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Will Takata Comply With U.S. Demand for Nationwide Recall?

Image: File photo of a billboard advertisement of Takata Corp in Tokyo

A billboard advertisement of Takata Corp is pictured in Tokyo in this September 17, 2014 file photo. Toru Hanai / Reuters

Will Takata Corp. comply with a U.S. demand for a nationwide recall of autos equipped with defective driver’s side air bags or won’t it? That’s the question as the Japanese company faces a Tuesday deadline from the nation’s safety watchdog to extend the recall to cover the entire U.S., rather than just regions where it’s very humid.

The air bags in question can expand with too much force, propelling fragments into passengers. The defect has been linked to five deaths. Takata so far has limited the recall to regions of high humidity, saying that its research has shown that’s where the air bag’s inflators are most likely to misfire.

Last month, the nation’s auto safety watchdog, the National Highway Traffic Safety Administration, demanded that Takata, which makes a fifth of the world’s air bags, extend the recall nationwide by midnight Tuesday or else face fines and legal action.

In the meantime, Takata said in a statement that it is creating an independent “Quality Assurance Panel” headed by a former U.S. transportation secretary to examine the company’s air bag manufacturing procedures. It was unclear from the statement by Takata chairman and CEO Shigehisa Takada whether Takata would comply with NHTSA’s demand.

“We recognize that NHTSA has urged Takata and our customers to support expansions of the current regional campaigns in the United States.”

“We recognize that NHTSA has urged Takata and our customers to support expansions of the current regional campaigns in the United States,” the statement said, adding that it remains committed to cooperation with NHTSA and that it will “take all actions needed to advance the goal of safety” for drivers.

In their own statement on Tuesday evening, NHTSA said they had "received Takata's disappointing response to our demand for a national recall of certain driver’s side airbags. Takata shares responsibility for keeping drivers safe and we believe anything short of a national recall does not live up to that responsibility. We will review Takata's response in full to determine next steps."

House hearing Wednesday

However, in testimony prepared for delivery Wednesday at a U.S. House subcommittee hearing, Takata quality chief Hiroshi Shimizu indicates that the company didn't intend to expand the recall by the deadline.

"Takata continues to believe that the public safety is best served if the identified areas of high absolute humidity remain the priority for the replacement of suspect inflators," according to a copy of the testimony on the House website. "If an expanded recall or field action were determined to be justified in light of continuing testing and analysis, any such expanded action should be conducted in a phased manner to ensure that the supply of replacement units continues to be directed first where they are needed most — to vehicles in the areas of high absolute humidity."

The subcommittee hearing will grill NHTSA and Takata officials over the recall, which covers about 8 million vehicles from 10 manufacturers in the U.S., and 14 million worldwide.

Report: Takata Hid Dangerous Air Bag Defect in 2004 2:26

The quality panel announced Tuesday will be chaired by former U.S. Transportation Secretary and White House Chief of Staff Samuel K. Skinner. It will audit Takata’s air bag inflator manufacturing practices and make recommendations for best practices. The report will be made public. The statement Tuesday also said that Takata has appointed two other former U.S. transportation secretaries, Rodney Slater and Norman Mineta, as special counsels to advise the company during the crisis.

Separately, several major customers of Takata have stepped into the debate. Honda called for “coordinated, industry-wide third-party testing” of Takata airbag inflators to see which actually need to be replaced.

“We believe that the industry can achieve greater results by sharing information and putting its collective efforts behind the same objective third party testing program,” said Rick Schostek, executive vice president of Honda North America, Inc. “Honda continues to quickly address the needs and concerns of our customers, and this industry-wide initiative will bring additional energy and focus to this effort.”

The big concern has been whether Takata would be able to manage a nationwide recall that could expand the number of vehicles covered to an estimated 20 million or more. “At this point, a national recall of all Takata air bags would divert replacement air bags from areas where they are clearly needed, putting lives at risk,” NHTSA Deputy Administrator David Friedman wrote in an advance statement to the House subcommittee.

Takata earlier this year said it was boosting production of replacement airbag inflators by 50 percent, to 450,000 a month. It has been under pressure to add even more production lines, a challenge that will become even more apparent if it agrees to any expansion of the October airbag recall.

"The gamble for (Takata) is a national recall means they're going to replace at least 10 million additional driver's side airbags," said Clarence Ditlow, executive director of the Center for Auto Safety. "And that's going to cost them a lot of money and the company itself may not be able to afford the cost and have to go bankrupt."

— NBC News' Tom Costello and NBC contributor Paul A. Eisenstein contributed to this report.