, as I understand it, in 
some situations, it is both. Could you enlighten the committee, 
and through the committee the American people, on that aspect 
of all of this?
    Mr. Rosekind. Safercar.gov will tell you what the recall is 
for specifically. Driver, passenger, both, it will give you 
that information so you will know what to ask the dealer, don't 
have to rely--you don't have to rely on the dealer to tell you 
what needs to be fixed.
    Mr. Lance. And are there situations where there will be the 
need for a new airbag for both the driver and the passenger in 
the same automobile?
    Mr. Rosekind. That could be.
    Mr. Lance. Do the auto manufacturers themselves have the 
responsibility, I trust, to inform those who have purchased 
their automobiles of these potential defects?
    Mr. Rosekind. And they make that information both through 
safercar.gov, they are the ones who provide us the make and 
model and VIN numbers, as well as--most of them provide that on 
their own Web sites as well.
    Mr. Lance. And are they mailing letters to those who own 
the vehicles?
    Mr. Rosekind. Yes. There are recall letters that are 
officially labeled for people to know specifically what is 
being recalled.
    Mr. Lance. And do you know, Dr. Rosekind, how many of those 
letters have gone out so far?
    Mr. Rosekind. That I would have to look into and get back 
to you.
    Mr. Lance. Thank you. The Wall Street Journal says today, 
based upon a German study, that there may be at least four 
factors that could lead to all of this, and the factors include 
damaged or problematic inflator components, the positioning of 
the inflator and airbag system in vehicles, prolonged exposure 
to heat and humidity, and manufacturing variability. Are you 
now analyzing the new study from the Germans as to whether--
what they suggest may be true?
    Mr. Rosekind. So we are looking--we are both aware of that 
report, and looking at that, plus there are multiple folks 
doing testing. You are going to hear from an independent 
testing coalition of the auto manufacturers. Takata is doing 
its own. Automakers are doing their own. The Consent Order is 
going to give us access to all of that data.
    And you have just highlighted, last quick comment, why this 
is so difficult. There are over 10 different configurations of 
the inflator across all the different makes and models. That is 
part of the problem with trying to figure out what the root 
cause has been.
    Mr. Lance. As I understand it, part of this is using 
batwing shaped wafers inside airbags. Would you, through the 
committee, explain to the American people what that means?
    Mr. Rosekind. And that has to do with the shape or design, 
basically, of the propellant container. And that is a perfect 
example of the different design configurations that are in over 
10 different of these inflators. And that is part of the 
problem. In fact, there are some Takata airbags in certain 
manufacturers that have ruptured in some manufacturers', but 
not other manufacturers', cars.
    Mr. Lance. Thank you, you have been very helpful, and let 
me say I look forward to the testimony of the second panel. 
And, Mr. Chairman, I yield back the balance of my time.
    Mr. Burgess. Gentleman yields back. Chair thanks the 
gentleman. Chair recognizes the gentleman from California, Mr. 
Cardenas, 5 minutes for questions, please.
    Mr. Cardenas. Thank you, Mr. Chairman. Thank you, Dr. 
Rosekind, for all of your service, and for answering our 
questions today. Not only for us, but for the people we 
represent throughout the country. I am going to start off by 
talking about the--your administration, to get an understanding 
of how well we are or are not doing, to make sure you have the 
resources to protect the American public--or to help protect 
the American public.
    One estimate puts the number of vehicles on U.S. roads in 
2014 at about 253 million, which is nearly four million more 
than the estimate of 2013. Meanwhile, in spite of the growing 
volume of vehicles, and the increasing complexity of newer 
vehicles, NHTSA's budget has remained relatively flat over the 
past few years. The fiscal year 2016 budget appropriation of 
837 million continues this trend, coming in more than 70 
million short of NHTSA's request.
    Dr. Rosekind, do you believe that the stagnant funding for 
NHTSA, as part of the do more with less culture that has 
resulted from sequestration, has made it harder for the 
administration to do its job of keeping unsafe vehicles off the 
roads?
    Mr. Rosekind. There is no question, where NHTSA is 
addressing safety risks every day, that the budget and 
personnel and authority issues are helping create more risk for 
us. From my confirmation hearing, I have identified--we have 
done, and will continue to do everything internally, process-
wise, procedurally that we can to be more effective, but at 
some point, eight people to look at 80,000 complaints, up from 
45,000 the year before, now you are just talking, you know, 
people that can get the job done.
    Mr. Cardenas. Um-hum. Well, I constantly hear--I have been 
elected to office 18 years at various levels, and I constantly 
hear some of my colleagues talk about fiscal conservativeness, 
and talking about how Government needs to operate more like a 
business. I don't know of too many businesses that responsibly 
act with eight human beings trying to handle 80,000, you know, 
moving parts of issues and constituents. That is not 
efficiency. I think that is--well, it is delinquency, to be 
honest with. And not delinquent on you, but delinquent on us, 
the appropriators. I think we need do--to do a better job of 
protecting the American public, or helping you do your job of 
helping to protect the American public.
    The Office of Defect Investigation, which is responsible 
for screening and reviewing 40,000 consumer complaints per 
year, and conducting investigations of possible defects, had 51 
full time staff in March of 2014, down from 64 in 2002. NHTSA's 
fiscal year 2016 budget request includes a request for funds to 
do--to more than double the number of ODI personnel. Dr. 
Rosekind, is the 837 million that the House Appropriations 
Committee approved for the 2016 fiscal year, is it sufficient 
for increasing the number of ODI personnel?
    Mr. Rosekind. No. That basically flatlines where we are 
today. And----
    Mr. Cardenas. OK.
    Mr. Rosekind. And just to inflate that for you 
appropriately, that 40,000 number was last year. Because of all 
the attention last year, that number is now 80,000 complaints 
coming in.
    Mr. Cardenas. So that is where we----
    Mr. Rosekind. Doubled.
    Mr. Cardenas. So that is where you get to the 80,000?
    Mr. Rosekind. Yes, sir.
    Mr. Cardenas. Thank you. It is clear that additional 
funding sources for NHTSA will be critical to ensure the--
ensuring the administration can keep drivers and passengers 
safe. That is why, in addition to new appropriations 
specifically for NHTSA's vehicle safety programs, H.R. 1181 
would authorize a new vehicle safety user fee. This fee would 
be paid by vehicle manufacturers for each U.S. vehicle 
certified to be Federal--to meet Federal safety standards, 
beginning at $3 per vehicle, and increasing annually to $9 per 
vehicle. But this could potentially generate tens of millions 
of dollars for NHTSA to spend specifically on safety. Dr. 
Rosekind, do you think NHTSA would be able to find efficient 
and effective ways to channel the money raised by such a fee 
into consumer safety?
    Mr. Rosekind. No question. And I think, if anything, it is 
all about the safety mission, I think for the agency, and for 
me, so you give us more resources, and we will give you more 
safety.
    Mr. Cardenas. OK. And, once again, looking at the numbers, 
the number of vehicles on American roads is growing, correct?
    Mr. Rosekind. Yes.
    Mr. Cardenas. And, fortunately and unfortunately, when we 
have better systems of identifying when there is a defect, that 
means that we are much more aware quicker of how many more, in 
this case millions, of people need to be notified and 
coordinated with, et cetera, so that we can actually get them 
in a safer place, with a product that has been identified as 
being defective, correct?
    Mr. Rosekind. No question. We want to move the whole 
industry to a more proactive safety culture. Early 
identification means early intervention. Small numbers, we 
wouldn't be where we are today.
    Mr. Cardenas. Um-hum. Well, I think that Americans take it 
for granted that we do have these systems. Unfortunately, I 
think that too many Americans ignore the idea that Congress is 
not doing its job of properly appropriating so that they are 
safe. Thank you very much.
    Mr. Burgess. Chair thanks the gentleman, gentleman yields 
back. The Chair recognizes gentleman from Kentucky, Mr. 
Guthrie, 5 minutes for questions, please.
    Mr. Guthrie. Thank you, Mr. Chairman, for recognition. 
Thank you for being here today, real--appreciate it. I have a 
question. You mentioned--talking about going to the site and 
putting in your VIN number, that you have the information from 
seven of 11 manufacturers. Is there a timeline you think you 
will have the other four?
    Mr. Rosekind. That was asked earlier, and our plan is to 
have that within 2 weeks, if not sooner. The manufacturers are 
working very quickly.
    Mr. Guthrie. Uh-huh.
    Mr. Rosekind. Not just about getting the numbers. It is 
checking the accuracy, which both they and NTHSA have to do.
    Mr. Guthrie. So that is the process that is taking--OK. 
Takata suggested that the particular make and model of a 
vehicle may be contributing to the inflator defects. Has NHTSA 
reviewed that analysis and come to some conclusion with that?
    Mr. Rosekind. And that is part of the problem with the root 
cause right now. There are not just 10 plus different designs 
of the inflators, but we are looking at different makes and 
models, so that is exactly what the difficulty is. There are 
some Takata inflators in a make and model that has not 
ruptured. The same Takata inflator in a different make and 
model might rupture. So when you think about all the different 
variations you have to look for, that is why it is a challenge 
right now trying to come to a root cause.
    Mr. Guthrie. Yes, but earlier in my life I was a certified 
quality engineer, and so it seems like it is difficult to 
recreate the problem. I mean, you--it is just--you can't figure 
out exactly the root cause, I am sort of getting at.
    And I was, you know, vehicles last a lot longer than they 
used to, and people have them for quite a while. And they tell 
you to change your oil every 3,000 miles, your tires every so 
many thousand, rotate them. Is there any manufacturer or 
vehicle out there that has routine maintenance at all on 
airbags that you know of?
    Mr. Rosekind. That is a very good question. I don't believe 
so, but I will get a specific answer for you. And right now the 
average vehicle is in service for 11.4 years.
    Mr. Guthrie. Um-hum.
    Mr. Rosekind. So even many of the statutes that are out 
there that only go to 10 are surpassed by the vehicles that are 
on the road now.
    Mr. Guthrie. So--I mean, obviously people who buy a vehicle 
expect their airbag to last as long as their vehicle lasts, 
but, as far as we know, there is not a routine kind of 
maintenance or check? It is hard to--I mean, it is one of those 
things it is a destructive test then to check your airbag, and 
you move forward.
    I have a question. Since December 3, the hearing that we 
had in 2014, how many additional fatalities and injuries? You 
might have answered that, but I am not sure I heard that when 
you were speaking.
    Mr. Rosekind. Specifically we are aware of six worldwide, 
people that have lost their lives, and at least 100 injured.
    Mr. Guthrie. And also, Mr. Friedman, you weren't here, 
testified in December that you were going to hire an expert in 
propellant and bag production--airbag production within a week 
of the last hearing. Has that--that has taken place, hasn't it?
    Mr. Rosekind. Yes, it has, and I have tried to identify--we 
have at least four people on staff that know airbags quite 
well----
    Mr. Guthrie. Um-hum.
    Mr. Rosekind [continuing]. But now we have someone with 
particular expertise in the areas we are looking at that has 
been on staff.
    Mr. Guthrie. These four people that know airbags, are they 
part of the eight that you were describing, so they are also 
looking at the other--as well?
    Mr. Rosekind. We have three or four staff people that have 
the expertise, as well as a consultant that is outside that has 
been added. And the three or four staff people are part of the 
eight that we----
    Mr. Guthrie. That you were describing? Well--and--so has 
there ever been an airbag consultant before on--this is new, I 
guess, due to this issue?
    Mr. Rosekind. And this individual was picked specifically 
because of their expertise on the propellant side. Because, 
even with the inflator, if you think about design and all the 
other elements, we are really focused on the chemistry in the 
propellant.
    Mr. Guthrie. Well, thank you, and I appreciate you being 
here. I know we are all here trying to find an answer because 
of the--even since December 6, and the hundreds of injuries, 
and we need to get to the bottom of it, and thank you for being 
here today. And I yield back, Mr. Chairman.
    Mr. Burgess. Gentleman yields back. Chair thanks the 
gentleman. The Chair recognizes the gentlelady from New York, 
Ms. Clarke, 5 minutes for your questions, please.
    Ms. Clarke. Thank you very much, Mr. Chairman. I thank our 
Ranking Member. Dr. Rosekind, thank you for all of your work 
and testimony here today. NHTSA first asked Takata to conduct a 
national recall in November of 2014. Takata responded by 
questioning NHTSA's authority to order the company to undertake 
the national recall. In a December hearing held by this 
subcommittee, Takata reiterated its belief that a national 
recall was unwarranted, although. I should note that many of 
the auto manufacturers extended the recalls anyway.
    Nearly 6 months to the day since the last hearing, we are 
in a much different place, but also 6 months behind where we 
should be in getting these dangers airbags out of our cars. Dr. 
Rosekind, in today's world goods and services cross State lines 
without a second thought. Our cars have an average lifetime of 
11 years on the road, and frequently spend time in all corners 
of the country during their lifetimes. Given the realities of 
the world in which we live today, is it possible for NHTSA to 
guarantee that a regional recall will be sufficient?
    Mr. Rosekind. Our approach has been--my approach has been 
to make sure we focus on national recalls, and that was part of 
the challenge previously, was Takata's denial that there was 
even a defect. And even though manufacturers stepped up, there 
was a wide range of patchwork, basically. Service campaigns, 
some recalls, some regional, some national, it was all over the 
place. May 19 NHTSA took the driver's seat, and quarter rated--
our coordinated remedy will change all of that.
    Ms. Clarke. Yes, I don't think so either. H.R. 1181, the 
Vehicle Safety Improvement Act, would eliminate the farce of 
regional recalls by making clear that all safety recalls of 
motor vehicles and replacement parts must be carried out on a 
national basis. The bill will also allow NHTSA to prioritize 
certain parts of the country when the quantity of replacement 
parts is limited.
    Dr. Rosekind, in the past NHTSA has supported regional 
recalls. Earlier in this hearing you said that, from your 
perspective, recalls are national. Can I then assume you 
support this provision of the Vehicle Safety Act?
    Mr. Rosekind. We are interested in safety for everybody, so 
we start with a national recall.
    Ms. Clarke. Very well. Takada's written testimony explains 
that for two of the Takata airbags being recalled, the recall 
will be regional, and NHTSA will have to order Takada to expand 
the recalls nationally. Will you commit to expanding all of the 
Takata recalls nationally now?
    Mr. Rosekind. And I think it has been interesting to watch 
peoples' response to those two. Those two passenger airbag 
inflators are the most problematic, and so that, basically, is 
trying to ensure that the people at the highest risk get their 
fix as quickly as possible. If you read those defect reports, 
it expected that those will be national.
    Ms. Clarke. So that means that we are looking to have a 
national recall now?
    Mr. Rosekind. With--yes, with a very specific focus to make 
sure in those problematic ones we get those high risk people 
covered as quickly as possible.
    Ms. Clarke. The recalls of Takata airbags began as safety 
improvement campaigns, and regional recalls in all--only 
certain parts of the country with high absolute humidity. As 
NHTSA, Takata and care--car manufacturers learn more about the 
defect, and as inflator ruptures occurred outside those high 
humidity areas, the air--automakers each responded differently. 
Some expanded their recalls to additional States, others 
expanded recalls nationally, and the information for consumers 
was hard to find.
    It seems to me that the regional recalls in this case only 
added to consumer confusion. I believe that conducting national 
recalls from the start, with an allowance for prioritization of 
placement parts to our most vulnerable geographic areas first 
would have lessened the consumer confusion in this case.
    Dr. Rosekind, do you agree that that rollout of the recalls 
could have been handled better from the very beginning?
    Mr. Rosekind. What I am going to do is focus, which 
Chairman Burgess already said, I think you beat me by a month 
or so, being in the chairs, and so I can speak to the last 5 
months, that we are going after national recalls for these to 
make sure every American gets a safe airbag in their vehicle.
    Ms. Clarke. I just want to make sure that we learn from 
this lesson.
    Mr. Rosekind. Absolutely.
    Ms. Clarke. You know, it is very interesting that, you 
know, we are trying to reorganize how we do things. If we know 
from the very outset, then we can administer best practices 
going forward.
    Mr. Rosekind. Absolutely.
    Ms. Clarke. Very well. Mr. Chairman, I yield back.
    Mr. Burgess. Chair thanks the gentlelady, gentlelady yields 
back. The Chair now recognizes the gentleman from the high 
humidity city of Houston, Texas, 5 minutes for your questions, 
please.
    Mr. Olson. Thank you, Mr. Chairman, and welcome Dr. 
Rosekind. Before my questions, I want to put a human face--
victim of a defective Takata airbag. His name was Carlos Saliz. 
He was 35 years old, lived in Spring, Texas, went to Spring 
High School, loved working with his brothers at Progressive 
Pumps. He bought a used 2002 Honda Accord, was involved in a 
minor crash on January 18 of this year. His airbag deployed, 
supposed to save his life, and took his life. He left behind a 
wife, Nicole, and three kids, Devon, Alyssa, and Angelina.
    His vehicle had a recall notice put out in 2011. He bought 
the car in 2014. He had no clue that the vehicle may be 
defective. He fell through the cracks. My question is, how can 
NHTSA make sure Carlos never happens again? How can we track 
the ownership of the vehicle with recall notices?
    Mr. Rosekind. First, thank you for recounting that. 
Everyone at NHTSA can give you a number. In 2013 there were 
32,719 lives lost on our roadways. We know the exact number. 
Thank you, because you gave--to the six people that have lost 
their lives worldwide, you gave a name and a face to one of 
those victims. And I think the concern which has been raised 
here earlier is that was a person that had a used car that had 
a recall notice out. And so people are buying used cars, or 
renting cars that have recalls and defects, acknowledged 
defects, that are not being fixed beforehand. So we are looking 
for, through Grow America, the Improvement Act that has been 
introduced, ways of trying to fix that gap.
    Mr. Olson. Well--as Mr. Case--Kennedy said, make sure that 
the ownership of the car follows recall notices, because Carlos 
had no clue that his car was defective. He was driving what he 
thought a great vehicle, had been out there since 2002, and 
gets in a minor accident and dies because his airbag killed 
him.
    I want to talk about--Deputy Administrator Friedman came 
here in December, and he stated that NHTSA would look into the 
safety of replacement airbags, the ones replacing. And he said 
that NHTSA was examining the airbag manufacturers that use the 
same propellant. My question is, what is the status of those 
investigations, the new devices and the propellant?
    Mr. Rosekind. Thank you, because this allows me to 
highlight the Consent Order that has been signed will allow us 
to direct testing. Previously that was almost exclusively on 
root cause. Now we will have an ability to make sure the 
testing goes to the adequacy of the remedy, right to your 
question, which is there are a variety of possible solutions, 
and we need to make sure that testing goes on to examine those, 
and make sure that the replacements will be effective long 
term.
    Mr. Olson. Are there other inflators that need to be 
examined from different models of vehicles?
    Mr. Rosekind. And thank you. I think, you know, one of the 
concerns is we do not know the root cause at this point. On the 
other hand, we do know that there are plenty of inflators that 
are functioning successfully. In 2013, 611,000 crashes where 
airbags deployed, so we know they can function, and we know 
that there are even different versions of Takata airbags that 
are not rupturing. So that is the good news, is we have other 
models or examples that can be pursued to understand what to 
change now.
    Mr. Olson. Final question about fatigue of recalls. I mean, 
last year the American people have been--with GM ignition 
switch recalls, massive recalls, Takata airbags out there, all 
the recalls--with them. I mean, heck, this past year I got a 
new pickup truck, got a notification from GM that there would 
be some sort of defect in some sort of sensor, so I had that 
taken out at the dealership. My question is, do you think there 
is recall fatigue, and how can we fight the fact that recall, 
after recall, after recall are hitting the American public, and 
finally they just say, I am tired of this, I am driving my car, 
it is fine. So how can we fight recall fatigue? Any ideas?
    Mr. Rosekind. First of all, I think it absolutely exists, 
and we held an event in April called retooling recalls, one to 
readjust. 75 percent may be good, but we have readjusted the 
target to be 100 completion. And then it was actually fantastic 
to see the number of manufacturers that are coming up with 
creative ways. Some manufacturers are actually taking their 
creative team to help them sell vehicles, and now applying them 
to the recall.
    So they are having special hours, they are having weekends 
with, you know, things for the kids. Private investigators are 
going to home to locate these people. A whole list of new 
ideas, and we are going to try and find a way to make sure 
everybody in the industry has excess to those--access to those 
ideas, and actually are following up to take action.
    Mr. Olson. Thank you. About out of time. On behalf of 
Carlos Saliz, thank you. Yield back.
    Mr. Burgess. Chair thanks the gentleman, gentleman yields 
back. Chair recognizes the gentleman from North Carolina, 5 
minutes for questions, please.
    Mr. Butterfield. Thank you very much, Mr. Chairman. First 
let me thank you, Chairman Burgess, for holding today's 
hearing. I think this is a very important hearing, and 
hopefully we can get some good information into the record that 
can have a bearing directly on the issue that we are talking 
about.
    This is an important issue. I am somewhat surprised, Mr. 
Chairman, to learn that the Takata airbag malfunctions have 
been linked to areas of high humidity. I am not sure that I 
really knew that. If I knew it, I didn't fully appreciate it 
until recently. I represent a very humid district down in North 
Carolina. Maybe not as humid as the districts are down in 
Texas, Mr. Chairman, but we are indeed a region that is very 
humid from time to time.
    Though North Carolina is outside the designated high 
absolute humidity area, one of these airbag malfunctions 
occurred in my State, causing me a great a deal of worry about 
the safety and efficacy of airbags manufactured by Takata, and 
the potential for my constituents to be seriously harmed, or 
even worse. I also have concerns about what practical impact 
this recall, and any recall, will have on the rental car 
market, so I will be concentrating on this aspect during my 
question time today.
    The U.S. rental market is huge, we all acknowledge that. In 
fact, one study estimates that there were nearly 2.1 million 
rental cars in service last year. However, despite the scale of 
the market, Federal law does not require rental car companies 
to remedy defects in rental cars before renting them to 
consumers. So a company could rent a car subject to this recall 
without an airbag that has yet to be replaced.
    So, Dr. Rosekind, again, thank you for your testimony. Do 
you believe that rental car companies should be prohibited from 
renting a car unless all known recalls and effects--defects 
have been repaired?
    Mr. Rosekind. If a defect has been identified, used cars 
and recalls should be fixed before they are allowed to put keys 
in consumers' hands.
    Mr. Butterfield. That is just clear as it can be. Do you 
think that most consumers would assume that a rental car, which 
may be newer than their own vehicle, is a safe vehicle?
    Mr. Rosekind. And that is the problem. While we can have 
this hearing, and talk about getting people for Takata to go to 
safergov dot--safercar.gov, almost nobody who rents a car or 
buys a used one will probably ever do that. And that is a gap 
we have to fill.
    Mr. Butterfield. Yes. Well, I drive a 1995 Toyota and a 
2000 Ford Explorer, and all of the rental cars that I rent are 
much better than my personal vehicles.
    Dr. Rosekind, do you think consumers have a right to free 
loaner cars while their cars are getting repaired? Regardless 
if consumers are given loaner cars, should there be a 
requirement that those loaners themselves, before being loaned, 
have no outstanding recalls?
    Mr. Rosekind. So thank you for raising that question. It 
comes up often what people should do, and we are telling 
people, if there is concern about their Takata inflator, they 
should talk to their dealer or manufacturer about a loaner or 
rental car.
    Mr. Butterfield. Recently Congresswoman Capps and myself 
introduced a bill that would prohibit a rental car that 
receives a notification about any defect or non-compliance with 
Federal motor vehicle safety standards to rent or sell the 
vehicle unless the defect is remedied. Dr. Rosekind, NHTSA has, 
in the past, supported similar legislation that prohibits 
rental car companies from renting vehicles subject to a recall, 
unless the defect is remedied. As the new NHTSA administrator, 
do you continue to support this type of legislation?
    Mr. Rosekind. And the Administration, and Secretary Fox, 
have done that as well through Grow America, which specifically 
has both used car and rental car defect issues covered just 
that way.
    Mr. Butterfield. All right. You are very clear in your 
responses, and I thank you for the manner in which you 
responded. Thank you very much, Mr. Chairman. I yield back.
    Mr. Burgess. Chair thanks the gentleman, gentleman yields 
back. Chair recognizes the gentleman from Florida, Mr. 
Bilirakis, 5 minutes for questions.
    Mr. Bilirakis. Thank you, Mr. Chairman, I appreciate. And 
thank you, Dr. Rosekind, for testifying today. It is my opinion 
that the Takata SPI inflator rupture may have been--it is my 
understanding, anyway, that the--it may have been caused by 
high humidity. What is the minimum exposure period before an 
inflator is considered by Takata to be at risk in a high 
humidity area? And if you have an opinion as to whether it was 
caused by high humidity, I would like to hear it as well.
    Mr. Rosekind. I am going to put my NTSB hat on and just say 
I would be very cautious about saying probable cause at this 
point, because there is no root cause. But to your question, 
there is no--there is absolutely data that shows humidity, 
because of the moisture, can have an effect on the inflator. 
And we could get into the chemistry, but your main question is 
what we have seen in the data. Somewhere between 7 \1/2\ to 
about 12.3 years is where we are seeing that inflator can 
rupture.
    Mr. Bilirakis. Thank you. All right. Next question is, I 
understand that NHTSA is helping prioritize the most urgently 
needed replacements to various parts of the country that need 
it most. In theory, this approach would help manage a finite 
supply, and ensure that the consumers who are most in danger 
are protected more quickly. But this phased approach does not 
appear to match with NHTSA's rollout in May 19, which grabbed 
headlines by covering 34 million vehicles.
    My constituents are in a high humidity area, I represent 
Florida, but it is unclear whether they can now obtain 
replacement parts, and if not, at which point can they obtain 
replacement parts in the future? I would like for you to answer 
that question. Are replacement parts available now in Florida, 
but maybe not available in New Jersey, and other parts of the 
country? And, again, are there enough replacement parts 
available, period?
    Mr. Rosekind. So first I would say safercar.gov is going to 
let them know, if they are checking that. They say recall for 
their vehicle, they need to call their dealer, because they 
will tell them if the part is available. For the second part, 
there is no question that one of the issues that we have with 
our coordinated remedy program is to make sure that sufficient 
supply of inflators are available across the country.
    Mr. Bilirakis. Thank you very much, and Representative 
Clarke covered the additional questions. So I appreciate it 
very much, and I yield back.
    Mr. Burgess. Chair thanks the gentleman, gentleman yields 
back. Chair recognizes the gentlelady from Indiana, Ms. Brooks, 
5 minutes for your questions, please.
    Mrs. Brooks. Thank you, Mr. Chairman. I have to say, when 
you have testified, Dr. Rosekind, that NHTSA was working hard, 
or you have testified that--working hard to stamp up some 
testing facilities of your own so you can verity the work that 
Takata is doing, it was in your written testimony, can you give 
us a status update on those validation activities? And is there 
a new NHTSA testing facility for these airbag inflators? Can 
you just share with us what is happening with that progress?
    Mr. Rosekind. And thank you for asking about that, because 
previously what NHTSA did was arrange to have data available to 
us, but his now provides us another resource to actually verify 
the testing, and any testing. So whether it is Takata's, or the 
independent coalition, we will be able to look at all that.
    So we have a facility in Ohio that allows us to do some 
testing, but because of the inflator rupture, we are talking 
about ballistic testing. You have got to blow them up and have 
them rupture. So Batel is helping us do that, and we basically 
have a plan already outlined. So, as of May 19, that plan is 
underway. How many have actually been tested by this point, I 
can't say, but we have our own independent testing being done 
by an outside laboratory to help us do that.
    Mrs. Brooks. So you are now using--because it required a 
different kind of testing than you had capabilities for, you 
are now using an outside tester?
    Mr. Rosekind. Correct.
    Mrs. Brooks. And do you have any idea how long the testing 
has been going on, and how is it going?
    Mr. Rosekind. I will get you specifics. I know the contract 
with Batel was signed a while ago, and the most important thing 
was to get a plan, which, as I have tried to emphasize, is not 
just, you know, we have tried to not just look at the root 
cause, which is what everyone else--we are now also trying to 
focus on the remedy. So I can get you information about when 
that contract was signed, what the plan is, and basically that 
should tell you what the calendar expectations are as well.
    Mrs. Brooks. Thank you. And--so you have mentioned several 
times in your testimony today that we may never know the root 
cause, and the root cause is a problem. And so problems 
associated with the beta inflators have persisted for years, 
and it feels as if we are not making any progress in 
determining the root cause. So, given that, how will we know--
how will--be satisfied that you have enough data to determine 
the adequacy of the proposed remedy if we don't know the 
original root cause?
    Mr. Rosekind. So I have often--around NHTSA, even though 
they wonder why I keep bringing this up, but while I was at the 
NTSB is when we investigated the 787 Dreamliner Boeing lithium 
ion battery fire. That was a year investigation, and some 
people would question whether the root cause was ever 
discovered. The entire fleet was grounded. And so that required 
Boeing coming up with a solution without fully knowing the root 
cause, which was identifying all the potential failure points, 
engineering a solution to that, testing it, and now they are 
flying again very quickly.
    So we have that possibility, including the fact there are 
all kinds of airbags, including Takata inflators, that are out 
there that are not rupturing. So, between those two things, 
there is an opportunity, without root cause, to still get a 
solution.
    Mrs. Brooks. So essentially taking your experience form 
NTSB, and how that would be the proposal that you will use 
going forward with Takata?
    Mr. Rosekind. Yes, and let me just add, because I haven't 
had chance to say this, but you have just raised one of the 
core questions we have been asking, at least since I have been 
there in January, is how long do you wait?
    Mrs. Brooks. Um-hum.
    Mr. Rosekind. So I had been at the NTSB--we couldn't wait a 
year to come up with an answer or not come up with an answer. 
So that is part of why we have pushed to basically take the 
driver's seat to get a focus on the remedy, and the supply, and 
all the other factors that will make a difference to get that 
safe airbag in everybody's vehicle.
    Mrs. Brooks. Thank you, and thank you for your work on 
this. You are right, we can't wait, and so--encourage your 
persistence in fighting for this. Thank you.
    Mr. Burgess. Chair thanks the gentlelady, gentlelady yields 
back. Chair recognizes the gentleman from Illinois, Mr. 
Kinzinger, 5 minutes for your questions, please.
    Mr. Kinzinger. Thank you, Mr. Chairman, and, sir, thank you 
for being here and answering our questions. Most of them have 
been asked. I just have a couple of ones, so I probably won't 
take all of my 5 minutes.
    But you talk about the coordinated remedy program, what is 
going to be involved, and when will you have a plan for acting 
as the central coordinator for the coordinated remedy program?
    Mr. Rosekind. So--thanks, because that gives me a chance to 
really focus on the endgame here. I keep talking about NHTSA 
sitting in the driver's seat, because, up until this point, it 
was really unclear how this was all going to happen. And so now 
we have a plan to be meeting with the manufacturers. We have 
already made contact with them. We will be meeting with 
suppliers. We will have joint meetings. And our intent, once 
that plan is together, is to have a public meeting, so there is 
transparency to the entire plan and schedule. We are hoping for 
that hearing to occur in the early fall.
    Mr. Kinzinger. OK. All right. And who within NHTSA with 
recall logistics expertise will be leading this coordination, 
or is this something that you are doing to need to probably 
contract out?
    Mr. Rosekind. Actually, right now there is an internal team 
at NHTSA that is overseeing this, so I have people from the 
defect/engineering group, a group that is dealing with the 
legal enforcement issues, and communications. So those three 
groups have come together to basically provide oversight for 
the process.
    Mr. Kinzinger. And do you believe that they have enough 
expertise to carry out this process, enough recall logistics 
expertise?
    Mr. Rosekind. At this point yes, and I think during our 
development of a future plan, if we find other resources are 
needed, I will be the first one to let everybody know to make 
sure----
    Mr. Kinzinger. OK.
    Mr. Rosekind [continuing]. That we get this done right.
    Mr. Kinzinger. So if you don't have it, you would be 
willing to look at, you know, outside, or whatever you need to 
get this done right?
    Mr. Rosekind. Yes.
    Mr. Kinzinger. OK. Well, you have answered pretty much all 
the questions I have, so, with that, I will yield back the 3 
minutes remaining.
    Mr. Burgess. Chair thanks the gentleman. Will you yield 
your remaining time to me?
    Mr. Kinzinger. Yes, I will yield it to you.
    Mr. Burgess. I thank the gentleman for that. Mr. Rosekind, 
as you are probably aware, last night in the Rules Committee we 
did the rule for the Transportation Appropriations bill that 
will be on the floor either this week or next week. So, 
recognizing we were having this hearing today, I asked the 
Transportation Subcommittee in Appropriations if they would 
share with me the spending plan submitted to their subcommittee 
by NHTSA. Every agency and department is required to submit a 
spending plan to the Appropriations Committee, or appropriate 
Appropriations Subcommittee, as they do their work, and build 
the appropriations bills that we will then vote on.
    So, I have got to say, what I was given is pretty sparse, 
so I am going to give you the benefit of the doubt, and if you 
would like to provide me with the spending plan that you 
provided to the Appropriations Subcommittee, I would be happy 
to review it, and review it with you, if you would like. 
Chairman Upton said--he made reference to the fact that we need 
to make sure the appropriations are in line. Ms. Schakowsky has 
talked about that. So, again, I will make this available to 
you, if it is as written, and that is fine. If you think there 
is a different spending plan that I should be looking at, I 
will be happy to do that. And, again, I will be happy to follow 
up with you. And I do want to stress, you have always been very 
good about keeping me, as the chairman of the subcommittee, 
informed about what you are doing, and for that I am very 
grateful.
    I am filibustering just a little bit because Mr. Engel is 
allegedly on his way here. So let me just ask----
    Mr. Rosekind. And can I----
    Mr. Burgess. Yes, please.
    Mr. Rosekind. I want to thank you for that opportunity, 
because when we--the President's budget has much detail about 
new----
    Mr. Burgess. Mr. Rosekind, I have got to interrupt you 
there.
    Mr. Rosekind. OK.
    Mr. Burgess. The President's budget never gets a single 
vote. Republican Senate----
    Mr. Rosekind. Yes, sir.
    Mr. Burgess [continuing]. Or House, Senate, Republican or 
Democrat, no one would even offer the President's budget up for 
a vote this year. So that is, you know, I mean, the President--
and this is not unique to the Obama administration. President 
Bush's budgets, when I was here in the majority earlier, 
frequently those would not pass on the floor of the House and 
the Senate.
    So, sure, the President sends up a wish list that balances 
never, and, yes, it has got everything funded to a level that 
would be great, if we lived in a world of unlimited resources, 
but you are the Administrator. And I have run a business. You 
understand that, as the Administrator, sometimes you have to 
prioritize spending, and that is what we really are looking for 
you to do. That is what we want you to do, just as the same as 
the director of NIH, just the same as Dr. Frieden at the CDC. 
We want you to prioritize and spend appropriately. But, again, 
I will give you the benefit of the doubt. This looks pretty 
thin to me. I just welcome the chance to go through the 
spending plan with you.
    And then, finally, last year, on a bipartisan basis, this 
committee requested that the Government Accountability Office 
review NHTSA's internal structure and procedures to assess the 
agency's ability to keep pace with advancements in vehicle 
technology. At the committee's hearing in December, Deputy 
Administrator Friedman committed to cooperating with the 
Government Accountability Office's review. Will you reaffirm 
this commitment to cooperate with GAO in this review?
    Mr. Rosekind. Absolutely, and we already are.
    Mr. Burgess. I appreciate that very much. Do you have any--
OK. At this point we are going to have to forego questions by 
Mr. Engel, and I apologize. We will get his questions to you in 
writing, and any member of the committee may have further 
questions. But, seeing there are no further members wishing to 
ask questions for this panel, I do want to thank Administrator 
Rosekind for being here today.
    This will conclude our first panel. We will take a brief 
recess to set up the second panel. Thank you, sir.
    [Recess.]
    Mr. Burgess. I will call the subcommittee back to order. 
Thanks to everyone for their patience, and for taking time to 
be here today. We will move into the second panel for today's 
hearing. We are going to follow the same format as the first 
panel. Each witness will be given 5 minutes to summarize their 
opening statement, followed by questions from the members.
    For our second panel, we want to welcome the following 
witnesses: Mr. Kevin Kennedy, the Executive Vice President of 
North America Takata; Mr. David Kelly, Project Director, 
Independent Testing Coalition; Mr. Mitch Bainwol, President and 
CEO of the Alliance of Automobile Manufacturers; and Mr. John 
Bozzella, the Chief Executive Officer of Global Automakers.
    We will begin our second panel with Mr. Kennedy. Sir, you 
are recognized for 5 minutes for your opening statement, 
please.

