Total Recall

March/April 2019

By Kent Kiser

Automotive recalls are nothing new, but the recall of defective Takata air bags—now inits 11th year—has earned the distinction of being the largest automotive recall in history. This monumental problem poses significant challenges for auto dismantlers and recyclers, who must decide what to do with the recalled air bags in the end-of-life vehicles they receive.

How big is the problem? According to the National Highway Transportation Safety Administration, “roughly 37 million vehicles equipped with 50 million defective Takata air bags are under recall.” The problem touches virtually every automaker and covers well over 75 vehicle models manufactured as early as 2001 and extending through 2016. Additional Takata air bags are scheduled to be recalled through the end of this year, increasing the total number to 65 million to 70 million, NHTSA says. In January, for instance, Toyota announced it is issuing a recall for the Takata air bags in another 1.7 million Toyota and Lexus vehicles worldwide, of which 1.3 million are in the United States.

Takata air bags are under recall, NHTSA explains, because they “can explode when deployed, causing serious injury or even death.” The source of the problem is the chemical Takata used as the propellant in the inflator of its air bag modules. The company reportedly developed a less expensive air bag by using the less-stable compound ammonium nitrate as the propellant, and the design of its inflator assembly left the compound exposed to heat and humidity. “Long-term exposure to high heat and humidity can cause these air bags to explode when deployed,” NHTSA says. Such explosions turn the metallic air bag inflator into shrapnel that can hit vehicle occupants. Defective Takata air bags have killed 15 people and injured at least 250 in the United States, it says.

Such deadly threats and the vast volume of defective Takata air bags in circulation have made it imperative to remove them and render them harmless from both operating and end-of-life vehicles. In the latter case, auto dismantlers and recyclers are the first—and principal—line of defense, but they face operational, commercial, technological, and regulatory challenges when addressing this thorny issue. Mitigating some of those issues is a bounty program that offers some financial incentive for their efforts.

To Remove, or Not to Remove

Often the first link in the vehicle recycling chain, full-service and self-service auto dismantlers must decide what to do with air bags in general—and recalled Takata air bags in particular—in the retired vehicles they purchase. Many auto dismantlers sell unrecalled air bag modules just as they sell other automotive parts; other operators choose not to sell air bags to retail customers.

Metro Auto Recyclers, a full-service auto recycler with operations in Indianapolis and Valparaiso, Ind., decided in the past year to no longer sell air bags to retail customers “simply for the potential liability issues,” says John Leegwater, operations manager. Their concerns include incurring liability for an air bag that fails to function properly in a crash or for accidentally selling a recalled air bag, which is against the law. The Transportation Recall Enhancement, Accountability and Documentation Act of 2000, known as the TREAD Act, prohibits the resale of any used, recalled automotive parts that have not been remedied. Metro also had concerns about “the issue of storing air bags that are pulled out of vehicles,” particularly if the removed air bags could be deemed hazardous waste, he says. (For more on that concern, see “Relieving Some Regulatory Concerns,” page 124.) Self-service auto dismantler Pull-A-Part (Atlanta), in contrast, continues to allow retail customers to remove and buy unrecalled air bags from vehicles in its yards, but only after the company goes through “an extensive process to make sure we do not sell any that have been recalled,” says Steve Levetan, executive vice president.

Dismantlers’ approaches are equally varied regarding recalled Takata air bags. Some leave them in their inventoried vehicles, which eventually they sell to shredders. Until recently, the federal regulatory status of air bag modules in vehicles being recycled had been somewhat unclear. But in a July 19, 2018, memorandum, the U.S. Environmental Protection Agency notes that “the definition of scrap metal at 40 CFR 261.1(c)(6) explicitly includes ‘scrap automobiles,’ which encompasses all component parts, including installed airbags [sic]. Therefore, installed airbag modules would not be subject to a separate hazardous waste determination unless and until they are removed from the vehicle.” In other words, air bag modules that remain installed in vehicles during recycling are “exempt scrap metal,” as are the vehicles themselves.

 If self-service operations leave recalled air bags in vehicles, they might mark, disable, or destroy the air bag modules to prevent customers in their yards from removing and purchasing them. “We destroy them so it’s useless for customers to pick them,” says an executive of a company that operates multiple dismantling yards. Dismantlers that choose to remove recalled Takata air bags from ELVs do so, in part, to make sure the parts are removed from commerce and, in part, to receive the bounty that some automakers have funded to encourage their removal.

