Case StudyToyota and Nissan Recall 6.5 Million More Vehicles Over Takata AirbagsBy HIROKO TABUCHI and JONATHAN SOBLE - The New York Times, MAY 13, 2015

For months, the problem of defective airbags made by the Japanese supplier Takata has festered in the auto industry as recalls have mounted and automakers have searched for the reason that the airbags can explode violently, sending pieces of metal into the cabin.

On Wednesday, Toyota and Nissan sharply escalated the recalls, adding 6.5 million vehicles worldwide to the 25 million already deemed to contain potentially dangerous components. At least six deaths and more than 100 injuries have been linked to the defect.

Toyota said tests carried out on vehicles with Takata-made airbags, including some recovered from junkyards, had shown that the steel inflaters, the parts that contain the propellant and can burst apart, were sometimes not airtight. In those cases, the propellant can become destabilized, raising the risk of rupture. Among the tests Toyota conducted were CT scans, like those used in hospitals to see inside the human body, to check the components integrity.

Certain types of airbag inflaters were found to have a potential for moisture intrusion over time, the company said in a statement.

Still, Toyota said the relationship between moisture and the risk of rupture was still very much unknown.

Toyota is among an alliance of automakers brought together last year as the airbag recalls mushroomed that has been conducting its own independent tests on the airbags.

One source of concern has been the airbags propellant, ammonium nitrate, a cheap but powerful explosive that engineers say can destabilize if contaminated with moisture. Despite its unstable properties, Takata chose to use ammonium nitrate in its airbag inflaters because of cost concerns, former engineers have said.

Speaking publicly for the first time, Mr. Neff, president of IsoVac Engineering, a defense contractor, said he told Takata at the time that a helium-based method its engineers used to detect leaks was inadequate. Its inflaters could stop being airtight within several years, and some of their prototypes were already leaking, Mr. Neff said he warned.Takata decided not to buy his system of radiation-based testing, sticking to its helium leak-testing method, Mr. Neff said.

My opinion was asked by the Takata management, he said. I gave them my opinion, and they asked me to leave the meeting.

Takata said it had no comment on current or former leak tests on its inflaters. In the past, it has said that any problems with the airbags were a result of manufacturing errors, not design flaws.

Karl Rink, an airbag industry consultant who has worked with Takata, and a former engineer at Autoliv, a Swedish-American airbag manufacturer, said he agreed with Mr. Neff that helium-based testing was inadequate and prone to errors. Mr. Rink said he had long raised concerns at industry and academic conferences that airbag makers were not properly testing their inflaters for leaks.

About five million of the vehicles recalled on Wednesday were Toyotas. Of that total, 637,000 are in the United States and 1.36 million are in Japan. Thirty-five models were affected, the company said, including top sellers like the Corolla. Nissans recall covered 1.56 million vehicles.

Toyota and Nissan said they were not aware of any injuries stemming from faulty airbags in the vehicles recalled on Wednesday, which were manufactured between 2003 and 2007. They described the recalls as investigative and preventive.

Based on the above case study, 1. Who are the stakeholders?

2. What are the stakeholders interests in the Toyota and Nissan?

3.Why do you think both of the companies are recalling their vehicles?

4.If only half the owners responded to the recall, what would the companys obligation be?