Total Quality Management of Takata

Total Quality Management of Takata
Student’s Name
Institution’s Name
Abstract
Takata Corporation began operations in 1933 and has grown to be a multinational company. Takata is located in Japan, a country of other multinationals like Toyota. A company, the age of Takata, should have known better to engage in total quality management for over the eight decades the company has operated. Like most companies, Takata stood by the sides of quality management until a disaster well-choreographed in 1998 came to pass in 2012; the disaster has since forced the corporation to adopt a culture of total quality management. Takata has had to recall the use of its airbags in millions, and this is the largest recall in the history of automobiles. Dropping share value in the market and court cases that take away millions of shillings from Takata are some of the challenges the company has had to deal with since 2014. In this report, the writer looks at the genesis of all the woes that Takata faces currently, how the woes developed, and the recommended action for Takata.
Keywords:
Takata airbags, total quality management, airbag recall, automobile
Background
Takata Corporation began its operations in 1933 shifting focus over time from making of woven textiles to assembly and manufacture of seatbelts, airbags, child restraint systems and other automobile safety products. Takata’s vision is ensuring that a society free from automobile fatalities exists. Takata has 46 manufacturing plants in 17 countries with a vision of expanding in production and sales (“Mergent Online.

, 2016”). Takata recently had the largest airbag recall in history (Plungis, 2016a). Many vehicle manufacturers had to recall vehicles to rectify the airbag mishap. Takata claims to have used ammonium nitrate that may rupture due to its sensitivity to humidity hence spraying metal chips to vehicle occupants. Rapturing ammonium nitrate used in the manufacture of Takata’s airbag inflators is capable of killing passengers (Gaskill, 2016). Takata Corporation ranks among the likes of Toyota Corporation and other big manufacturers of automobiles; the impact as a result of airbag recall is since the other airbag manufacturers do not produce in the magnitudes of Takata (Gaskill, 2016).
Executive Summary
Takata has over time since 1998 involved in a culture of dishonesty caring only of how much goes into savings if cheap materials were used in airbag manufacture. Takata started using ammonium nitrate to make its airbag inflators in 1988. Airbag inflators made from ammonium nitrate have no ability to contain moisture absorbed, the more they absorb moisture the likely they are to rupture when deployed (Gaskill, 2016). A defective inflator, when engaged, has the potential of spraying passengers with shrapnel that may cause death in some instances since shrapnel can rupture the skin and enter the body. Quality compromising tactics of Takata came to a halt in 2014, and since then the company has been on the run to recover its reputation; share values have dropped by over 90%, fines are coming in often as a result of faulty airbags (Gaskill, 2016). Takata has had to adopt total quality management measures by heading to the courts’ directions and wants of automobile manufacturers who are buyers of Takata airbags.
Introduction
Takata’s woes began in 2012 after Angelina Sujata got involved in an accident causing the steering airbag to inflate (Burris, 2015). Sujata complained of feeling a sharp pain in her chest which she discovered to have been as a result of a hole caused by ruptured inflator as a result of ammonium nitrate. It took the manufacturer of Honda Civic one year to recall the vehicle that had its airbag rapture with Sujata as the occupant (“Takata Airbag Inflator Recall Fact Sheet | Honda Airbag Info., 2016”). It took Takata three years to formally acknowledge that their airbags were defective; in 2015 Takata announced a major airbag recall in the history of automobiles. Takata’s airbag recall affected more than 100 million vehicles worldwide.
The most unfortunate thing about Takata airbags is that airbag manufacturers are not many hence vehicle assemblers rely heavily on Takata’s airbags. Takata’s airbag recalls continued from 2015 over to 2016 financial years. Millions of people have received recall notices warning of the mortal danger posed by airbags in their vehicles. Car owners have to wait for several months before their vehicles receive new airbags from Takata (Plungis, 2016). In the USA, National Highway Traffic and Safety Administration (NHTSA) undertakes to institute a process that would facilitate recall of airbags over the next couple of years from 2016 (Gaskill, 2016). NHTSA decision would see a couple of deaths or injuries to passengers before the defective airbags get recalled. If deaths would not originate from defective airbags, the absence of the airbags would occasion death (Plungis, 2016). NHTSA recommended the use of airbags in 1989 and since then over 2500 lives get saved from automobile accidents annually (Gaskill, 2016).
Takata started compromising on the quality of their airbags back in 1998 when the concern engineers advised that use of ammonium nitrate would cut on the production costs while knowing the instability of such combination when used as an inflator (Gaskill, 2016). Although some engineers showed their discontent in the new inflator materials out rightly, the company resorted to using the cheap option against the engineer’s directions. The dangers of using ammonium nitrate include the lack of ability by ammonium nitrate to absorb moisture thus degrading over the years; in this instance, if the vehicle happens to be involved in an accident the inflators will burst shooting metal shrapnel at the passengers (Gaskill, 2016). Takata never stopped the stooping and compromising on quality as the company decided to manipulate the test results of their inflators such that they could be up to the recommended market quality.
Automobile manufacturers still install Takata airbags in recalled and new vehicles. Takata left automobile manufacturers with no choice but to continue using the airbags and recall their vehicles just in time before the airbags become defective (Gaskill, 2016). The US Senate committee on commerce reached a compromise on the total recall of Takata and allowed continued use of the airbags as long as they could be recalled in time before damage occurs. Takata advised for a recall of vehicles fitted with its airbags, but not all manufacturers informed their vehicle buyers; automobiles are now engaging private detectives to help bring in vehicles that are likely to have reached the maximum allowed limit of using Takata airbags for replacement (Rice, 2016).
Takata has had its fair share of lawsuits that seek damages as a result of harm caused by its airbags. On the 3rd November-May 2015, Takata got fined $70 million that would be followed by $130 if Takata defaulted on the appointment of an independent safety monitor (Rice, 2016). If the $200 fine passed, it could have been the largest civil suit penalty in the USA department of transportation history (Rice, 2016).
Analysis
Following the airbag recall scandal, selling price of Takata’s shares dropped significantly in 2016 and a further fall is anticipated. The share price of Takata has fallen by 90% since the airbag scandal came to the limelight in 2014 as shown in the below graphs (“GALE Business Insights: Global., 2016”).
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The graph on the left shows dwindling share values over the year 2016 while the graph on the right shows the share value in one week that begins on the 25th of November 2016 (“GALE Business Insights: Global., 2016”).
Application of Total quality Management to Takata
Total quality management demands that a corporation of Takata’s magnitude engages in activities through which the expectation and needs of customers and the community are met not compromising on the objectives of the organization. Under total quality management, the potential of all employees must be maximized to ensure there is a drive for improvement on the employees’ part (Belt, 2016). Since the eruption of the airbag scandal, Takata has been on the lookout on how to ensure total quality achievement while ensuring the development of the corporation.
Some of the automobile companies that have partnered with Takata expressed their concern over the quality of the airbags, thus thought it wise to have a third party ensure the safety of Takata’s airbags (Belt, 2016). Honda has shown displeasure on the way Takata handled the production of its airbags previously; Honda has since advocated for engagement of a third party to assess the quality of the airbags produced (“Takata Airbag Inflator Recall Fact Sheet | Honda Airbag Info., 2016”). It is the aim of Takata to incorporate the views of its customers into the new Takata as will be directed by the new investors (Pugliese, 2016).
Takata’s airbag recall left the company with minimal sales as most of the revenue was channeled to the replacement of airbags (Pugliese, 2016). In light of the current situation Takata finds itself in, the corporation has had talks with potential investors to refinance its operations. By June of 2016, Takata had 30 willing investors who have since lost interest in Takata, but there are around seven investors who are willing to invest in Takata.
Initially, before the airbag scandal got discovered, Takata engaged in a culture of dishonesty by manipulating the test results of its airbag inflators (Gaskill, 2016). In the new environment since 2014, Takata has undergone a cultural change process that will see the company engage in prevention and proactive measures rather than detection and fire-fighting. Takata waited for a long time until the happening of a disaster before engaging the total quality management practices.
Methods
The researcher in writing this report relied on secondary data available in the internet and online libraries. The researcher undertook precautions not to use sources that may be up to generating traffic by vetting the sources used in this report. All information borrowed has been cited properly; the authors of the information have been acknowledged.
Conclusion
Takata is a multinational that should have the best interests of its customers at heart; that has not been the standard procedure since the company resorted to using of ammonium nitrate to make its airbag inflators. Operations of Takata began in 1933 with the sole objective of making the automobile industry secure from accidents, but today the accidents are not killing passengers but the airbags on Takata. Takata has overtime involved in a culture of dishonesty caring only of how much will go into savings if cheap materials are used in airbag manufacture. Quality compromising tactics of Takata came to a halt in 2014, and since then the company has been on the run to recover its reputation; share values have dropped by over 90%, fines are coming in often as a result of faulty airbags. Left with no option, Takata has adopted total quality control measure by heeding the court’s directions and wants of automobile manufacturers. Takata should have engaged in a culture of total quality control a long time ago but like many other companies, complete quality control measures are adopted after disaster strikes. Continued confinement within the dictates of total quality control measures will see the recovery of Takata to the global automobile safety equipment giant it has been.