The Buyback Incentive

Rebuilders Automotive Supply, an automotive core supplier with operations in Coventry, R.I., and Tampa, Fla., established the Takata air bag bounty program in 2015. The company is the exclusive buyback partner for driver- and passenger-side recalled Takata air bag modules for 10 automakers, covering 22 automotive brands and 144 vehicle models spanning 15 model years, from 2001 to 2016, says Paul D’Adamo, yard recall manager for RAS. Fiat Chrysler Automobiles, Volkswagen Group, and BMW Group are the only major automakers not participating in the bounty program, the firm says.

RAS encourages auto dismantlers to participate in the program by first stressing the safety angle. By taking defective Takata air bags out of circulation, they can prevent additional injuries while mitigating their potential liability and financial losses from accidentally selling a recalled module. RAS then appeals to recyclers’ commercial interests by noting that the bounty program allows them to recover at least some value from the recalled units.

For full-service operators like Metro Auto Recyclers, it was an easy decision to pull the Takata air bags that qualify for the bounty program. “It isn’t a time-sensitive matter, so I give a list of our cars that contain the air bags to our employee who pulls parts in the yard, and he removes them as he has time,” Leegwater says. “It’s filler work that’s paying me.” For self-service auto recyclers like Pull-A-Part, the decision of whether to remove the Takata air bag modules was tougher because “it’s outside our business model to remove parts,” Levetan says. “For us, it means extra handling and extra costs. Is it something we want to be doing? No. But it’s something that we are doing—absolutely—because it is the right thing for us to do.”

The Identification Challenge

To return recalled air bags and receive the bounty, dismantlers must check the vehicle identification number of each incoming and inventoried vehicle against the RAS bounty program VIN database. This identification step brings up a sore point for dismantlers, one that predates the Takata crisis and applies to recalled parts in general. Automakers and other original equipment manufacturers have never provided a comprehensive, electronically searchable database that can easily identify vehicles that contain recalled parts, these dismantlers say, which has frustrated their efforts to comply with recalls. They have “in many cases actively refused to provide this [information]” when dismantlers have asked for it, says Sandy Blalock, executive director of the Automotive Recyclers Association (Manassas, Va.). “Auto recyclers need to be able to identify recalls not only at the point of [vehicle] intake but also at the point of [part] sale in case a recall happens after we purchase the vehicle,” she says. The need for such a database became more pressing due to the Takata recall and passage of the TREAD Act.

Although NHTSA operates a website on automotive recalls at safercar.gov, the agency designed it for the public, allowing vehicle owners to enter a vehicle identification number to determine if that vehicle is subject to any recalls. Various features on the site make it “a clunky process at best, and it was completely unworkable on a commercial level,” Levetan says.

So auto dismantlers turned to Congress, asking it to require automakers to make data on recalled parts available in an electronic format that’s batch-searchable by VIN. What ultimately passed in December 2015—the Fixing America’s Surface Transportation (FAST) Act—was “very watered down,” Levetan says. “Congress thought it was providing a solution, but the legislative language did not do that. So we still didn’t have a commercially viable method through NHTSA of determining which vehicles contain recalled Takata air bags.”

Fortunately for the dismantlers, other resources have emerged to help them identify vehicles with defective Takata air bags. One resource is simply a list from NHTSA that notes the makes, models, and years of vehicles that contain the defective air bags. When dismantlers buy a vehicle, they can consult the list and take measures to ensure they don’t sell the air bag module from any vehicle on it. One drawback, however, is that dismantlers must manually update the list to keep it current as additional vehicles are added to the recall.

RAS’ VIN database—available through the “Recalls” link on its coresupply.com website and the “Search Recalls” link on its rascorepro.com website—is one of the most technologically advanced resources for identifying vehicles with defective Takata air bags, auto recyclers say. RAS also offers the RAS CorePro Mobile smartphone app that dismantlers can use to scan the bar code on a vehicle’s VIN plate and “know right then if the car contains a defective Takata air bag covered by our program,” D’Adamo says. If the result is positive, the recycler “can mark the car and set it aside, then use the rest of the app to recover the air bag,” he explains. “It eliminates some of the paperwork associated with the desktop version.” The company designed the app for high-volume self-service dismantling, scrap, and shredding facilities, but D’Adamo says most recyclers will benefit from its streamlined approach. The CorePro app “shell” sells for $1.99 through Google Play or the Apple App Store, but D’Adamo says he has to activate it by talking with the app buyers to make sure they work for a legitimate auto dismantler or recycler. “We don’t want people randomly downloading our app,” he says. “I have to activate the recycler’s credentials and provide training.”

Some auto dismantling inventory management programs also now include features that help dismantlers identify vehicles with the recalled air bags. Metro Auto Recyclers uses an inventory system called Inventory Buddy that links directly with RAS. When you enter a vehicle’s VIN, the program notes if it contains core parts RAS wants to purchase—and a pop-up window indicates if the vehicle contains any Takata air bags and whether the air bags are part of the bounty program. “So we know right away if the bounty potential is there,” Leegwater says.