STATEMENTS OF KEVIN M. KENNEDY, EXECUTIVE VICE PRESIDENT, NORTH 
  AMERICA, TAKATA; DAVID KELLY, PROJECT DIRECTOR, INDEPENDENT 
TESTING COALITION; MITCH BAINWOL, PRESIDENT AND CHIEF EXECUTIVE 
    OFFICER, ALLIANCE OF AUTOMOBILE MANUFACTURERS; AND JOHN 
BOZZELLA, PRESIDENT AND CHIEF EXECUTIVE OFFICER, ASSOCIATION OF 
                       GLOBAL AUTOMAKERS

                 STATEMENT OF KEVIN M. KENNEDY

    Mr. Kennedy. Chairman Burgess, Ranking Member Schakowsky, 
and distinguished members of the subcommittee, I am honored to 
be here on behalf of Takata, and our employees throughout the 
United States. For Takata, safety is the core of who we are and 
what we do. We are proud that Takata airbags have saved 
thousands of lives, and prevented serious injuries in hundreds 
of thousands of accidents. It is unacceptable to us for even 
one of our products to fail to perform as intended. We deeply 
regret each instance in which someone has been injured or 
killed.
    We are committed to doing everything in our power to 
address the safety concerns raised by airbag ruptures. Our 
chairman has made that commitment personally to Administrator 
Rosekind, so let me tell you what we are doing. After months of 
testing, and extensive analysis, we have agreed with NHTSA to 
take broad actions, in conjunction with automakers, to respond 
to your concerns, and those of the public. We have recommended 
dramatically expanded recalls, including national recalls, that 
go well beyond what is suggested by the science and testing.
    Most of the ruptures on the road, and all of the fatalities 
in the U.S., have involved older Takata driver airbag inflators 
with batwing shaped propellants--propellant wafers, pardon me, 
that were originally subjected to previous recalls, and most of 
those have occurred in the regions of the country with high 
heat and absolute humidity. Nevertheless, we are proposing 
expanded national recalls to replace all of these batwing 
driver inflators, from the start of production through the end 
of production, in any vehicle registered anywhere in the United 
States. The recommended recalls will proceed in stages. The 
final stage will include the replacement of all batwing driver 
inflators previously installed as remedy parts. Takata will 
cease producing the batwing driver inflators altogether.
    There have been far fewer field ruptures involving 
passenger airbags. Nevertheless, our agreement with NHTSA also 
contemplates significantly expanded recalls for passenger 
airbag inflators, including a nationwide recall for one type of 
inflator. The recalls for the other passenger inflators will 
cover specific vehicle models ever registered in the high 
absolute humidity States, but with the potential, excuse me, 
for the recalls to expand to other States, if ordered by NHTSA. 
We will continue to test inflators beyond the scope of the 
recalls to determine whether further action is appropriate.
    For both driver and passenger airbags, all analysis to date 
indicates that the potentials for rupturing is limited to an 
extremely small fraction of older inflators. That is not meant 
to minimize the issue. One rupture is too many. It does 
explain, however, why Takata's filings state that a safety-
related defect may arise in some of the inflators. Not all of 
the inflators covered by the proposed recalls are defective.
    Based on 50,000 tests to date, and research involving 
leading experts from around the world, our best current 
judgment is that the potential for rupture is related to long 
term exposure over many years to persistent conditions of high 
heat and high absolute humidity, as well as other potential 
factors, including possible manufacturing and vehicle specific 
issues. Nonetheless, we have proposed a broader remedy program. 
NHTSA will play a central role in overseeing this remedy 
program. Takata will prepare a plan for NHTSA, outlining steps 
to help determine the safety and expected service life of the 
remedy parts. We will also work with NHTSA and our customers to 
get the word out to consumers to help maximize recall 
completion rates.
    In addition to increasing our own testing, we are actively 
supporting the testing work of the automakers and NHTSA. We 
also continue to support the work of the Independent Quality 
Assurance Panel, led by former Secretary of Transportation Sam 
Skinner, and we are continually ramping up our production of 
replacement kits. In December we were producing approximately 
350,000 kits per month. We are now producing more than 700,000, 
and by September we expect our monthly production to reach one 
million units.
    Half of the replacement kits we shipped last month 
contained inflators made by other suppliers, and by the end of 
the year we expect that to reach 70 percent. We have confidence 
in the inflators we are making today, the integrity of our 
engineering and manufacturing, and we believe that, properly 
made and installed, these inflators will work as designed to 
save lives. We will continue to do everything we can to ensure 
uncompromised safety, and the success of the recall efforts, 
and we will keep Congress, NHTSA, and the public updated on our 
progress. Thank you, Mr. Chairman.
    [The prepared statement of Mr. Kennedy follows:]
    
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    Mr. Burgess. Chair thanks the gentleman. Mr. Kelly, 
recognized for 5 minutes for your opening statement, please.

                    STATEMENT OF DAVID KELLY

    Mr. Kelly. Chairman Burgess, Ranking Member Schakowsky, 
members of the subcommittee, thank you for the invitation to 
appear before you to discuss the activities of the Independent 
Testing Coalition. The ITC is comprised of 10 automakers that 
have Takata airbags in their passenger vehicles, and is 
committed to an independent and comprehensive investigation of 
the technical issues associated with Takata airbag inflators, 
and look forward to the results of this process as we focus on 
the safety, security, and peace of mind of all motorists. Our 
primary goal is to find the root cause of this problem.
    As we have started to look at this issue of energetic 
disassembling, it is apparent that there is no silver bullet or 
easy solution to be found. The public needs to understand that 
experts have been studying this problem for years. If this was 
anything but the complex project that it is, a root cause would 
have been identified by now. Unfortunately, that is not the 
case, and a final determination is not imminent.
    We have devised a detailed testing plan that, when 
completed, will examine every identified aspect of this 
problem. We will conduct more--we will conduct tens of 
thousands of chemical tests alone. This will be supplemented by 
a similar number of non-destructive tests, and many thousands 
of advanced computer simulation runs. In addition, there will 
be a significant amount of data generated from our tests that 
then must be analyzed. This issue is too important for any 
stone to be left unturned.
    I do want to stress that we intend to conduct our 
investigation in an independent manner. We will work with 
Takata, we will work with NHTSA, we will work with all the 
affected parties, but we will conduct this investigation in an 
independent manner. We very much appreciate any input and 
suggestion from all the parties, but we will do our own 
analysis of others' data and testing procedures. When we finish 
our investigation, we do intend to make our findings public. 
Thank you.
    [The prepared statement of Mr. Kelly follows:]
    
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    Mr. Burgess. Chair thanks the gentleman. Chair recognize 
Mr. Bainwol, 5 minutes for your testimony, please.

                   STATEMENT OF MITCH BAINWOL

    Mr. Bainwol. Chairman Burgess, Ranking Member Schakowsky, 
members of the subcommittee, thanks for this opportunity. On 
behalf of the 12 leading global--on behalf of 12 leading global 
OEMs, including the U.S. companies, and nine European and 
Japanese-based companies, I appreciate this opportunity to 
testify. I would like to make four summary points. First, your 
hearing today is timely and welcomed, and we are fully 
committed to doing our part to successfully complete this 
recall, while continuing to build on the very significant 
safety advances of recent years. The magnitude of the Takata 
airbag recall is unprecedented and global. There are no easy 
answers, or quick fixes. That is why we support Administrator 
Rosekind's decision to use NHTSA authority to organize and 
prioritize affected manufacturers remedy programs. We all want 
a clear, unified approach. We share this committee's 
frustration. It is very difficult for us to be able to tell our 
customers, your constituents, how long this will take to be 
fully resolved.
    Second, though the logistics in a global economy with about 
80 million units sold each year around the world are highly 
complex, and there are legal impediments to the industry-led 
coordination, the key challenge of most recalls is more basic, 
and that is getting consumers to take advantage of the free 
fix, especially in order vehicles. The average consumer 
participation rate for light vehicle recalls after about a year 
and a half is 83 percent for newer vehicles, but falls to 44 
percent for vehicles 5 to 10 years old, and falls further to 15 
percent for vehicles older than 10 years.
    Because of these concerns, our members have tasked the 
alliance to conduct the most intensive public opinion research 
ever on recalls to learn what motivates some consumers to 
respond, and why others don't, what motivates consumers to go 
into the dealership and get it done, what messages work, and 
what messengers are most effective. Work is underway now, and 
we will share the results with NHTSA and you to help forge a 
multi-pronged effort to strengthen consumer participation.
    Third--context. Recall policy is vitally important, and we 
are committed to strengthening the process for resolving 
defects. That said, it is just one piece of the safety 
equation, and, as a share of fatalities on the road, a 
relatively fractional one. Most fatalities, certainly 90 
percent plus, result from human error, principally impaired 
driving, and failure to sue seat belts. While we are seeing 
profound gains in safety over the last 50 years, and especially 
over the last decade, technology does offer the promise of even 
greater advances as we build on crashworthiness, and introduce 
the idea of crash avoidance functionality. All the new jargon 
we hear, driver assist, V to V, V to X, and ultimately self-
driving vehicles, are part of a continuum that thankfully will 
save thousands of lives by helping to compensate for driver 
error. This isn't speculation. This is our emerging reality.
    Fourth, and finally, let me state the obvious. OEMs are 
passionately committed to improving safety, and we are very 
proud of the results we have achieved, both because it is the 
right thing to do, and because it is good business. Safety 
innovation is critical to the competitive landscape. Auto 
companies are investing about 100 billion, billion with a B, 
every year in research and development to comply and to 
compete, to comply with a various--with various public policy 
requirements in the U.S. and elsewhere, and to compete in the 
globally dynamic marketplace. That investment is paying off, 
and our polling shows that your consumers, that your customers, 
your constituents, do see the progress. Relative to 10 years 
ago, your constituents say cars are safer by 86 to 5 percent, 
they get better fuel economy by 89 to 3 percent, and they are 
of higher quality by 79 to 12 percent, so the progress is being 
recognized, and that is terrific.
    Thanks for the opportunity to share our thinking. We stand 
ready to work with you, and your staffs, to make our roads as 
safe as possible.
    [The prepared statement of Mr. Bainwol follows:]
    
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    Mr. Burgess. Chair thanks the gentleman. Chair recognize 
Mr. Bozzella, 5 minutes for your statement, please.