References
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GALE Business Insights: Global. (2016). Bi.galegroup.com.ezproxy.library.berkeley.org. Retrieved 2 December 2016, from http://bi.galegroup.com.ezproxy.library.berkeley.org/global/company/1000818037?u=berkeleycollGaskill, T. (2016). A ticking time bomb. Quality Progress, 49(8), 10-11,13. Retrieved from http://search.proquest.com.ezproxy.library.berkeley.org/docview/1812403399?accountid=38129Mergent Online. (2016). Mergentonline.com.ezproxy.library.berkeley.org. Retrieved 2 December 2016, from http://www.mergentonline.com.ezproxy.library.berkeley.org/companydetail.php?compnumber=120984Plungis, M. (2016). Air-Bag Maker Takata Faulted on Quality-Control Culture. Bloomberg.com. Retrieved 2 December 2016, from https://www.bloomberg.com/news/articles/2016-02-02/takata-faulted-on-quality-control-culture-by-panel-it-appointedPlungis, M. (2016a). Takata: The Longest Recall. Bloomberg.com. Retrieved 2 December 2016, from https://www.bloomberg.com/news/articles/2016-05-12/takata-air-bags-the-longest-recallPugliese, T. (2016). Takata makes progress selecting investor. Just-auto.com. Retrieved 2 December 2016, from http://www.just-auto.com/news/takata-makes-progress-selecting-investor_id171577.aspxRice, M. (2016). Takata Exploding Airbags Lawsuits | Motley Rice. Motleyrice.com. Retrieved 2 December 2016, from http://www.motleyrice.com/personal-injury-wrongful-death/takata-exploding-airbagsTakata Airbag Inflator Recall Fact Sheet | Honda Airbag Info. (2016). Hondaairbaginfo.com. Retrieved 2 December 2016, from http://hondaairbaginfo.com/takata-airbag-inflator-recall-fact-sheet/