Takata to recall 34 million vehicles in U.S. with defective air bags

By David Morgan and Ben Klayman

WASHINGTON/DETROIT (Reuters) - Japanese air bag manufacturer Takata Corp has agreed to declare nearly 34 million vehicles defective due to problems with air bag inflators, creating the largest automotive recall in American history, U.S. safety regulators said on Tuesday.

The recall, which still does not identify the reason why the problem is occurring, involves passenger and driver-side air bags in vehicles made by 11 automakers, the U.S. Department of Transportation and the National Highway Traffic Safety Administration said. It expands on previous regional and national recalls for the same issue.

Transportation Secretary Anthony Foxx said NHTSA also issued a consent order to Takata, requiring the supplier to cooperate in the safety agency's ongoing probe as well as any oversight.

NHTSA also said it will "organise and prioritize the replacement of defective Takata inflators" under its legal authority.

"We will not stop our work until every air bag is replaced," Foxx said.

A recall that size will cost Takata and its automaker customers an estimated $4 billion to $5 billion, said Scott Upham, president of Valient Market Research, which tracks the air bag industry.

A Honda Motor Co Ltd spokesman had no immediate comment on how the replacement air bag inflators will be produced for such a large number of vehicles. Industry officials have turned to Takata's rivals for help in obtaining replacement parts.

"While it's taken far too long, Takata finally seems to be owning up to the air bag crisis that has plagued vehicles of all shapes and sizes," said Kelley Blue Book analyst Akshay Anand. "A recall of this size is unprecedented in any industry."

Takata Chief Executive Shigehisa Takada, whose family founded and controls the supplier, said analysis of the problem "was not within the scope of testing specifications" set by its automaker customers.

U.S. lawmakers, who had pushed for a broader recall, praised the news.

"Folks shouldn't have to drive around wondering if their air bag is going to explode in their face," Florida Democratic Senator Bill Nelson said. "Let's hope Takata's admissions today tell us the whole story."

The number of vehicles with potentially defective Takata air bags recalled globally since 2008 has risen to around 36 million following recalls over the past week by Japan's Toyota Motor Corp , Nissan Motor Co Ltd and Honda.

The automakers have said that they decided to proceed with their recalls after finding some Takata air bag inflators were not sealed properly, allowing moisture to seep into the propellant casing. Moisture damages the propellant and can lead to an inflator exploding with too much force, shooting shrapnel inside the vehicle.

Six deaths have been linked to the defective air bags, all in cars made by Honda, which has borne the brunt of the Takata recalls to date and which gave a disappointing profit forecast last month due to higher costs related to quality fixes.

Takata faces multiple class actions in the United States and Canada as well as a U.S. criminal investigation and a regulatory probe.

News of the recall on Tuesday was initially reported by the Detroit News.

(Additional reporting by Ben Klayman in Detroit and Radhika Rukmangadhan in Bengaluru; Editing by Simon Jennings and Matthew Lewis)