How many recalled Takata air bags a dismantling yard will encounter depends on how many vehicles it purchases and the vehicles’ makes, models, and years, among other factors. For Metro Auto Recyclers, it’s a “very small percentage,” Leegwater says, because the company focuses on late-model vehicles that contain fewer Takata air bags. It’s a different story for Pull-A-Part and other auto recyclers that buy older-model vehicles. “As the recall population is significant, it’s significant to us,” Levetan says. “You look at the number of recalled Takata air bags, and it’s got to have an impact, particularly on the older vehicles we buy.” Identifying all the recalled air bags is “a multistep process for us,” he notes, to check vehicle makes the RAS program covers and the ones it doesn’t. “I can’t risk missing any.”

Relieving Some Regulatory Concerns

Until late last year, federal regulations classified recalled Takata air bags that were removed from a vehicle as spent material and, therefore, hazardous waste under the Resource Conservation and Recovery Act. This raised concerns that removal of such air bags, storing them on site, and shipping them for the bounty would make the dismantler or recycler a hazardous waste generator.

On Nov. 30, 2018, the EPA issued an interim final rule, “Safe Management of Recalled Airbags,” that addresses this concern on the federal level by providing a new conditional exclusion that applies to companies that remove defective Takata air bags from vehicles and ship them to facilities for safe deployment. “While covered by the exclusion, those removing and shipping off-site recalled defective Takata airbags are not generators of hazardous waste,” ReMA wrote in a Feb. 4 EHS Update summary of the interim final rule. “These airbags are not regulated as hazardous waste until they arrive at the immediate downstream facility.” To qualify for the exclusion, a facility must meet several conditions. Most notably, it cannot accumulate more than 250 air bag modules or air bag inflators on site or hold them for more than 180 days. Other conditions address packing material, labeling, and recordkeeping requirements and the types of facilities to which you can ship them. (For the EHS Update summary and a link to the EPA interim final rule, go to www.isri.org and search for “airbags.”)

In Levetan’s view, the rule relieved a lot of potential problems for auto recyclers. “EPA recognized it’s in everyone’s best interest not to treat these air bags as hazardous waste when we remove them as part of a buyback program,” he says. “As a result, we think it will help foster programs like the RAS bounty program.” David Wagger, chief scientist and director of environmental management for ISRI, agrees. “To the extent that dismantlers are encouraged to remove the recalled air bags for the bounty, yes, this rule does help them out in that way.” For the executive from the auto dismantling yards, the rule “brought us closer to where we want to be. There’s some additional language we’d love to get into the rule, but EPA has been very, very positive to work with on this.” Levetan notes that the limitation on the number of stored air bags “can be a problem for some facilities.”

In its comments on the interim final rule, RAS expresses concerns that the rule’s labeling, recordkeeping, and other conditions will discourage dismantlers and recyclers from participating in the buyback program. It asserts, and asks the EPA to confirm, that an earlier memo, from July 2018, “remains fully in effect as a distinct track for compliance” with regulatory requirements. D’Adamo explains that RAS’ interpretation of the July 2018 memo is that because of “the unique nature of the RAS program,” it allows dismantlers and recyclers to ship air bags to RAS without having to meet the conditions listed in the interim final rule.

Recovery and Shipping

After verifying a vehicle contains a defective Takata air bag the buyback program covers, the auto dismantler can proceed with the removal process. The difficulty involved and time required varies based on the car model and whether the covered air bag is on the driver side or front passenger side, with the latter typically more difficult to remove. “They’re actually fairly simple to remove if you know what you’re doing,” says ARA’s Blalock, who previously managed her family’s full-service auto dismantling operation. D’Adamo, who also has auto dismantling experience, says he has pulled the driver-side air bag from some vehicle models in less than one minute using a basic impact gun and a T30 Torx bit. In Leegwater’s experience, a driver-side air bag can take 10 to 15 minutes to remove, while a passenger unit can take longer “because some of them are buried in the dash.” He concedes, though, that “some are easier than others.”

RAS and others interviewed for this article caution dismantlers and recyclers to ensure the battery is not connected when they attempt to remove a vehicle’s air bags. That said, none of them report experiencing safety incidents removing either salable or recalled air bags. RAS has “recovered over 300,000 air bags, and we have not had a single incident of one going off in the removal, storage, or shipment phases,” D’Adamo says. In Leegwater’s 20-plus years with Metro Auto Recyclers, the firm has “never had an air bag deploy on the property,” he says, either during removal or when crushing a car hulk. Likewise, at ARA, Blalock says, “We have no knowledge that there has been an injury in a recycling facility to anybody removing an air bag.”