                   STATEMENT OF JOHN BOZZELLA

    Mr. Bozzella. Chairman Burgess, Ranking Member Schakowsky, 
members of the committee, I really appreciate the opportunity 
to appear before you today. Global Automakers represents 
international automotive manufacturers that design, build, and 
sell cars and light trucks in the United States. Our members 
sold 43 percent of new vehicles purchased in the U.S. last 
year, and produced 40 percent of all vehicles built here. 
Individually and jointly, our member companies are committed to 
working toward a future in which there are zero highway 
fatalities. The safety of Americans traveling on our roadways 
remains a priority.
    Mr. Chairman, this hearing presents an opportunity to 
further this important discussion on improving auto safety. The 
Takata recall is an unprecedented situation. The number of 
manufacturers, and the number and age of affected vehicles 
involved, along with the sophistication and complexity of the 
technology, makes this unique. As such, affected automakers are 
taking extraordinary measures to locate and communicate recall 
information to vehicle owners so that they know to take their 
vehicles in for repair.
    Our members have gone far beyond what the law requires. 
They are--multiple rounds of recall notices. They are sending 
Express Mail to ensure that the notifications are not 
discarded. They are using multiple platforms, such as 
advertising, social media, and electronic communications. They 
are working closely with their dealer networks to ensure that 
dealers have the capacity to service vehicles with open 
recalls. Additionally, they created the ITC to conduct 
independent testing of recalled parts, as led by David Kelly.
    Of course, recall campaigns are only one component of 
creating a safer driving environment. The Takata recall 
highlights the complex nature of the industry and the 
challenges we face today. All stakeholders must work together 
in the effort to improve vehicle and highway safety. Critical 
areas of focus include proper oversight of existing safety 
systems, the development and introduction of new technologies, 
and driver and passenger behavior. This committee, through its 
authorship of the TREAD Act, has given NHTSA the ability to 
require reporting and tracking of safety-related data that 
better allows us to identify problems in the existing fleet of 
vehicles, and to address and solve them.
    In part, the number of recalls that have occurred in recent 
years is evidence that the requirements of the TREAD Act, 
NHTSA's ongoing vigilance, and the commitment of the 
manufacturers, are advancing the goal of improved vehicle 
safety. Automakers are now deploying advanced technologies 
which will accelerate the move from crash survival to crash 
avoidance, including forward collision warning and braking, and 
soon vehicle to vehicle and vehicle to infrastructure 
communications. According to the DOT, vehicle to vehicle 
communications, when fully deployed, could address 80 percent 
of crashes involving unimpaired drivers.
    A holistic approach to vehicle and highway safety must 
include human behavior, which plays a role in a voluntary 
recall system. For newer vehicles, the recall completion rate 
is upwards of 80 percent. The completion rate falls 
dramatically as vehicles age. This is a key challenge in 
resolving the Takata recall, and raises an important question, 
are there limits to the success of a voluntary system? Global 
automakers and our members are exploring ways the industry can 
achieve better outcomes. We are working with NHTSA officials, 
and are happy to talk with you about new methods for getting 
useful, effective, and actionable recall information to our 
customers, such as including recall notifications and annual 
vehicle registration processes.
    Mr. Chairman, it is important to keep in mind that highway 
safety is improving. This past December, NHTSA announced that 
traffic fatalities decreased by 3.1 percent over the previous 
year, and by nearly 25 percent since 2004. However, there is 
clearly more work to be done. Regarding the Takata recall, the 
most important thing we can do right now is to make sure people 
are aware of the status of their vehicle. Every vehicle owner 
should go to safercar.gov and enter their VIN, the Vehicle 
Identification Number, to determine whether additional action 
is needed. This needs to be done now, and it needs to be done 
several weeks from now, when manufacturers will have posted the 
specific VINs of the vehicles that have just been added to the 
recall list. Personally, I did this myself for my vehicle and 
my children's vehicle, and it gave me the peace of mind to 
knowing where we are at.
    Global automakers and our members will continue to work 
toward our mutual goal of 100 percent recall completion, and 
zero traffic fatalities. Thank you for the opportunity to 
appear before you today.
    [The prepared statement of Mr. Bozzella follows:]
    
