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Letter to the Editor

The Airbag Debate Resurfaces

Discussion of the use of non-deployed modules is back on the table

They're baa-aaa-ck.

After several years during which the topic of reuse of non-deployed airbags from salvaged vehicles did not seem to generate a lot of discussion, industry observers are predicting it will again become a key issue in the coming months.

Some indications that they may be right:

• About a dozen states are considering or have recently looked at legislation regarding the use of non-deployed airbags. The legislation varies from outright bans on the use of such bags, to mandatory disclosure laws when they have been installed. Others require that only airbags "certified" for reuse be installed.
• A number of organizations within the industry are gearing up to launch or expand airbag testing and certification programs.
• At the April Collision Industry Conference (CIC) in Charlotte, N.C., not one but two CIC committees focused their time at the meeting for discussion of the issue - after an absence of the topic on the CIC agenda for about two years.

The questions raised by the proposed reuse of non-deployed airbags haven't changed all that much since INSIGHT most recently examined the issue back in 2003. But have the answers to any of those questions changed?

Question: What should these airbags be called?

Not surprisingly, proponents recognize that "used airbags" or "salvaged airbags" aren't terms that are going to fly with legislators or motorists. The CIC Estimating Committee recently identified more than four dozen different terms listed on estimates for "used parts," (i.e, LKG, recycled, etc.) and non-deployed airbags could add even more to that mix. Two years ago, the preferred term seemed to be "non-deployed airbag." Now "NBD airbag" (with the acronym standing for "Never Been Deployed") is the latest terminology being tried.

Question: Are airbags leading to the increasing percentage of vehicles being totaled - and would reuse of non-deployed airbags help reverse this trend?

Everyone agrees that more cars are being totaled. Keith Manich of Entela, the Michigan-based testing lab used by the CAPA program, said two-year-old numbers he has show that 20 percent of all totals are impacted by the high price of new airbag components - prices that would likely drop if there were a lower-cost alternative.

Former insurance executive turned industry consultant Rod Enlow also argues that the cost to auto recyclers to dispose of non-deployed bags they can't sell will end up reflected in higher prices for other recyclable parts - further adding to the growing percentage of vehicles being totaled.

And Herb Lieberman of LKQ Corporation said that as more and more vehicles have more than two airbags, the percentage of vehicles declared total losses because of airbags is going to grow even more.

Others dismiss such arguments (although no one at CIC pointed out that trial lawyers will have a field day if they learn that a key justification for using non-deployed bags is to prevent vehicles from being totaled). Karl Krug of Toyota, for example, said if a car is wrecked to the point of triggering more than a couple of its airbags, the damage is likely to total the vehicle even without the cost of airbags factored in. He said a CIC committee will be looking into the issue of rising total losses this year, and predicts it will find there's a lot more than the cost of airbags involved

Similarly, Brian Rogos of DaimlerChrysler said his company's dealership body shops have also been grousing about the increasing rate of totals.

"We took 1,000 estimates from our dealer body shops and put them through a test, taking the airbag price to zero, which not even a recycler can do, and we only saved 10 vehicles out of 1,000," Rogos said.

He said the lower cash value for used cars is more likely a factor in the increasing percentage of totals.

Perhaps more interesting is the question of whether reuse of non-deployed airbags would really combat rising total loss rates. Craig Griffin of Laney's Collision Centre in El Dorado, Ark., argues that by the time the costs of certification are added to the module, there may not be a big difference in cost between new and used, preventing non-deployed bags from "saving" too many vehicles.

At CIC, Massachusetts shop owner Chuck Sulkala also picked up on the fact that Lieberman said recyclers don't take the value of airbags into effect when purchasing salvage because they often can't sell the bags. If such parts were salable, Sulkala said, wouldn't that just increase salvage values, which also leads to the totaling of more vehicles?

Question: What effect, if any, will the use of non-deployed airbags have on the theft of the bags and the "black market"?

How big a problem airbag theft is varies widely by state and market, but it is an issue that has seemed to capture some lawmakers' interest. Perhaps it's the fact that a recent search on eBay found more 2,500 airbag modules for sale, with opening bids starting at just 99 cents. Proponents of the reuse of non-deployed bags argue that turning the bags into a legitimate commodity rather than a black market product will reduce the profit margin and thus the theft rate. Opponents say it doesn't make sense that a greater demand for the product would lead to decreased theft rates and say it could actually encourage it.

Question: Are insurers willing to take the risk on non-deployed airbags?

