Products Liability Law Daily ARC admonished for hindering progress of air bag inflator investigation
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Thursday, October 13, 2016

ARC admonished for hindering progress of air bag inflator investigation

By Colleen Kave, J.D.

The National Highway Traffic Safety Administration’s (NHTSA) Office of Defects Investigation (ODI) has expressed concern regarding ARC Automotive, Inc.’s behavior in connection with an engineering analysis pertaining to possible ruptures of air bag inflators manufactured by the company. In a letter to ARC’s CEO, Michael Goodin, ODI alleged that the company is not being forthcoming with the information that it is legally obligated to supply, nor is it being cooperative in aiding NHTSA’s ongoing investigation of the potentially serious safety defect.

Following a report of a fatal crash in Canada, ODI upgraded an existing preliminary evaluation into possible ruptures of ARC air bag inflators to an engineering analysis (NHTSA ODI InvestigationNo. EA16-003, August 4, 2016). ODI noted that as many as eight million of these inflators, which were manufactured in China, were sold for use in vehicles produced by Chrysler, GM, Kia, and Hyundai for sale or lease in the United States. Because ODI did not know if any of the inflators manufactured in China during the relevant time period were used in vehicles produced for sale or lease in the United States, it planned to focus its investigation on (1) determining the entire U.S. population of ARC manufactured driver air bag inflators, single- and dual-stage; (2) identifying affected vehicle manufacturers; and (3) discovering whether any single-stage driver air bag inflators manufactured at ARC's facility in China were used in vehicles produced for sale or lease in the United States. Additionally, ODI intended to conduct a program to recover the subject ARC inflators from vehicles in the field for further testing and evaluation.

However, ODI stated in its letter that ARC’s response to the agency’s Information Request has been insufficient and disappointing. The company was not able to meet the initial due date for submission of certain information and proposed a revised schedule, which NHTSA accepted. ARC then began a pattern of contacting the agency shortly before a deadline to announce that it was unable to supply all of the data that was due; requesting an extension of time to provide the information; and submitting the information later than promised. According to ODI, ARC’s failure to comply with the explicit directives of the Information Request regarding extensions and partial submissions and its refusal to provide full and complete responses to the agency’s inquiries has hindered the investigation. Additionally, ODI remarked that the company’s attitude towards the investigation has been troubling, citing more than one occasion when the company "questioned the necessity of providing certain information, failed to provide documents in a readable format, appeared nonchalant in its approach to developing a testing plan or protocol, and…advocated for the closure of the investigation without possessing or providing a full understanding of the root cause for at least one of the underlying inflator ruptures."

ODI also complained that ARC neglected to notify the agency of a number of incidents, ranging from testing failures to recalls, that raised serious questions regarding the quality and integrity of the company’s air bag inflators, and that the agency learned of the issues from vehicle manufacturers and other suppliers. Moreover, the company failed to comply with Standing General Order 2015-02A, issued in the Preliminary Evaluation underlying the current investigation, which requires ARC to file a report within five days of receiving notification of an inflator field rupture.

Motivated by ARC’s behavior in the investigation thus far, ODI enumerated a list of expectations for the company’s future participation and approach, including: notification to NHTSA within twenty-four hours of a potential inflator rupture, and submission of a report within five days; compliance with all provisions of Standing General Order 2015-02A; compliance with all instructions set forth in Information Requests, subpoenas, and other agency requests; compliance with all data submission deadlines or extension requests that follow the established protocol; compliance with all data submission format requirements; and expedited completion of the testing program as previously agreed upon by the agency, General Motors, FCA, Kia, Key Safety Systems, and Delphi, including but in no way limited to submission of amended test protocol.

Finally, ODI indicated that it has not waived its right or obligation to demand civil penalties for the violations outlined in its letter, or any other violations that have occurred to date regarding ARC’s actions, and that a determination as to the imposition of civil penalties shall be made at the conclusion of the investigation. Moreover, if ARC fails to appropriately work with ODI and other relevant entities in the underlying investigation, the agency will also pursue all available enforcement options, including but not limited to the immediate notice of administrative depositions and scheduling of a public hearing to obtain the requisite information to pursue the investigation.

Companies: ARC Automotive Inc.

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