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    Mr. Burgess. Chair thanks the gentleman. Chair thanks the 
entire panel for their testimony today. We will move into the 
question portion of the hearing, and I will recognize myself 
for 5 minutes for questions.
    I have got a couple of questions that relate to the 
propellant in the inflator. And, Mr. Kennedy, I am primarily 
going to ask you, but, Mr. Kelly, if you have information, 
because of your independent testing role, please feel free to 
add. Is--Mr. Kennedy, is Takata the only airbag manufacturer 
that uses sodium nitrate in its airbags?
    Mr. Kennedy. It is ammonium nitrate, sir----
    Mr. Burgess. I am sorry, ammonium.
    Mr. Kennedy [continuing]. And I believe we are the only one 
that uses it as a main propellant. There are other 
manufacturers that use it as a supplemental propellant.
    Mr. Burgess. Is there any other airbag, other than those 
manufactured by Takata, that has been--experienced this 
energetic disruption, I think you called it, Mr. Kelly?
    Mr. Kelly. I can't really speak to all--recalls for the 
other suppliers, Chairman Burgess. I really don't know the 
answer to that.
    Mr. Burgess. Well, it is just that we have had, you know, 
this is the second hearing that I have been involved in of--on 
this issue, and ammonium nitrate just keeps coming up. I mean, 
it is a pretty powerful compound, and it just begs the 
question, is there a linear relationship between the ammonium 
nitrate used as an inflator and these accidents that are 
happening?
    Mr. Kennedy. Well, the studies that we have done, and the 
research that we have from some of the leading experts in the 
world, seem to indicate that ammonium nitrate is certainly a 
factor in the inflator ruptures. There are many, many other 
factors. I think you heard Dr. Rosekind talk about some of 
them. You have heard Mr. Kelly talk about some of them. The--
takes a long time. As Dr. Rosekind said, 7 to 12 years. It 
takes high absolute humidity, it takes high heat.
    But what is difficult about the situation is you can put 
two inflators in that situation, one of them is fine, and one 
of them is not. So that is really what the struggle has been 
with getting to the root cause. But ammonium nitrate appears to 
be one of the factors that contributes.
    Mr. Burgess. So it is--high humidity is an issue. My 
understanding is some of these are manufactured with a 
desiccant to absorb humidity----
    Mr. Kennedy. Yes.
    Mr. Burgess [continuing]. Which would then go along with a 
7-to-12-year timeframe of--presumably the desiccant is going to 
get completely used up over some period of time. Is that 
correct?
    Mr. Kennedy. I don't know that it would get complete used 
up, sir. It depends on the amount of moisture that is in a 
particular inflator, and the amount of desiccant. Many of our 
later generation inflators do contain desiccant, along with 
ammonium nitrate. We have not seen this issue with those 
inflators in the field, so we know that that is a factor that 
contributes to the life of the inflator.
    Mr. Burgess. Does Takata manufacture any airbag that is 
used in any make or model of vehicle that uses sodium--I mean, 
I am sorry, ammonium nitrate without a desiccant?
    Mr. Kennedy. Yes. Some of our--some--all of these inflators 
that are involved in these issues that we are talking about are 
all ammonium nitrate without desiccant.
    Mr. Burgess. And are you still manufacturing ammonium 
nitrate without a desiccant as the propellant?
    Mr. Kennedy. For a few platforms that we have not 
transitioned out of yet, but we are working to transition out 
of them as quickly as possible.
    Mr. Burgess. So, I am sorry, you go out and buy a brand new 
car off the showroom floor, and it could have one of these 
instruments in it?
    Mr. Kennedy. It could have an ammonium nitrate-based 
inflator that does not have desiccant, that is correct.
    Mr. Burgess. Is there any obligation to warn the consumer 
that they are buying something that may be problematic?
    Mr. Kennedy. Well, the recalls that are in process at this 
point are for certain timeframes, certain vehicles, certain 
technologies. Those would not be involved in a brand new 
vehicle at this point, but that is why we are continuing, as 
part of the Consent Order, to test outside of the boundaries of 
what is involved in the recall to really understand what this--
what the total scope is.
    Mr. Burgess. Well, I am sorry, you are not providing me 
much reassurance with that answer. Let me just ask you this. 
You said that by September you will be up to a million units a 
month----
    Mr. Kennedy. Yes, and then we will continue to go up after 
that as well.
    Mr. Burgess. But under--just simple math, it is--for 34 
million vehicles, I mean, it is almost 3 years as a timeframe.
    Mr. Kennedy. Well, it is about--I mean, roughly--the exact 
numbers are in the DIRs, but the additional due to these DIRs 
is about 16, 17. I don't mean to minimize it. It is obviously a 
huge number whichever way you look at it. But previously there 
had been about 18 million of that 34 that have already been 
under recall. We have supplied over four million kits already 
since January of last year, and now, as I said, we are up to 
750,000 a month, going to a million a month----
    Mr. Burgess. OK. Let me just----
    Mr. Kennedy [continuing]. Going beyond that.
    Mr. Burgess. Let me just ask you this. I don't mean to 
interrupt, but my time is up.
    Mr. Kennedy. That is OK.
    Mr. Burgess. Are any of the replacement modules that you 
are putting--reinstalling in vehicles that are brought in to 
have their airbag system changed out, are any of those ammonium 
nitrate propellants without desiccants?
    Mr. Kennedy. Some of them are. As I said, we have gotten 
about 50 percent with outside inflators that are nonammonium 
nitrate. On the driver's side, where we have had most of the 
issues, as I mentioned in my opening remarks, we are completely 
transitioning out of the batwings, and we will be using either 
a desiccated inflator without batwings, or we will be using a 
competitor's inflator.
    Mr. Burgess. All right, thank you. My time has expired. Ms. 
Schakowsky, 5 minutes for questions, please.
    Ms. Schakowsky. I want to follow up on the chairman's 
question. You have talked about what are the possible reasons, 
including ammonium nitrate perhaps being part of the cause, and 
you are saying, if I understand you correctly, that you are 
providing replacement bags that have--that are--have ammonium 
nitrate without a desiccant?
    Mr. Kennedy. Yes, ma'am, that is correct.
    Ms. Schakowsky. So--I don't understand that. What is under 
recall right now?
    Mr. Kennedy. Certain model years, certain designs, on 
certain vehicles.
    Ms. Schakowsky. But why, if ammonium nitrate may be a 
problem, would you, and why would I buy, a--put in--why would 
you put it in a car, why would I buy a car that has a 
potentially dangerous airbag? I am not understand.
    Mr. Kennedy. Well, we are working to move away from those 
as quickly as we can, but to--in a vehicle, it is not as easy 
as just changing the color of the car, or changing a bolt.
    Ms. Schakowsky. No, you are----
    Mr. Kennedy. It is very, very----
    Ms. Schakowsky. No, I am talking about replacements now, 
not even the----
    Mr. Kennedy. Yes.
    Ms. Schakowsky [continuing]. New cars.
    Mr. Kennedy. Yes.
    Ms. Schakowsky. So the replacement could be as dangerous as 
the current, why would you even replace it?
    Mr. Kennedy. Well, as I said, without really exactly 
understanding the root cause, and continuing to test outside of 
the bounds of what we have already recalled, we are trying to 
determine that. We are trying to understand exactly what are 
the factors that lead to this, and should we do something 
different than what we are doing right now?
    We know it does--as you heard Dr. Rosekind say, it takes 7 
\1/2\ to 12 years, so putting in a brand new part is a huge 
improvement in safety. And as we continue to test, if it shows 
that we need to take additional actions, we will take 
additional actions.
    Ms. Schakowsky. So does the recall affect cars that are 
over 10 years old?
    Mr. Kennedy. Yes, some of them--I think--well, the original 
recalls did. These new ones announced, I would have to look at 
the DIRs and see, because of that overlap that I talked about. 
But some of them go back to as early as I think 2000, 2001----
    Ms. Schakowsky. OK.
    Mr. Kennedy [continuing]. Were the first ones involved.
    Ms. Schakowsky. My understanding is that you are doing that 
of older cars, but you are not required to do so. So I wanted 
to ask you if Takada has taken a position on the Vehicle Safety 
Improvement Act, H.R. 1181?
    Mr. Kennedy. No, we have not publicly. I am aware of the 
bill. I am not aware of all the particulars in the bill. But we 
certainly support any effort that would help improve the return 
rate on recalls.
    Ms. Schakowsky. So let me give you some of the items in the 
bill, and see if you would support that. H.R. 1181 would 
increase the quantity and quality if information shared by auto 
manufacturers with NHTSA, the public, and Congress, 
specifically requires manufacturers to include in their 
quarterly submissions to NHTSA additional information on fatal 
incidents possibly caused by a defect, and assess why the 
incident may have occurred, and removes the limitation on the 
number of model years that should be reported. Is this 
something that sounds supportable to you?
    Mr. Kennedy. Well, it is a little disingenuous for me, 
because it is not a requirement for our company to comment on 
it. But it would seem like that would be a good idea in order 
to increase the visibility on some of these issues that have 
been going on in the field.
    Ms. Schakowsky. Do you think it would be a good idea to not 
limit to 10 years the number of mandatory--of recalls, asking 
that cars older than 10 years be part of the required recall?
    Mr. Kennedy. Quite frankly, I didn't know there was a limit 
of 10 years, because, as I said, some of these vehicles are 15 
years old.
    Ms. Schakowsky. Would you think that it is a good idea for 
NHTSA to have new imminent hazard authority to expedite recalls 
related to dangerous defects?
    Mr. Kennedy. That is, again, a difficult one for a 
supplier, I think, to answer. But I think anything that 
improves the safety on the road is certainly a step in the 
right direction.
    Ms. Schakowsky. Do you think there is any reason to support 
regional recalls, as opposed to national recalls?
    Mr. Kennedy. Well, you know, obviously ours started off as 
a regional recall. And the reason that it was doing--a couple 
of reasons it was doing that. Number one was because that is 
what the science and data showed where the issues were. And 
there are going to be some cases where, I think, that is 
probably correct. And it also helps----
    Ms. Schakowsky. But people do drive their cars to other 
places.
    Mr. Kennedy. Yes, that is true, but--the other thing I was 
going to say, it also helps with getting parts into the 
priority areas as quickly as possible, which is part of the 
four DIRs that we came to agreement with NHTSA on in the last 
couple of weeks.
    Ms. Schakowsky. Mr. Kennedy, can I work with you as well, 
obviously, primarily with the members, but talk to you about 
the legislation?
    Mr. Kennedy. Absolutely.
    Ms. Schakowsky. Thank you. I yield back.
    Mr. Kennedy. You are welcome.
    Mr. Burgess. The Chair thanks the gentlelady. Chair 
recognizes the gentlelady from Tennessee, 5 minutes for your 
questions, please.
    Mrs. Blackburn. Thank you, Mr. Chairman. Mr. Kennedy, I am 
going to stay right with you. Did you drive a car that has a 
Takata airbag?
    Mr. Kennedy. Yes, I do.
    Mrs. Blackburn. You do?
    Mr. Kennedy. Yes, I do.
    Mrs. Blackburn. What about your family?
    Mr. Kennedy. Yes, every one of them.
    Mrs. Blackburn. Are you concerned----
    Mr. Kennedy. No, I am not.
    Mrs. Blackburn [continuing]. The safety of those? OK. I was 
listening to your statement, and I think I must have missed 
something here, because you talked about manufacturing the--
stopping the manufacture of the batwing airbags, but you never 
mentioned the ammonium nitrate. You kind of left the 
propellant----
    Mr. Kennedy. Correct.
    Mrs. Blackburn [continuing]. Out of the mix, and then 
addressed it with Mr. Burgess a little bit. I want to ask if 
you agree with this statement. This is from an explosives 
expert at Missouri University of Science and Technology, and he 
said the following about ammonium nitrate, it shouldn't be used 
in airbags, but it is cheap, unbelievably cheap. Do you agree 
with that statement?
    Mr. Kennedy. That it is unbelievably cheap, or that it 
shouldn't be used? Are you----
    Mrs. Blackburn. Both.
    Mr. Kennedy. I wouldn't say that it is unbelievably cheap. 
I would say it is competitive with some of the other propellant 
formulations that are out there, like guanidine nitrate, which 
some of our competitors use, and which we use in some other 
inflators. I don't think--I mean, it is a blanket statement 
that says it should not be used. No, I don't agree with that, 
because obviously we use it. We have had some issues with some 
of our ammonium nitrate inflators, but many of them have 
performed very well.
    Mrs. Blackburn. Are you an explosives expert?
    Mr. Kennedy. No, ma'am, I am not.
    Mrs. Blackburn. You are not?
    Mr. Kennedy. I am an engineer, but I am not a----
    Mrs. Blackburn. OK.
    Mr. Kennedy [continuing]. I am not a chemist, I am not an 
explosives expert.
    Mrs. Blackburn. All right. Then let us go to what Ms. 
Schakowsky was saying. You are still using this, so isn't it 
true that ammonium nitrate is a dangerous substance to be used 
in airbag inflators?
    Mr. Kennedy. No, I don't believe it is a dangerous 
substance to be used in airbag inflators.
    Mrs. Blackburn. OK, you do not believe----
    Mr. Kennedy. We use phase stabilized ammonium nitrate. Most 
of the issues that you hear about ammonium nitrate are it 
losing its phase stabilization.
    Mrs. Blackburn. All right. Then isn't it true that ammonium 
nitrate is cheaper than other compounds, such as tetrazole?
    Mr. Kennedy. Probably--maybe tetrazole, but at the time 
when we started to use ammonium nitrate, there--the competing 
material out there was guanidine nitrate.
    Mrs. Blackburn. OK.
    Mr. Kennedy. And those two are very similar in cost. There 
is not a huge----
    Mrs. Blackburn. OK.
    Mr. Kennedy [continuing]. Difference between those.
    Mrs. Blackburn. You are an engineer, and isn't it true that 
your own engineers at Takata warned you about using ammonium 
nitrate?
    Mr. Kennedy. Well, from some of the newspaper articles I 
have read, I assume you are referring to Mr. Lillie's comments, 
is that correct?
    Mrs. Blackburn. Mr. Britton and Mr. Lillie.
    Mr. Kennedy. OK.
    Mrs. Blackburn. Yes.
    Mr. Kennedy. And what I can tell you is this. Every 
development program, every product that any supplier every 
makes, there is always a spirited debate about what are the 
right components, what is the right design, what--and there are 
tradeoffs on all of those things. The previous materials that 
we used for propellant was sodium azide. Sodium azide was 
extremely toxic. It also had the unwanted effect that, when it 
was deployed, it did not burn very cleanly, and there was a lot 
of effluent that were put into the vehicle, and a lot of people 
that had respiratory issues were bothered by those.
    So we, you know, every propellant, every design, there is 
always a spirited debate----
    Mrs. Blackburn. OK.
    Mr. Kennedy [continuing]. And you can probably find 
people----
    Mrs. Blackburn. All right.
    Mr. Kennedy [continuing]. Always on one side----
    Mrs. Blackburn. I get that. I want----
    Mr. Kennedy [continuing]. And not on----
    Mrs. Blackburn [continuing]. To move on----
    Mr. Kennedy [continuing]. The other.
    Mrs. Blackburn [continuing]. Because I am about to run----
    Mr. Kennedy. OK.
    Mrs. Blackburn [continuing]. Out of time here. OK. Given 
that you are recalling cars that may have already been 
repaired, have there been any field incidents reported in 
inflators that were installed as parts, any of the remedy 
situations? Have you had any occurrences with those?
    Mr. Kennedy. Not that I am aware of, ma'am.
    Mrs. Blackburn. So all of the replacement parts have 
performed 100 percent satisfactorily in the cars in which they 
have been installed?
    Mr. Kennedy. Well, what I said was I am not aware of any of 
the replacement parts----
    Mrs. Blackburn. Would you double check that and get back to 
us----
    Mr. Kennedy. Yes, ma'am, I will.
    Mrs. Blackburn [continuing]. And let us know? What does 
Takata believe we know from testing today that we didn't know a 
year ago?
    Mr. Kennedy. We know a lot, and not just from our testing. 
I know I heard some of the gentlemen refer to the Fraunhofer 
report which was released. We brought Dr. Noits from the 
Fraunhofer Institute into our facility in February. We brought 
a team from NHTSA in.
    Mrs. Blackburn. What kind of changes are you making with 
that information, then, if you are still using the propellant 
that is a problem?
    Mr. Kennedy. Well, as I said, we do have later designs to 
use desiccant. That is one of the things that has been proven 
to improve the situation. We also have alternate propellants 
now with guanidine nitrate that we have--we started production 
a year or 2 ago, and we are continuing to ramp those up. I 
think overall you will see our production of ammonium nitrate 
go down rapidly.
    Mrs. Blackburn. I yield back.
    Mr. Burgess. Gentlelady yields back. Chair thanks the 
gentlelady, and the Chair recognizes the gentleman from 
Massachusetts, 5 minutes for your questions, please.
    Mr. Kennedy of Massachusetts. Thank you, Chairman. Thank 
you to the witnesses for being here. I apologize, I had to step 
out, but glad to come back. Mr. Kennedy, you indicted that you 