Proponents point to the Canadian insurer who has been using non-deployed airbags for a number of years. While that seems to speak well for the use of non-deployed airbags, there are some key differences in that Canadian market. As a government insurer, the company has a near monopoly in its province, and largely controls the salvaged vehicle from the time the vehicle is declared a total until the non-deployed airbag is removed to be used in another vehicle.

U.S. insurers, who don't have the same "luxuries" enjoyed by the British Columbia insurer, have yet to make the non-deployed airbag plunge.

"Having 35 years of insurance background, I can tell you exactly why," Enlow said. "The issue is: product liability. Insurers have to believe, in absence of facts, what the OEMs tell them. Insurers are very risk averse. We call ourselves risk-managers. Actually we're risk-avoiders. But this is a manageable risk."

Question: What about airbag recalls?

Auto manufacturers don't like to talk about it, but some vehicle airbags have been recalled. They argue that if non-deployed airbags are reused, a recalled bag that isn't taken out of the market could end up installed in another vehicle.

Airbag certification proponents say their system has an easy fix for this problem. The certification process includes documenting not only what vehicle the bag came from, but also what vehicle it is put into. In a subsequent recall, the system would allow the owner of the vehicle with the airbag to be notified.

Question: Can a non-deployed airbag be tested adequately to determine its reliability when placed into another vehicle?

This is the million-dollar (make that multi-million dollar) question. Proponents of non-deployed airbags say yes; opponents say no.

Steve Nantau of Ford said his company has concluded that adequate testing isn't available, for example, to detect water damage, which, if acidic, can damage the bag over time but in any case can deposit foreign material in the assembly and cause electrical shorts in the circuitry. Improper handling of the bag can stress the wires in ways that might only show up over time, he said. If the module is dropped, the pellets used for propellant could be damaged affecting deployment. And even minor damage or seemingly cosmetic repairs on the airbag cover can affect deployment, he said.

"Our engineers and technical specialists investigating this determined that there is not a test that can verify the acceptability [of the module]," Nantau said. "The only way to do it is completely disassembling the unit, checking every component and…putting it all back together. The cost to do that would exceed the cost of building a brand new airbag."

Enlow and other proponents disagree.

"Fact: All the laboratory measurements necessary to determine if an [non-deployed] airbag can be comparatively measured against a new OEM service part have been validated," Enlow said. "Fact: The test to validate that the part has remained dry and unsubmerged have been identified, developed and tested. Fact: An accredited laboratory will oversee the training, testing, handling processes and procedures relative to the [non-deployed] airbag process.

"Handling, shipping and storage requirements are detailed [as part of the certification]," Enlow said. "A part must follow a specific sequence of events in order for the database to allow it to move through the process. The data is collected in a secure database that requires specific questions to be asked and answered prior to a sale being made."

It's been almost exactly a decade since the issue of reuse of non-deployed airbags surfaced in the industry. Neither side seems ready to concede defeat. So the overriding question that no one seems to have the answer for is: Where does the debate go from here?

Voices in the Airbag Debate

"For between 15 and 20 years, the OEM community actively fought the use and installation of airbags in motor vehicles. It's been well-documented…. With all due respect to my colleagues in the OE market, it's a little difficult to take your word for it now on the safety issue.…"

- Karen Fierst, industry consultant

"Vehicle manufacturers make running changes, using different parts for the same vehicle make and model. In the case of Ford Motor Company, we have several vehicles that have multiple airbags for the exact same model year…. Although the airbag may physically fit in the vehicle, an incorrect airbag can be installed resulting in incorrect restraint performance.… A body shop that chooses to use [non-deployed] airbags and subsequently through analysis of the [black box] data finds out that one didn't perform as intended would be liable for probably a lot more than what was saved by using them."

- Steve Nantau, Ford Motor Company

"If there is a problem using the [non-deployed] airbags, why haven't the statistics associated with any type of research been made public? Where are the facts, measurements, validation and reporting that will prove that? There have been no credible reports that support the assertion that they can't be used." -

Rod Enlow, industry consultant

" Those of us in the room lose the opportunity of repairing [totaled vehicles], and selling parts for them. The OEMs stand the greatest lost opportunity. The alternative parts suppliers supply approximately 28 [percent of] replacement parts. We lose a 28 percent opportunity; the OEMs lose a 72 percent opportunity…. It seems to me we need to establish some sort of cooperation with the OEMs.… If it's only going to be new bags used, then let's make them affordable so that [the OEMs] can still sell the 72 percent of the parts and I can sell the 28 percent of the parts."

- Herb Lieberman, LKQ Corporation   o

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