The global auto industry had plenty to worry about in 2014 as it navigated shifting technological and economic tides, the usual brutal forces of competition and consolidation, and a host of other threats: volatile fuel prices, the technological arms race toward battery- and hydrogen-electric vehicles, maturing developed markets, the rise of mobility-sharing apps such as Uber and the specter of self-driving cars. But an even greater horror stalked the auto industry this year, leaving a trail of dead customers, baffled executives and livid regulators: Takata's exploding air bags.
The Takata scandal has largely flown under the public's radar, with GM's defective ignition switches dominating headlines in the United States. But while GM's problems were the long-term consequence of well-documented dysfunction in the company's culture and its relationship with former in-house parts supplier Delphi, the Takata scandal has touched nearly every automaker in the business.
The industry's broad exposure to Takata Corporation's defective air bags — their inflators can explode when the air bags are deployed in high temperatures or humidity, sending shrapnel flying — speaks to the deep cost pressures that all automakers face. More than 16 million vehicles from 11 automakers have been recalled; only by selling parts that customers never see to brands as diverse as Honda and BMW can suppliers such as Takata generate the high volume they need to set competitive prices.
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