expect that the use of ammonium nitrate would decrease. Why--in 
your--in the future. Why is that?
    Mr. Kennedy. Well, it is certainly got a bad reputation 
through all of this, and it--as I said, it is one of the 
contributing factors that everyone believes is involved in this 
issue.
    Mr. Kennedy of Massachusetts. Can you----
    Mr. Kennedy. Sorry.
    Mr. Kennedy of Massachusetts. Can you, sir, signify that--
or guarantee that as long as ammonium nitrate is used in those 
products, the products are safe?
    Mr. Kennedy. I am sorry?
    Mr. Kennedy of Massachusetts. Can you guarantee that as 
long as ammonium nitrate is used in those products, that the 
products are safe?
    Mr. Kennedy. Well, we believe properly manufactured and 
designed ammonium nitrate, phase stabilized ammonium nitrate, 
can be done properly.
    Mr. Kennedy of Massachusetts. So the--I guess--you 
indicated in your testimony--your written testimony a little 
while ago that, in certain circumstances, these conditions can 
result in an alternation in the propellant wafers in the 
inflators that could potentially lead to overaggressive 
combustion.
    Mr. Kennedy. Right.
    Mr. Kennedy of Massachusetts. And so it is--your statement, 
though, is that if it is properly manufactured, and then under 
the right circumstances, those conditions would not exist?
    Mr. Kennedy. Well, we have seen those in very rare cases, 
and that is--goes back to the root cause discussion we were 
having a little bit earlier. We do not have the definitive root 
cause. We know a lot, and we know a lot more than we did in 
December, based on all the testing that we have done, and all 
the testing that our outside experts have done.
    Mr. Kennedy of Massachusetts. So the testing that you have 
done has indicated that, if I understand you correctly, and 
please correct me if I don't, but--is the ammonium nitrate, or 
the substances used in the production of these wafers, and--
then, under certain conditions of humidity and heat over time 
could lead to a malfunction----
    Mr. Kennedy. Could lead to----
    Mr. Kennedy of Massachusetts [continuing]. In a crash?
    Mr. Kennedy [continuing]. Correct.
    Mr. Kennedy of Massachusetts. Could lead to? And that you 
are going to--your plans are to phase out the use of ammonium 
nitrate in your products?
    Mr. Kennedy. Well, we have been phasing that down, and 
phasing later propellants, but a lot of them, even some of the 
ammonium nitrate ones, were with desiccant. We had gone from 
non-desiccated ammonium nitrate to desiccated ammonium nitrate, 
and now we are moving to a--what is called a guanidine nitrate.
    Mr. Kennedy of Massachusetts. And the guanidine nitrate you 
said is a similar cost?
    Mr. Kennedy. A similar cost, yes.
    Mr. Kennedy of Massachusetts. So then why not adopt it 
earlier?
    Mr. Kennedy. You know, it was--we made investments in order 
to process ammonium nitrate. We were having good success with 
ammonium nitrate. It was competitive. As I said, it had a 
number of these other advantages to it that our customers 
enjoyed, so it was not something that, until some of these 
recent issues, really thought, and gave us a reason to re-think 
it.
    Mr. Kennedy of Massachusetts. Some fairly significant 
disadvantages of late, though, yes?
    Mr. Kennedy. I am sorry?
    Mr. Kennedy of Massachusetts. Some fairly significant 
disadvantages of late, though, I would----
    Mr. Kennedy. Yes, sir.
    Mr. Kennedy of Massachusetts. And then, sir, I think you 
tried to touch on this, but forgive me if I am still a little 
bit confused, I--in an article in the New York Times yesterday, 
indicated that--the headline, I believe, says, ``Takada says it 
will no longer make side-inflator linked to airbag defect.''
    Mr. Kennedy. I am sorry, what did that say?
    Mr. Kennedy of Massachusetts. ``Takata says it will no 
longer make side-inflator linked to airbag defect,'' and 
basically says that you----
    Mr. Kennedy. I----
    Mr. Kennedy of Massachusetts [continuing]. Will not be 
using ammonium nitrate. There was another piece in another 
newspaper I saw today saying that ammonium nitrate still would 
be manufactured. And a piece in Reuters that I think said that 
it wasn't going to be in, then the piece was withdrawn. So can 
you try to clarify for me, is ammonium----
    Mr. Kennedy. Yes.
    Mr. Kennedy of Massachusetts [continuing]. Nitrate still 
being used in the products, and should people--what should 
people do? Do they have--can they have confidence in the airbag 
product that is going into the cars----
    Mr. Kennedy. Yes. I am glad you asked that question. There 
was a lot of confusion yesterday once our written testimony was 
released.
    Mr. Kennedy of Massachusetts. Both cited your rest--written 
testimony. One said that you are, and one said you are not----
    Mr. Kennedy. Yes.
    Mr. Kennedy of Massachusetts [continuing]. So----
    Mr. Kennedy. Well, yes, it----
    Mr. Kennedy of Massachusetts. I appreciate the 
clarification.
    Mr. Kennedy. It is a long story. We have had people working 
on that since it came out. As I think I mentioned earlier, we 
are continuing to use ammonium nitrate in our propellants, 
phase stabilized ammonium nitrate, both with and without 
desiccant, but we--there are not many without desiccant that 
are still out there.
    Mr. Kennedy of Massachusetts. OK.
    Mr. Kennedy. What we did say we were going to quit making 
were these batwing shaped inflators, because that seemed to be, 
again, one of the issues that we have seen from all the testing 
that we have done. It is more prevalent in the batwing 
propellant wafers.
    Mr. Kennedy of Massachusetts. OK. Given that, I only have 
about 30 seconds left. I will stop going forward, and, Mr. 
Chairman, I will yield back. Thank you. Thank you to the 
witness.
    Mr. Kennedy. You are welcome.
    Mr. Burgess. The gentleman yields back. The Chair thanks 
the gentleman. Recognize the gentleman from New Jersey, Mr. 
Lance, 5 minutes for your questions, please.
    Mr. Lance. Thank you, Mr. Chairman. Good afternoon to you 
all, gentlemen. I was at the hearing in December. I was the 
vice chair then, as I am now. Mr. Terry was in the chair in 
December.
    I quote from the transcript, Mr. Kennedy, directly from the 
transcript of the December hearing on this matter. I had asked 
your colleague, Mr. Shimizu, about this whole matter, and I had 
stated, ``Takata's current view, based upon reliable 
information, does not support a nationwide determination of a 
safety defect in all vehicles equipped with the subject driver 
side inflators. This is not the view of the agency at the 
Federal Government''--obviously NHTSA--``that protects the 
American people, and so you are dramatically and diametrically 
in opposition to the view of NHTSA. Is that accurate?''
    And then Mr. Shimizu discussed this with his colleagues, 
there was a translation problem, but he then answered the 
question, and he said, quote, and this is direct quote from the 
transcript, ``Yes, correct, that is our statement.'' And then I 
went on to say, ''In conclusion, and we will be asking this of 
NHTSA later in the hearing, on November 26 NHTSA demanded a 
national recall''--and, of course, that was not the view of 
Takata at that time. What has changed, Mr. Kennedy, between 
then and now?
    Mr. Kennedy. Much has changed, much. At that----
    Mr. Lance. There has been one additional death.
    Mr. Kennedy. There was the one additional death that we are 
aware of----
    Mr. Lance. That certainly has changed.
    Mr. Kennedy [continuing]. In Texas. That was, as I think 
was also mentioned, was a vehicle that had been recalled 4 
years ago, unfortunately.
    Mr. Lance. But not to the owner. This was a subsequent 
owner.
    Mr. Kennedy. I know, and that is----
    Mr. Lance. That is an important factor for the American 
people to know, Mr.----
    Mr. Kennedy. It is a very important factor. A very 
important factor, I agree with you. But back to your original 
question of what has changed, at that time we had, I think, 
8,000 tests done. Now we have got 50,000 tests done. We have 
seen some patterns start to emerge in some of the testing and 
the data that we have accumulated. That is what has led us--and 
all of the other testing and analysis has been done by outside 
experts. We have hired experts--I think you have seen the 
Fraunhofer report now.
    Mr. Lance. Yes. I was the person who quoted.
    Mr. Kennedy. Yes.
    Mr. Lance. Moving on, the issue of ruptures was first known 
by Takata in 2004, and the first six deaths I believe occurred 
approximately in 2009, and so this has been an ongoing problem 
of great significance. In the last 6 months how much have you 
been fined? I believe it is $14,000 a day. How much in total 
have you been fined, Mr. Kennedy?
    Mr. Kennedy. I think Dr. Rosekind answered that. I think it 
was----
    Mr. Lance. I am asking for your answer, Mr. Kennedy.
    Mr. Kennedy. I believe it totals up to about $1.2 million.
    Mr. Lance. And have you paid that?
    Mr. Kennedy. To my knowledge, no.
    Mr. Lance. And why is that?
    Mr. Kennedy. That is part of the discussion and negotiation 
with NHTSA. They have agreed to suspend it as part of the 
Consent Order, but they have reserved the right to incur 
further penalties as they see fit.
    Mr. Lance. Now, based upon your testimony to the chairman 
and to the ranking member, is it possible that replacement 
airbags will continue to have ammonium nitrate in them?
    Mr. Kennedy. Yes, sir, they will. Some of them will.
    Mr. Lance. And you are confident that they will be safe for 
some period of time, or an extended period of time?
    Mr. Kennedy. We feel that they are safe, and that is why 
as--again, as part of the Consent Order, we are continuing to 
test outside of the scope of the recalls, and we are continuing 
to test to make sure that the remedy parts are safe.
    Mr. Lance. Should those who are having an airbag replaced 
ask whether or not their new airbag will contain ammonium 
nitrate, and perhaps ask for a different replacement airbag?
    Mr. Kennedy. I am--I have--not really sure how to answer 
that, sir.
    Mr. Lance. And are there new automobiles fresh off the 
assembly line that contain ammonium nitrate airbags?
    Mr. Kennedy. Yes, there are.
    Mr. Lance. Thank you.
    Mr. Kennedy. You are welcome.
    Mr. Lance. Mr. Bozzella, you indicate that the rate of 
compliance with recalls drops dramatically. And did I hear you 
right that it is 15 percent for older vehicles, and could you 
explain exactly the years involved where it would be as low as 
15 percent?
    Mr. Bozzella. Yes. I don't know that I mentioned exactly 
the numbers----
    Mr. Lance. Perhaps you did.
    Mr. Bozzella [continuing]. But you are exactly right, 
Congressman. The trend is that further out into the ownership--
--
    Mr. Lance. Yes.
    Mr. Bozzella [continuing]. Of a vehicle, the recall 
completion rate is lower.
    Mr. Lance. Um-hum.
    Mr. Bozzella. If the question is why is that, second and 
third owners----
    Mr. Lance. Yes.
    Mr. Bozzella [continuing]. These vehicles are often owned 
by second and----
    Mr. Lance. Yes.
    Mr. Bozzella [continuing]. Third owners----
    Mr. Lance. Yes.
    Mr. Bozzella [continuing]. They are difficult----
    Mr. Lance. Yes.
    Mr. Bozzella [continuing]. To find, and so the 
manufacturers are doing everything they can right now, working 
very hard to increase those completion----
    Mr. Lance. Thank you. In conclusion, because my time has 
expired, I am concerned about those who have vehicles that they 
have purchased not new. This would be people who might not be 
aware, necessarily, to the greatest extent of someone who has 
purchased a new automobile. We want to protect all of the 
American people, and this is of great concern. And I want to 
work with you and others, and the committee, to make sure that 
all Americans are protected. Thank you, Mr. Chairman.
    Mr. Burgess. Chair thanks the gentleman, gentleman yields 
back. Chair recognizes the gentlelady from New York, Ms. 
Clarke, 5 minutes for your questions, please.
    Ms. Clarke. I thank you very much, Mr. Chairman. I thank 
our panelists. The day before the subcommittee's hearing in 
December, Takata sent a letter to NHTSA in which the company 
rejected a national recall. Part of the stated reason for 
rejecting the national recall was Takata's contention that it 
was not required by law to make a good faith determination of 
whether its product contained a safety-related defect or to 
conduct a recall because Takata is not a manufacturer of motor 
vehicles, or of replacement equipment.
    Mr. Kennedy, this question was asked of Mr. Shimizu in 
December, but I want to hear from you now, do you agree with 
that statement made by your company in December?
    Mr. Kennedy. It sounds like a lot of legal talk to me. I am 
certainly not a lawyer.
    Ms. Clarke. It is not legal. It is very simple. It says 
here that it is your contention that you are not required by 
law to make a good-faith determination of whether a product 
contained a safety-related defect, or to conduct a recall 
because Takata is not a manufacturer of motor vehicles, or of 
replacement equipment.
    Mr. Kennedy. I really don't know the answer to that. I 
would have to do a little bit of research and get back with you 
on----
    Ms. Clarke. All right, very well. By entering into the 
Consent Order with NHTSA, it is my understanding that Takata 
has submitted to NHTSA's jurisdiction. Is that correct?
    Mr. Kennedy. I believe that would probably be the proper 
term.
    Ms. Clarke. That is correct?
    Mr. Kennedy. We have come to an agreement with NHTSA.
    Ms. Clarke. So that is correct?
    Mr. Kennedy. Yes.
    Ms. Clarke. Very well. Do you now agree that Takata is 
subject to the jurisdiction of NHTSA, at least as to the laws 
and regulations related to safety-related defects?
    Mr. Kennedy. Again, it is an area of the--you are asking me 
a law question that I am not really properly qualified to 
answer. I could certainly look into it and get back with you. I 
mean--but certainly we recognize NHTSA's authority, if that is 
really the question that you are asking, and we have worked 
very hard with NHTSA, especially over the past 3 or 4 months, 
to come to the agreement on the consent agreement, the 
preservation order, the DIRs----
    Ms. Clarke. So let me ask you this: Do you now agree that 
Takata is required to decide in good faith whether your 
products contain a safety-related defect?
    Mr. Kennedy. Well, we clearly did say, in the DIRs, that a 
defect may arise in some of the subject parts. So I guess the 
answer to that question would be yes.
    Ms. Clarke. Mr. Kennedy, is Takata paying for all of the 
replacement airbags?
    Mr. Kennedy. I am not sure what you mean by--are we----
    Ms. Clarke. Yes.
    Mr. Kennedy. We are selling them.
    Ms. Clarke. Well, there are airbags that now need to be 
replaced----
    Mr. Kennedy. Correct.
    Ms. Clarke [continuing]. Right? Are you paying for them?
    Mr. Kennedy. We are working with each one of the OEM--each 
one of our automaker customers to discuss financial 
responsibility, and we are----
    Ms. Clarke. What does that mean?
    Mr. Kennedy. That means that we are having discussions with 
each one of the----
    Ms. Clarke. So you are not paying for them?
    Mr. Kennedy. I wouldn't say that we are paying 100 percent 
for everything with every automaker.
    Ms. Clarke. So you are negotiating what you will pay and 
what you won't?
    Mr. Kennedy. Which is a normal course of business
    on----
    Ms. Clarke. I am just asking.
    Mr. Kennedy. Yes. It is a normal course of business in the 
automotive----
    Ms. Clarke. A New York Times article from May 20 stated 
that Takata said automakers shared the blame for this massive 
recall because ``testing specifications prescribed by the 
vehicle manufacturers failed to uncover faults.'' Is that 
correct?
    Mr. Kennedy. That was one of the conclusions from the 
Fraunhofer report that was----
    Ms. Clarke. But is that correct?
    Mr. Kennedy. We believe that is correct.
    Ms. Clarke. OK. Can you explain that statement a little bit 
more?
    Mr. Kennedy. Yes. What it means is, whenever a supplier 
provides a product to an automaker, there is a specification 
that you are required to meet. There is a certain set of tests 
that you have to run, a certain quantity of tests that you have 
to run, and we do that. And as a general rule, you know, we do 
that with every new product, we review it with the OEM, and 
they sign off on it and say, yes, we accept this, or no, we 
don't. And these products went through that process.
    So what we are--what the report was trying to say is that 
the specifications that were out there at the time don't--did 
not capture the issues that we are seeing in the field today.
    Ms. Clarke. So you are saying the manufacturers failed to 
uncover the faults, so----
    Mr. Kennedy. What we are saying is the specifications that 
we tested to, and provided parts to, did not encompass the 
scope of this problem.
    Ms. Clarke. And so they--because--you are saying that they 
failed to uncover these faults?
    Mr. Kennedy. I am not--I am maybe not going to quibble 
about the wording, but that is exactly--I mean, that is what--
--
    Ms. Clarke. So you are not taking any responsibility----
    Mr. Kennedy. No, ma'am, that is not what I said at all.
    Ms. Clarke. OK.
    Mr. Kennedy. That is not what I said at all.
    Ms. Clarke. OK. So you are saying they share the blame 
because they should have uncovered the faults during this----
    Mr. Kennedy. Well, I am----
    Ms. Clarke [continuing]. Testing of specifications? That 
is----
    Mr. Kennedy. What I am saying is that, in the automotive 
industry, products are developed to meet specifications. 
Typically, if you meet the specification, you provided a part 
that is acceptable.
    Ms. Clarke. Thank you, Mr. Kennedy.
    Mr. Kennedy. You are welcome.
    Ms. Clarke. Yield back, Mr. Chairman.
    Mr. Burgess. Gentlelady, Mr. Bainwol was trying to provide 