To ease the aforementioned regulatory requirements, automakers participating in the RAS bounty program cover the cost of sending “hazmat kits” to participating auto recyclers, with each kit consisting of a pink antistatic bag, a cable tie to cinch the bag, a certified hazmat box for each air bag module, and a hazmat label to adhere to the box. Dismantlers regularly stack up to 75 boxes on a standard pallet and call RAS to arrange for transportation—at no cost—with one of its certified freight carriers. “We cover all the logistics—[we] create the bill of lading, arrange and pay for the shipping,” D’Adamo says. “Recyclers [bear] no cost in getting the defective air bags to RAS.”

Levetan offers a word of caution: Any employee who handles and packages defective air bags for transport must meet U.S. DOT training requirements for transporting hazardous materials under 40 CFR 171 and 171.1(b) in particular, which outlines pre-transportation functions. If untrained employees package and ship recalled Takata air bags, the employer could face violations and fines.

When RAS receives shipments of recalled Takata air bags at its Coventry, R.I., facility, its final verification process includes checking the serial number of each air bag, categorizing the air bags by make, then shipping them to a company that destroys them and recycles any remaining metals, D’Adamo says. The vendor returns a certificate of destruction that RAS forwards to the participating automakers. After completing the final verification process, RAS determines how much it owes the auto recycler based on current bounty prices of $55 for a driver-side air bag and $60 for a passenger-side module. Some automakers offer a premium of an additional $90 to $100 per module for certain Takata models that are considered “very, very dangerous” or that are particularly difficult to remove, D’Adamo says.

Blalock says she “has not heard any negativity about the RAS program whatsoever” from ARA members. “It seems to be a good program, and it has been well-received.” Especially given that recalled Takata air bags can’t be resold due to the TREAD Act, auto recyclers seem happy to receive some financial return through the bounty. “Being able to utilize the RAS program is far superior to losing all of the revenue that we could receive,” Levetan says. “We think the RAS program is a good way to go and commend the automakers that are using that process. This program could be a model for recalls in the future.” The executive from the auto dismantling yards concurs: “RAS saw an opportunity, and its program has gone famously. Going forward, this program resets the bar for recalled auto parts.”

Resistance and Optimism

Though the RAS bounty program and the EPA’s interim final rule give auto dismantlers two good reasons to remove defective Takata air bags, many operators still choose not to do so. D’Adamo suspects some auto recyclers “aren’t used to following a system and handling paperwork,” while others say they’re already too busy to take on another task. In his view, the main reasons are “ignorance and indifference—don’t know, don’t care, or some combination thereof. So a lot of what I do is promoting awareness, and I won’t be happy until we have a higher penetration with the yards. Our goal is 100-percent participation, and our whole team is passionate about achieving that number,” he says. In 2018 RAS launched an awareness and education campaign across North America that involved articles in industry magazines, e-mail marketing, T-shirt giveaways, YouTube videos, social media outreach, and a speaking tour by D’Adamo, now known as “#YankThatBag.”

For their part, auto dismantlers won’t be happy until there’s a comprehensive, easily searchable electronic database to help them identify all recalled parts in end-of-life vehicles. While they praise the RAS database, they note that it only contains information on vehicles the bounty program covers. “We’ve talked with RAS about growing its program to include information on cars that aren’t part of the bounty program,” says the executive from the auto dismantling yards, and “the idea is still on the table.” D’Adamo says RAS would like to have that information in its database, but the original equipment manufacturers are reluctant to release it. Even so, while a broadened bounty database would help auto recyclers with the recalled Takata air bag issue, “it wouldn’t be the answer to all of our recalled-part problems,” Levetan says.

On the positive side, auto dismantlers say they’re making progress in discussions with automakers about their database needs. The Alliance of Automobile Manufacturers and the Association of Global Automakers, working with Carfax, created a searchable database last year that is “pretty much what we’ve been asking for, but it wasn’t designed for our use,” Levetan says. He and other dismantlers take issue with some of the basic user terms and conditions, the database’s inability to filter data to suit their needs, and its inability to integrate with their yard management software. “We’re working with the parties to resolve those issues,” he says. “Currently we’ve got a square peg and a round hole, but we’re working to trim the corners of the peg.” Though the discussions “aren’t quite there yet,” he’s encouraged by the progress. “I’m an optimist,” he says.

Kent Kiser, former publisher of Scrap and assistant vice president of industry communications for ISRI, is a freelance writer based in Arlington, Va.