Auto blog

Subaru suppliers rely on gray market labor

The Subaru Forester is currently the Japanese brand's bestselling model in the US. A new investigation by Reuters is making some scathing allegations about how the popular model is actually made, though. The piece claims that many of Subaru's suppliers in Ota, Japan, are using low-paid foreign workers and asylum seekers to produce components that go into the CUV. The report says that these laborers are coming from places like China and Bangladesh, and they allegedly receive a pittance compared to their Japanese counterparts. Many said that they get about $6.60 an hour, but employment brokers can take a large portion of that pay. At just four suppliers Reuters estimates there are 580 foreign workers, or about 30 percent of the total workforce. The situation has turned Ota into a cultural melting pot because of the significant population of immigrant labor. The problem stems in part from Japan's tiny labor market, and the country's odd asylum system that doesn't allow some applicants to work legally. These suppliers produce many components for the Forester, including the seats, shocks, and fuel tanks. Reuters admits that the businesses have contracts with other Japanese automakers, as well, but Subaru receives the main focus of this piece, which you can read in full, here. When asked for comment about Reuters' report, Subaru of America provided Autoblog with the following statement: "Fuji Heavy Industries does not condone the exploitation of any class of worker, either in its own operations or within its supply chain. FHI expects all employees to be treated fairly, with dignity and respect and to be provided with appropriate workplace protections. The FHI CSR policy respects and adheres to the law and regulations of business as well as upholding human rights and international standards of behavior and the ethical standards of our stakeholders. Our supply chain network has been made aware of our policy and expectations."

Takata recall of 10 million replacement airbag inflators could get even larger

Takata is recalling 10 million replacement air bag inflators in the United States, the largest ever auto safety recall in history, as U.S. regulators consider whether to expand its scope to include modules that have not yet been the subject of a recall campaign.  Nearly every OEM that sells cars in the U.S. falls under the umbrella of this replacement part recall, including the Detroit Three, Honda, Toyota, Nissan, BMW, Daimler, Subaru and Volkswagen (including Audi).  The 10 million inflator recall made public in early January covers inflators that were a temporary fix. The figure includes some replacement modules that never made it into customer vehicles. Several automakers, including Subaru, have already initiated campaigns to replace the previously recalled inflators with updated parts. Separately, the National Highway Traffic Safety Administration (NHTSA) is assessing whether to compel the recall of tens of millions of additional Takata air bag inflators that have a drying agent. It is also reviewing petitions from General Motors Co to avoid recalling more than 6 million vehicles with Takata inflators. GM has said it could cost $1.2 billion if it had to recall the vehicles. Prior to Wednesday, 41.6 million U.S. vehicles equipped with 56 million defective Takata air bags have been recalled because the inflators can explode when deployed. At least 25 deaths worldwide and more than 290 injuries have been linked to faulty Takata inflators. The Takata recalls cover about 100 million inflators among 19 major automakers worldwide. NHTSA says the cause of the inflator explosions that can emit deadly fragments is propellant breaking down after long-term exposure to high temperature fluctuations and humidity. The vehicle inflators recalled to date do not have a drying agent. Under a 2015 consent order, Takata had to provide data to U.S. regulators by Dec. 31 about whether tens of millions of additional so-called desiccated inflators need to be recalled. Acting NHTSA Administrator James Owens told Reuters the agency was reviewing data on the desiccated inflators and talking to automakers. "We are going to lean in on safety and if we detect a safety problem we will immediately take action," Owens said, adding that the agency could make a decision early in 2020.

Toyota, Mazda drop Takata as Mitsubishi, Subaru weigh options

It's not a very good time to be Takata right now. Fresh on the heels of longtime partner Honda ditching them, Toyota and Mazda have both come out and said they will not use the company's airbag inflators if they continue to rely on ammonium nitrate. Bloomberg reports that Subaru and Mitsubishi are also contemplating a divorce. "The inflator using ammonium nitrate produced by Takata will not be adopted by Toyota," President Akio Toyoda said during a briefing today. "What's most important above anything else is the safety and peace of mind of customers." Mazda echoed that position, simply saying it "will not use Takata airbag inflators which contain ammonium nitrate in our new cars." When you lose three huge OEM accounts in as many days, it's certainly going to have a deleterious effect on your fortunes. In Takata's case, that's meant a staggering 39-percent drop in their share price over the last three days. Yesterday alone, the company saw a 6.2-percent fall, Bloomberg reports. As the business publication reports, though, Takata isn't going down without a fight. The company is "considering some plans to survive," including a fundraising plan that will see it potentially offer up additional shares for sale. Still, at least one analyst doesn't see whatever company survives staying involved in the airbag inflator business. "I really don't see how they're going to be able to survive as an inflator manufacturer," Valient Market Research founder Scott Upham told Bloomberg. "When your major clients publicly come out and say that they're not going to use your products anymore, it makes this very difficult to sustain your business." News Source: Automotive News - sub. req.Image Credit: Carlos Osorio / AP Honda Mazda Mitsubishi Subaru Toyota Safety supplier