an answer for you as well.
    Ms. Clarke. OK.
    Mr. Burgess. With unanimous consent, Mr. Bainwol be allowed 
to answer.
    Ms. Clarke. Thank you, Mr. Chairman.
    Mr. Bainwol. I appreciate that, Mr. Chairman, and I say 
this not as a lawyer, or an engineer, or someone who negotiates 
these contracts, but the specs that are let out when a contract 
like this is negotiated relate to performance specifications, 
and do not relate to the fundamental notion that the product 
should be safe. You know, this is about the form of the 
deployment, and items like that, in terms of which cars it is 
going to be appropriately fitted for, but there is an 
understanding that the supplier will provide a product that 
complies with FMBSS. And part of that is making sure that the 
controlled explosion is a controlled explosion.
    Ms. Clarke. Thank you, Mr. Chairman.
    Mr. Burgess. Gentlelady yields back. The Chair thanks the 
gentlelady. Chair thanks Mr. Bainwol. Mr. Guthrie, you are 
recognized for 5 minutes for questions, please.
    Mr. Guthrie. Thank you very much. Mr. Kennedy, I guess I 
will direct this at you as well. I guess I am understanding--if 
you really don't know the root cause, then you really don't 
know if the product that failed was manufactured to 
specification. Now, the tests might have met specification, but 
you really--I mean, you--was it manufactured to specification, 
and it failed anyway, so therefore the specification came from 
the OEM was the issue, or--I mean, if you don't know the root 
cause, you don't really know the answer then, I guess, yes?
    Mr. Kennedy. Yes, that is part of the difficulty that we 
have with this issue. And I think you have heard Mr. Kelly talk 
about, you have heard Dr. Rosekind talk about it. It is a very 
multifaceted, very complex issue as to what is going on. And 
there are different types of inflators. You heard I think Dr. 
Rosekind say 10 different inflator types involved in this.
    Mr. Guthrie. Um-hum.
    Mr. Kennedy. And one of them, and the parts that we have 
gotten back in the past few months, we have seen what looks 
like a manufacturing defect that we think allowed moisture into 
the inflator. That is on one of those. The other ones, we 
haven't been able to make that determination.
    So, I mean, we have expended a lot of effort with a lot of 
experts----
    Mr. Guthrie. Yes, sir, that is----
    Mr. Kennedy [continuing]. To try to get to that, but, 
unfortunately, we have not yet got to a definitive root cause 
across every one of these inflators.
    Mr. Guthrie. And that leads--I understand. I am in the 
automotive--that is what my background is, automotive industry. 
So you get the product specifications, the blueprint, and you 
meet to that----
    Mr. Kennedy. Right.
    Mr. Guthrie [continuing]. And you ship to that. And if they 
fell within the specification, then that is an engineering 
issue. If you didn't manufacture to the specification, that is 
your issue. And----
    Mr. Kennedy. Right.
    Mr. Guthrie [continuing]. Seems like you don't know exactly 
where that is. But, following on what my friend from Tennessee, 
Ms. Blackburn, was talking about, I mean, if you don't know the 
root cause, and this is a question I don't know if we got a 
good answer to, how do you know the replacement parts or--that 
they bring in for the recall are not going to fail? I mean, 
how--what is the surety of that?
    Mr. Kennedy. Well----
    Mr. Guthrie. And I think Mr. Lance actually asked--tried to 
get to that as well.
    Mr. Kennedy. Yes, and that is a very good question. Many of 
the replacement parts that we are using are different designs 
now. Everything on the driver's side will be a completely 
different design. As I said, about 50 percent of what we 
shipped last month were with our competitor's inflators, that 
do not use ammonium nitrate, and have not demonstrated issues 
in the field, to my knowledge. That will go up to 70 percent 
here in the next month or so. And so we are looking to change 
to different inflator designs, or alternate designs for the 
replacement parts as quickly as----
    Mr. Guthrie. But you are already sending replacement parts 
now, right?
    Mr. Kennedy. We are sending--yes, and we have been sending 
replacement----
    Mr. Guthrie. So, I mean, how do you know those are--if you 
are going to bring in a car for a recall to replace, how do you 
know those aren't----
    Mr. Kennedy. Well, that is the reason that the Consent 
Order is written the way that it is, in order to require that 
we continue to test the remedy parts, and we continue to test 
outside of the scope of the recalls, in order to make that 
judgment.
    Mr. Guthrie. But you tested before you shipped the first 
product.
    Mr. Kennedy. We did, yes.
    Mr. Guthrie. And they passed the tests?
    Mr. Kennedy. Yes.
    Mr. Guthrie. And there could be a manufacturing defect that 
you did that made them fail, so how do you--so we don't know? I 
mean, you don't--until you know the recalls, you don't know 
that these replacement parts are not going to have the same----
    Mr. Kennedy. We have confidence in the ones we are making. 
The process has changed a bit over the years. And, as I said, a 
lot of them we are using alternate designs that really have 
never experienced issued, to our knowledge. But there is a 
percentage of them, and that is exactly why the Consent Order 
is written the way that it is, and why we are continuing to do 
the testing and the analysis that we are doing.
    Mr. Guthrie. OK. And I think you said earlier you are 
shipping--I think I wrote down about 700,000 replacement kits?
    Mr. Kennedy. Yes. We shipped 740,000 in May.
    Mr. Guthrie. And up to a million--and how much are you 
shipping daily? I guess you ship daily to the----
    Mr. Kennedy. Multiple--every day. And we get multiple 
trucks back every day with parts back from the field.
    Mr. Guthrie. And how are you prioritizing who gets--is it 
regional? You are prioritizing----
    Mr. Kennedy. You know, up to this point, we have been able 
to keep up with demand for replacement parts. There are a 
couple of part numbers that are on back order right now. We 
expect to have that back order completed in the next 2 weeks.
    Now, obviously, it is going to expand with this expansion 
when the letters start going out to the consumers, but that is 
why we are adding additional capacity both internally--we have 
got seven new inflator lines coming in over the next 6 to 12 
months. We have got additional inflator lines going in at our 
competitor's. We have got additional kit lines going in in our 
manufacturing facility. So we are continuing to ramp up----
    Mr. Guthrie. And you also have to maintain current 
production at the same time, right?
    Mr. Kennedy. We also have to maintain current production. 
That is a very good point.
    Mr. Guthrie. I have a question with the other, since we 
have--just--would you all talk about the replacement part, if 
it is in your--if you would like to comment on the replacement 
kit process that is going on. Is that anything you guys would 
like to comment on, or--is that within your purview?
    Mr. Kelly. Thank you, Congressman. Yes, we will be looking 
at the replacement parts, and the efficacy of the replacement 
parts, as part of our investigation.
    Mr. Bainwol. And I would simply note that the complexity of 
this one is enormous. It is not just the 30, 34 million units 
in the U.S. There are global issues as well. And so production, 
allocation, prioritization are all hugely significant issues. 
And that is why we think that, in this instance, NHTSA was 
appropriate to assert its coordination capacity. And there is 
no other way to solve this in a fashion that guarantees 
fairness, and guarantees as expeditious a response as possible, 
so that is why we have done that.
    Mr. Bozzella. I would just add, Congressman, that the 
manufacturers are doing what they need to do to take care of 
their customers, knowing what they know now.
    Mr. Guthrie. Thanks a lot, and I appreciate it. And, you 
know, I have worked in manufacturing. We didn't have any what 
we would call inverted diamond, or safety issues in our 
product, but trying to find the root cause--and when you can 
recreate the problem, that is when you know you found the root 
cause. And we are all anxious to get to that point, so thank 
you for----
    Mr. Kennedy. Yes. And that has been one of the most 
difficult parts of this whole thing, is--as I said, any one 
failure is unacceptable to us. But, in the analysis, the 
failure rate is so low it is hard to, you know, as you----
    Mr. Guthrie. Recreate the problem.
    Mr. Kennedy [continuing]. Know, turn it on and turn it off. 
We just--we haven't been able to do that.
    Mr. Guthrie. Once you can do that, you know what is turning 
it on and turning it off.
    Mr. Kennedy. Then we just want to turn it off, yes.
    Mr. Guthrie. Well, we are looking forward to getting to the 
bottom of it. Thank you. I yield back.
    Mr. Kennedy. Thank you.
    Mr. Guthrie. I am out of time.
    Mr. Burgess. Chair thanks the gentlemen, gentleman yields 
back. Chair recognizes the gentleman from New Jersey, 5 minutes 
for your questions, please.
    Mr. Pallone. Thank you, Mr. Chairman. We have been hearing 
conflicting reports on whether the--this is for Mr. Kennedy. We 
have been hearing conflicting reports on whether the 
replacement parts are different than the defective inflators. 
Some news reports have talked about a change in the chemical 
composition and shape of the propellant used in the inflators. 
At the December hearing Mr.--I guess it is Shimizu--of Takata 
talked about improvements made to the manufacturing process in 
recent years that said the inflators were the same. So I just 
wanted to understand this issue a little better, Mr. Kennedy. 
Is there any difference between the replacement inflators and 
the original defective inflators?
    Mr. Kennedy. It depends on each one of the different 
inflators that you are talking about. As I mentioned, about 50 
percent of what we have been sent last month was outside 
inflators. Those are obviously completely different than our 
original inflators. On the driver's side we will be using 
either alternate Takata designs or alternate outside for 
everything. And the driver's side is the one that has had the 
most issues, and the most severe issues.
    On the passenger sides, right now there are a percentage of 
those that are outside inflators, but there is still a 
percentage that are the same design inflator that was in the 
original modules, but, obviously, manufactured at a later time.
    Mr. Pallone. All right. In Takata's defect information 
report to NHTSA regarding PSDI-4 inflators, Takata notes that, 
and I quote, ``Continues''--``It continues to produce a small 
number of PSDI-4 inflators for use as remedy parts. Takata 
intends to cease production of the subject inflators, including 
for use as remedy parts.'' So, again, when does Takata intend 
to stop producing the PSDI-4 inflators as replacements?
    Mr. Kennedy. We have a couple of carmakers with some older 
vehicles that have not qualified a new inflator yet. We are 
working--and they have been working very hard to do that with 
us, and with our competitor. And what the plan is in that DIR 
is--I think they call it phase four. The phase four would be to 
go out and get all of the remedy parts that we supplied that 
were of that design, the PSDI-4.
    Mr. Pallone. But then when that happens, then they stop 
producing these PSDI-4 inflators as replacement, what will 
Takata use to replace the old ones?
    Mr. Kennedy. We have--it depends on the vehicle and the 
manufacturer. Some of them are our competitor's inflators. We 
are buying inflators primarily, I think, on driver's side for--
from TRW and Autoleve, and we also have a later generation 
Takata inflator called PSDI-X with desiccant in it that has 
proven to be very robust, and some of them will be in PSDI-X.
    Mr. Pallone. But then are we are to assume that the reason 
Takata is stopping its production of these PSDI inflators is 
because they are unsafe?
    Mr. Kennedy. The PSDI--the batwing propellant geometry was 
one of the factors that was called out in some of the testing 
and the analysis that we have done, and some of our outside 
experts have done, as a factor. So, in order to just eliminate 
that factor completely, we said we would quit making that----
    Mr. Pallone. So you----
    Mr. Kennedy. We don't make it for production any longer.
    Mr. Pallone. You are not sure----
    Mr. Kennedy. It was only for a replacement part.
    Mr. Pallone [continuing]. But you suspect there could be a 
problem?
    Mr. Kennedy. Correct.
    Mr. Pallone. OK. Now, you say you are going to replace the 
inflators in four stages. You mentioned, I guess, that the 
fourth stage will include subject inflators previously 
installed as remedy parts, right?
    Mr. Kennedy. Yes, sir.
    Mr. Pallone. Well, will the people that had their original 
PSDI-4 inflators replaced with the new PSDI inflators, say, for 
example, in December 2014, will they have to have them replaced 
again?
    Mr. Kennedy. Anyone that had an inflator replaced with a 
PSDI-4 inflator would have to have that replaced again, yes, 
that is correct.
    Mr. Pallone. So I imagine that someone who has already had 
their inflator replaced as part of this recall may not realize 
that they have had--that that have to have it replaced again. 
So how do you plan to communicate that to the consumer?
    Mr. Kennedy. You know, that is another great question, sir, 
and that is another part of the Consent Order and agreement we 
have with NHTSA. We are going to work with NHTSA, and the 
automakers, to do a proactive safety campaign. We have been 
working with a professional media firm that has done these kind 
of things in the past. We know that Honda, last year, had 
initiated kind of a media campaign where, like, on your cell 
phone, if you called up Google, there would be a banner at the 
bottom that said ``check your airbag.'' We have talked to 
Honda. We know what worked, what didn't work.
    So we have 60 days from the Consent Order signing on May 19 
to come back with this plan to NHTSA, and work with the OEMs in 
order to help increase that visibility, and get that message 
out to people whose cars need to come back in.
    Mr. Pallone. All right. Thank you. Thank you, Mr.----
    Mr. Kennedy. You are welcome.
    Mr. Pallone [continuing]. Chairman.
    Mr. Burgess. Gentleman yields back. Chair thanks the 
gentleman. Chair recognizes the gentleman from Houston, 5 
minutes for your questions, please.
    Mr. Olson. Thank you, Mr. Chairman, and welcome to our 
witnesses. My first questions are for you, Mr. Kennedy. One 
theme that has come through loud and clear at this hearing from 
Dr. Rosekind and all of you all is the lack of--we still don't 
know about the root cause of these defects. We have ties to 
humidity, heat, desiccants, batwings, all sorts of things, but 
no root cause, and that bothers me.
    The plane I flew in the United States Navy was a P-3 Orion. 
It was a modified version of the Lockheed L-10 L-182 Electra. 
That plane had a bad defect. It was called roll mode. That 
meant the wings fell off the plane. That was the root cause of 
two crashes. It is hard to find because those planes were torn 
up when they hit the ground. They didn't know what happened, 
but yet we found out what happened, found the root cause, and 
those planes have been flying for 60 years in our navy.
    And so I have heard you say that you know that the--there 
is heat, humidity, desiccants, propellants. You have mentioned 
there is a tie with--you have some propellants out there 
without desiccants, correct?
    Mr. Kennedy. Correct.
    Mr. Olson. How many of those, sir, are out there right now?
    Mr. Kennedy. I would have to check and get back with you, 
sir, but it is a significant number.
    Mr. Olson. If I am in my home in Houston, Texas, because we 
are 95--95 percent humidity and 95 degrees, so we are ground 
zero for these problems. How about there? Do I tell my people 
back home, guys, they are all here, 100,000 cars, 50,000 cars? 
Any idea?
    Mr. Kennedy. No, I do not know the number, sir.
    Mr. Olson. What is the problem, then, with finding these 
cars and putting desiccant in there, replacing it with a 
desiccant? Make sure--if that is some factor, how about take 
that out of the equation? Put that in it right now?
    Mr. Kennedy. That is--well, that is exactly what we are 
doing with every one of those PSDI, PSDI-4, PSDI-4K inflators.
    Mr. Olson. OK. So----
    Mr. Kennedy. That is exactly what the first DIR is.
    Mr. Olson. So by the end of this year there will be no bags 
out there without some sort of desiccant with their propellant, 
correct? With that ammonium nitrate, is that right?
    Mr. Kennedy. No, that is not what I am saying, sir.
    Mr. Olson. But that is a problem. You said that is one of 
the problems. We don't know what going out there. I think it is 
safe, to me--that is--it is a propellant having some sort of 
problem with the humidity and the heat, how about putting a 
desiccant with all the propellants? Make sure that goes out of 
the equation, maybe find the root cause?
    Mr. Kennedy. Or an alternate inflator. That is the plan 
with the ones that have shown to be issues in the field, which 
are these--what we have referred to as PSDI, PSDI-4s. That is 
what we are doing. The later inflators that we are replacing 
those with will either have desiccant, or they will be from one 
of our competitors.
    Mr. Olson. OK. My questions now are for the gentlemen here 
from the manufacturers. There will be big costs with these 
recalls. Who is going to pay for that? Will it be Takata, the 
manufacturers, the dealers? I mean, who is going to pay for all 
this recall? Mr. Bainwol, any idea, sir?
    Mr. Bainwol. I can tell you that consumers do not pay. So 
that is the critical point. My hunch is there may be some 
debate about who actually bears the costs. I think our 
perspective on where that should end up is pretty clear.
