First appeared in DC Sources
By Aron Solomon
As first reported by NPR, ARC Automotive, a Tennessee-based company, is refusing to recall 67 million air bag inflators, despite a request from the National Highway Traffic Safety Administration (NHTSA) to do so.
The NHTSA has concluded after an eight-year investigation that ARC front driver and passenger inflators have a safety defect that creates an unreasonable risk of death and injury.
The agency is demanding that ARC Automotive recall the inflators in the US because they could explode and hurl shrapnel. The company has argued that the recall demand exceeds the agency’s legal authority and that manufacturers, not equipment manufacturers like ARC, must do recalls.
The company could be heading for a legal battle with US auto safety regulators.
If ARC Automotive continues to reject the recall, the National Highway Traffic Safety Administration (NHTSA) might arrange a public hearing and file a lawsuit to compel the company to issue a recall. As a consequence, the company may face legal penalties and be obligated to provide compensation or pay fines to individuals impacted by faulty airbag inflators.
These penalties could be criminal or civil. The penalties for violating federal safety regulations can include fines, imprisonment, and civil penalties. The specific penalties would depend on the nature and severity of the violation, as well as the applicable federal and state laws.
As New Jersey injury lawyer Jeffrey Zenna points out:
“Imagine relying on an airbag to protect you, only to have it explode or fail to deploy when you need it most. It’s a nightmare scenario that can cause horrific injuries or even cost someone their life. When airbags go wrong, it’s our job to hold the responsible parties accountable, seek justice for the victims, and push for better safety standards.”
ARC is simply on the wrong side of both public relations and automotive history.
It’s tough for any company to rebound from the brand damage that ARC Automotive is doing right now. There is a massive window for potential loss of customers and business due to the ensuing controversy. Airbag manufacturers are businesses that exist for our safety – that’s literally all they’re here to do.
Fighting a recall is the worst-case scenario when it comes to public relations. Back in 2019, the non-defunct Takata Corp. was responsible for the largest recall in automotive history.
The Takata recall began in 2008 when reports of airbag ruptures and injuries started emerging. Takata Corporation, a Japanese automotive parts manufacturer, supplied faulty airbag inflators to numerous automobile manufacturers, including Honda, Toyota, Ford, General Motors, BMW, and many others. Initially, the recall was limited to certain regions with high humidity, such as Florida and other Gulf Coast states in the United States. However, it later expanded to include vehicles worldwide due to concerns about the long-term safety of the affected airbags.
Takata Corporation eventually went out of business due to the financial and legal repercussions of the airbag recall. The extensive recall and associated lawsuits placed a significant financial burden on the company, leading to its bankruptcy.
Ultimately, Takata’s failure was a brand trust issue, yet it’s one that ARC doesn’t seem to be capable of learning from. There’s no path back to consumer trust from where ARC finds itself today.
About Aron Solomon
A Pulitzer Prize-nominated writer, Aron Solomon, JD, is the Chief Legal Analyst for Esquire Digital and the Editor-in-Chief for Today’s Esquire. He has taught entrepreneurship at McGill University and the University of Pennsylvania, and was elected to Fastcase 50, recognizing the top 50 legal innovators in the world. Aron has been featured in Forbes, CBS News, CNBC, USA Today, ESPN, TechCrunch, The Hill, BuzzFeed, Fortune, Venture Beat, The Independent, Fortune China, Yahoo!, ABA Journal, Law.com, The Boston Globe, YouTube, NewsBreak, and many other leading publications.