    Mr. Olson. Mr. Bozzella?
    Mr. Bozzella. Yes, I would agree with Mr. Bainwol. I think 
the consumer will not pay. We need to do--we need to take care 
of the customer. Manufacturers need to take care of the 
customer, working with the dealers, the suppliers, and with the 
regulator to do so.
    Mr. Olson. How about the dealers? What are you hearing 
about them about the costs? Because, for example, my truck had 
a little small recall notice, and I got that taken care of when 
I replaced the oil. So I went there to have, like, 5 minutes 
done. I probably was there for about an hour having something 
fixed. Any reply from those guys how this is hurting their 
business, spending more time on recalls than actually selling 
cars and fixing cars they would normally have to maintain?
    Mr. Bainwol. Well, the dealers come out whole. They are--
they are reimbursed for the recall. And it is oftentimes 
governed by State franchise rules, but they are made whole.
    Mr. Olson. And one final question for you, Mr. Bainwol and 
Mr. Bozzella. Remember in the first panel I talked about the 
last victim of these airbags, a guy named Carlos Saliz from 
Spring, Texas. As you know, he bought a used car, a 2002 
Accord, and defect came out, the recall notice came out in 
2011. He got in a crash this year, never knew that his car was 
defective. How can you guys help make sure we track those cars 
from recall to actual owner so there is not--sort of gap? 
Because he had no chance to have that recall notice. He had no 
idea his car was defective.
    Mr. Bainwol. It is an important point, and it is one we are 
very sensitive too. The fundamental notion with safety is that 
it is a shared responsibility.
    Mr. Olson. Yes.
    Mr. Bainwol. We have a piece of it, consumers have a piece 
of it, the dealers do. Certainly NHTSA, and certainly the 
States. And so we have all got to do a better job of tracing 
the ownership so that we can communicate. And that is one of 
the reasons why we have gone through this exercise, as I 
mentioned in my opening statement, about conducting research to 
figure out what makes people go in and get the job done. We 
have got to find a way to turn that trigger so they go in and 
get the work done.
    Mr. Bozzella. It is a great question, and I would simply 
add to that that is, as I mentioned in my testimony, that we 
ought to consider looking at the point at which an owner 
registers or re-registers his or her car as a point for further 
notification. In the case of the incident that you mentioned, 
had that approach or procedure been in place, the--that owner 
may have been notified at the point of registering that used 
car that there was an open recall. So we think that merits 
some--that is worthy of merit.
    Mr. Olson. Thank you. I am out of time. I yield back.
    Mr. Burgess. Chair thanks the gentleman, gentleman yields 
back. Chair recognizes the gentleman from Florida, Mr. 
Bilirakis, 5 minutes for your----
    Mr. Bilirakis. Thank you----
    Mr. Burgess [continuing]. Questions, please.
    Mr. Bilirakis [continuing]. Mr. Chairman. I appreciate it 
so very much, and thank the panel for their testimony.
    Mr. Kennedy, can you verify that some cars that were 
previously recalled, and supposedly fixed, will have to be 
recalled again for a second airbag replacement?
    Mr. Kennedy. Yes, sir.
    Mr. Bilirakis. Yes. Do you have any initial numbers on how 
many consumers are affected? If not, when will you know, and 
how will the consumers be notified?
    Mr. Kennedy. You mean consumers that would have had to 
bring their cars in twice?
    Mr. Bilirakis. Correct.
    Mr. Kennedy. I don't have that information yet, sir. As I 
think Dr. Rosekind said, a lot of the OEM, a lot of the 
automakers, are still entering their VINs, and getting the 
quantities, and the exact vehicles. So, after that, it would be 
easier----
    Mr. Bilirakis. How do you plan to notify the consumers?
    Mr. Kennedy. We are still working on that plan. As part of 
the consent, there was--we were given 60 days to develop this 
plan, and we certainly want to do it in conjunction with the 
automakers. We don't want to do something that is going to be 
at odds with the automakers. So we have, as I mentioned, a 
media firm that is familiar with these types of activities. We 
have some ideas on paper we are working, and we will certainly 
be reviewing those with NHTSA, and having NHTSA's involvement, 
as well as the automakers.
    Mr. Bilirakis. So why weren't these issues dealt with the 
first time they were recalled? In other words, why--I don't--
there is just no excuse. It is inexcusable, as far as I am 
concerned, but give me an answer.
    Mr. Kennedy. It is----
    Mr. Bilirakis. Why weren't these issues dealt with the 
first time?
    Mr. Kennedy. It is a fair question, sir, and it is a 
difficult question. I think you have heard from a lot of 
different people today, it is an extremely complex issues. 
There are--when we first started seeing some issues back in 
2005, we did national recalls on a large number of parts. And 
we thought we had identified root causes, we thought we had 
gotten everything from the field, we thought we are doing all 
the right things. And then we started seeing these sporadic 
issues in the field, and that is what led to the action that 
started last year.
    So it has been very elusive to us, and it has been very, 
very difficult to get a consistent pattern that would tell us 
exactly what the root cause is----
    Mr. Bilirakis. OK, Mr. Kennedy, let me--I have a couple 
more questions.
    Mr. Kennedy. OK.
    Mr. Bilirakis. How can you possibly assure consumers, my 
constituents, the second replacement will be effective, and a 
third replacement will not be necessary?
    Mr. Kennedy. Well, on most----
    Mr. Bilirakis. Could you assure my constituents that will 
be the case?
    Mr. Kennedy. I mean, on most of the replacement parts, as I 
said, they are going to be later designs, or from our 
competitors, when we are putting those in. There are still a 
few, and that is why, as part of the Consent Order, we are 
still testing the remedy parts to make sure that those are 
going to be sufficient for the life of the vehicle, and why we 
are continuing to test outside of the ranges of the recalls 
that were in the DIRs that were announced a couple of weeks 
ago.
    So we are trying to cover that. I can't tell you right now 
that everything is done, but we are--we have anticipated that 
problem, and we have an agreement with NHTSA that allows us to 
continue to look at that. And if actions are required, we will 
take actions.
    Mr. Bilirakis. OK. Since the first airbag inflator ruptured 
in 2004, it is true that Takada tested roughly 128 airbags from 
2004 in--is that correct?
    Mr. Kennedy. I am not familiar----
    Mr. Bilirakis. From 2004 to 2008, is that correct?
    Mr. Kennedy. Yes. I am not familiar with that number, sir. 
I can double check and----
    Mr. Bilirakis. Please get----
    Mr. Kennedy [continuing]. Get back with you.
    Mr. Bilirakis [continuing]. Back to me on that.
    Mr. Kennedy. Yes, I will.
    Mr. Bilirakis. Do you believe that enough was done to 
investigate this issue and bring awareness to consumers on the 
potential risk and threat of defective airbags? Was enough 
done?
    Mr. Kennedy. On--you mean on those original ones?
    Mr. Bilirakis. Yes, the original----
    Mr. Kennedy. Yes.
    Mr. Bilirakis [continuing]. One.
    Mr. Kennedy. We were able to identify what we thought, and 
what our automaker customers thought, was a very solid root 
cause. We had manufacturing data, we had test data. We were 
able to recreate the problem. But, clearly, there was something 
else going on----
    Mr. Bilirakis. Could more have been done?
    Mr. Kennedy. Again, I--you could probably always say more 
could be done, but what we did, we thought, and our automaker 
customers thought, was sufficient to get to root cause, and to 
take action, and that is what we did.
    Mr. Bilirakis. Well, Mr. Bainwol--one last question, Mr. 
Chairman. Have any companies requested that Takata remove 
ammonium nitrate from the propellant formula used in the airbag 
inflators?
    Mr. Bainwol. That is an answer I don't know the answer to--
question, and I will find out and report back.
    Mr. Bilirakis. Please get back to us. Thank you very much. 
I yield back, Mr. Chairman.
    Mr. Burgess. Chair thanks the gentleman, gentleman yields 
back. Chair recognizes the gentleman from Oklahoma, Mr. Mullin, 
5 minutes for your question, please.
    Mr. Mullin. Thank you, Mr. Chairman. Mr. Kennedy, you 
have--I have actually sat here and enjoyed watching you. You 
are very skillful on the way you approach the answers. I could 
probably take a lesson or two from that. But, at the same time, 
we just don't seem to be getting the answers. I mean, you can 
tell the frustration that this panel is getting. We have got a 
young lady that is sitting over your shoulder that is bearing 
the scars of a mistake that was made, and we are still not 
getting the answers. I mean, I am a business owner. I 
understand when we fell. I understand when we make a mistake.
    Mr. Kennedy. Um-hum.
    Mr. Mullin. But now what? What the solution was is we did a 
recall, and we replaced them with other things that were still 
faulty? There is no excuse for that. Zero. Maybe this panel is 
just looking to hear you say, we screwed up. But I know that 
is--cause legal issues for you all. But a screw up is a screw 
up. Taking blame is just that.
    Mr. Kennedy. Well, we----
    Mr. Mullin. Hey, we messed up. I mean, we heard just a 
while ago, who is going to be responsible for this. I don't 
know. What do you mean we don't know? Who made the product? 
Whose product was it? Whose name was on it? That is who should 
pay for it. I just wonder--I--I am sitting here thinking, well, 
OK, maybe that is why we haven't been moving very fast, because 
you haven't taken ownership of it.
    At the same time, we have got--not telling how many 
vehicles are out there. More young ladies, or young men, are 
going to bear the scars again. Or worse than that, someone is 
going to not be able to finish out their life. What is that 
worth to you? How do you put a dollar amount on that? What if 
that was your daughter? I have got three at home. I can tell 
you what it is worth. Do you have a daughter?
    Mr. Kennedy. I have a daughter and a son.
    Mr. Mullin. And a son. Wouldn't you be pretty passionate 
about it? Wouldn't you want----
    Mr. Kennedy. Absolutely.
    Mr. Mullin [continuing]. The owner to be owning up to it, 
and say, we are going to do whatever it takes, we will take the 
responsibility for it?
    Mr. Kennedy. Yes, and we believe we----
    Mr. Mullin. But, you know--but, sir, you are still making 
what--we believe. 2004, we are in 2015. How long have you been 
making airbags?
    Mr. Kennedy. Since, I believe, 1987.
    Mr. Mullin. How many more studies do you need to have?
    Mr. Kennedy. As I said, and I think--I am not trying to be 
evasive. I mean, you have heard it from other people that have 
been involved in this, they are very smart people too. It is--
--
    Mr. Mullin. Evasive?
    Mr. Kennedy [continuing]. A very multifaceted issue that we 
do not----
    Mr. Mullin. Multifaceted. That is a great term to use. We 
use political terms here all the time. We know how to talk a 
little bit around in circles. We are looking for ownership.
    Mr. Kennedy. Well, we----
    Mr. Mullin. I understand it is complex. The product you 
make is very complex. I have been hit in the face with a few of 
them.
    Mr. Kennedy. Me, too.
    Mr. Mullin. Yes. Fortunately, I have survived. I understand 
the issue about--from impact to stopping you, the safety behind 
it, this can be complex, but a problem is a problem. It is not 
that complex. You do what it takes. You know, you have to 
figure out, OK, what is a life worth? Put a dollar amount on 
it? I don't know how you can.
    Mr. Kennedy. I don't know how you can either, sir----
    Mr. Mullin. You get it replaced.
    Mr. Kennedy [continuing]. And we certainly do not.
    Mr. Mullin. Instead you said that the complexity of it, we 
don't really know the makeup of it, but our competitors are 
finding out a product to replace. Your competitors?
    Mr. Kennedy. Well, we----
    Mr. Mullin. You guys--it sounds like, to me, you are 
willing to do anything but take ownership. Your competitors? I 
can't imagine sitting up here and saying, my competitor is 
going to fix my problem.
    Mr. Kennedy. Well, we were doing that in order to get parts 
in the field faster. Some of our competitors have products 
that----
    Mr. Mullin. You have known about it since 2004.
    Mr. Kennedy. Not to the level that we have here, sir. 
2004----
    Mr. Mullin. You--in 2004 you identified there was a 
problem. You said that you could recreate the problem. You knew 
there was a problem.
    Mr. Kennedy. And we thought we had a root cause at that 
time too. We thought the----
    Mr. Mullin. Did you replace them?
    Mr. Kennedy [continuing]. Issue was closed. Yes. We 
initiated----
    Mr. Mullin. How did you track them down?
    Mr. Kennedy. Pardon me?
    Mr. Mullin. How did you track them down?
    Mr. Kennedy. We worked with the automakers that were 
involved.
    Mr. Mullin. But we still haven't got people notified.
    Mr. Kennedy. And that is a problem.
    Mr. Mullin. I mean, I----
    Mr. Kennedy. That is a huge problem.
    Mr. Mullin. I raise cattle, and if my cow, for some reason, 
I sell, and it ends up in California, and somehow ends up with 
mad cow disease, it is not born with a birth certificate, or a 
serial number, or----
    Mr. Kennedy. Right.
    Mr. Mullin [continuing]. Or a bar code, but yet we are able 
to track it all the way back to my farm.
    Mr. Kennedy. Right.
    Mr. Mullin. And we can't do that with an airbag?
    Mr. Kennedy. Well, we can tell you exactly what airbag we 
sent, and the OEMs--the automakers can tell you what vehicle it 
is in. The issue, for the most part, has been getting that 
recall rate back up.
    Mr. Mullin. No, it is the cost. I believe we already found 
the root of the problem. It is the cost.
    Mr. Kennedy. No, sir, I----
    Mr. Mullin. No one wants----
    Mr. Kennedy [continuing]. Disagree with that.
    Mr. Mullin [continuing]. To bear the cost.
    Mr. Kennedy. I disagree with that.
    Mr. Mullin. If we wanted to find the problem, you cannot 
convince me we couldn't find a solution. Except----
    Mr. Kennedy. We----
    Mr. Mullin [continuing]. We haven't even agreed on the 
panel that is in front of me who is going to pay for it. I 
think that is the root of the problem. Mr. Chairman, I yield 
back.
    Mr. Burgess. Chair thanks the gentlemen, gentleman yields 
back. The Chair recognizes the gentleman from Illinois, Mr. 
Kinzinger, 5 minutes for questions, please.
    Mr. Kinzinger. Well, thank you, Mr. Chairman, and for the 
four of you, thank you for being here, and thanks for being 
willing to talk with us about these very important issues.
    You know, at a December haring I asked our panel, which 
included BMW, Toyota, and Honda, if they agreed that sharing 
OEM part numbers and other identifiable information with the 
automotive recycling industry would help increase safety. They 
agreed, and expressed support for the efforts to improve 
methods to identify parts, and to share part numbers with 
recyclers. Earlier this year, in February, Transportation 
Secretary Fox stated that he also supports auto manufacturers 
providing part numbers to recyclers, and that, furthermore, 
manufacturers should provide this information in an easy to use 
format. The key here is that this approach would not require 
the creation of any new Government program or bureaucracy, but 
it is something that the industry should tackle on its own.
    To Mr. Bozzella and Mr. Bainwol, it appears that we have a 
unique instance where regulators and industry seem to agree on 
an approach to address a problem in large part because everyone 
understands that sharing this information will improve safety. 
My question is this, if you know the answer, when and how do 
your members plan on making this information available to 
recyclers, and are you aware of any discussions in the industry 
to help share this information to improve safety? Mr. Bozzella? 
Yes, if you could go first?
    Mr. Bozzella. Congressman, I am--I don't know the answer to 
your question. I will certainly go back to our members that 
were on the panel and get back to you.
    Mr. Kinzinger. OK. And, Mr. Bainwol, do you have any----
    Mr. Bainwol. Likewise.
    Mr. Kinzinger. OK. So, yes, if you guys could--because I 
understand that you may be unaware of the issue, if you could 
maybe get that information and follow up with my office, that 
would be helpful, as we continue to explore this issue going 
forward. I will ask you this, what can your organizations do to 
kind of help facilitate this, and to make something like this 
happen?
    Mr. Bozzella. I will get--we will have a conversation 
within our association, and we will be able to get back to you 
after that point.
    Mr. Kinzinger. OK, great.
    Mr. Bainwol. So I would simply note that this question of 
resolving, and getting expeditious recalls done, is an 
important priority for everybody, and we do view this as, as I 
said earlier, a shared responsibility, and we are willing to 
work with anybody to make sure we can get this job done as 
quickly as humanly possible.
    Mr. Kinzinger. OK, great. Mr. Chairman, that is all the 
questions I have. If you would like my time, I can yield it to 
you, or I can yield back.
    Mr. Burgess. Will accept you yielding back----
    Mr. Kinzinger. I yield back.
    Mr. Burgess [continuing]. And I thank the gentleman. The 
gentleman yields back. Chair recognizes Ms. Clarke.
    Ms. Clarke. Thank you, Mr. Chairman. I would like to 
request unanimous consent to submit a written statement of the 
American Car Rental Association and the Consumers for Auto 
Reliability and Safety into the record.
    Mr. Burgess. Without objection, so ordered.

    [The information appears at the conclusion of the hearing.]
    Ms. Clarke. Thank you, sir.
    Mr. Burgess. I will recognize myself just for one follow 
up. And I dwelled a lot on the ammonium nitrate as a 
propellant, and this question really is for anyone. My prior 
life, I was a physician. I did work some in emergency rooms, 
and I remember airbag deployments with sodium azide, and I 
remember burns, and eye injuries, forearm burns, knee burns 
when the bag went off. But I also recall that there were 
environmental concerns about sodium azide, and Mr. Kinzinger 
brought up about salvage yards, and there was concern about 
this sodium azide just eventually getting into the environment.
    So are there any other propellants that are being worked 
on? Is there, like, a--purely a gas propellant, carbon dioxide 
or something that can--or nitrogen, something that wouldn't 
have the characteristics--the explosive characteristics of 
ammonium nitrate, or the toxic characteristics of a sodium 
azide?
    Mr. Kennedy. Yes, sir, there are a wide variety of 
inflators out there. We call them cold gas inflators. They are 
just a cylinder that is filled with gas under high pressure, 
and you have a small ignitor that hits a little burst disc, and 
the gas comes out. There are some that we call hybrids that 
have gas, and then have a little bit of propellant that kind of 
heats it up. Usually it is not ammonium nitrate in most of 
them. Then there are alternate solid fuels out there, primarily 
guanidine nitrate is what most of the industry uses now, and 
what we are transitioning to.
    We can provide all kinds of information, if you would like 
to take a look at--and some----
    Mr. Burgess. Well----
    Mr. Kennedy [continuing]. Are better in other applications 
than others.
    Mr. Burgess. What is the barrier for getting something that 
is less explosive than ammonium nitrate, and less toxic than 
sodium azide?
    Mr. Kennedy. You know, it really goes back to some of the 
tradeoffs that I was talking about earlier, size, weight, 
performance.
    Mr. Burgess. Cost?
    Mr. Kennedy. Well, and cost is certainly one of them too, 
yes. I mean, some of those gas inflators are bigger, so you--it 
is harder to get them in a steering wheel, for instance. So 
there are those kind of tradeoffs. But we can certainly provide 
any kind of information that you are interested in seeing.
    Ms. Clarke. I would appreciate you making that available to 
the subcommittee. I think that would be helpful to us.
    Mr. Kennedy. Very well, Chairman Burgess.
    Mr. Burgess. Well, seeing there are no further members 
wishing to ask questions, I do want to thank all of our 
witnesses for their participation in today's hearing. It has 
been a long one. Pursuant to committee rules, I remind members 
they have 10 business days to submit additional questions for 
the record. I ask the witnesses submit their response within 10 
business days upon receipt of those questions. And, without 
objection, subcommittee is adjourned.
    [Whereupon, at 5:16 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
    
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    [Mr. Kennedy's answers to submitted questions have been 
retained in committee files and also are available at  http://
docs.house.gov/meetings/IF/IF17/20150602/103546/HHRG-114-IF17-
Wstate-KennedyK-20150602-SD005.pdf.]

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    [Mr. Kelly did not answer submitted questions for the 
record by the time of printing.]

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    [Mr. Bainwol did not answer submitted questions for the 
record by the time of printing.]


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