Today’s New York Times contains an article saying that two former North American employees of Takata have come forward to say the company knew about airbag defects as early as 2004.  The company reportedly conducted secret tests at night and on weekends, but ended them and covered up the results when they showed the metal container holding airbag propellant had a tendency to crack, potentially spewing shrapnel into the body of the car’s driver if the airbag deployed.

The article seems to confirm that Takata is another name to add to the long list of Japanese operational or financial coverups–from milk companies, to refrigerators, to solar panels to Olympus’s enormous losses in failed financial markets speculation, to Tokyo Electric Power and Fukushima Daiichi, to the “hot potato” practice of tobashi in the 1990s (see my post on Repo 105 and tobashi).

I want to draw a distinction between Takata and GM.  Maybe it’s right, maybe not.  Anyway,…

…what I’ve read about the GM ignition switch problems makes me think of the GM culture of the time as one that might be called shared conspiracy.  That is, everyone in middle and upper management knew the company was dysfunctional.  So they defended themselves from potential personal liability by taking care to leave nothing in writing and by employing an army of lawyers to advise them on how to dance around the potholes.  While outsiders may not have known details, the company had an aura that told people something was wrong and to stay away.

For Takata, on the other hand, my sense is that the officials who orchestrated the airbag coverup thought they were simply fulfilling an ethical obligation to their CEO, sort of the way a samurai would have protected his daimyo centuries ago.

You might say that this is a distinction without a difference, it involves only the motivations of the coveruppers, not the bad consequences of their actions.  My point would be that the latter behavior is much harder to detect–and is a reason to think twice before owning a Japanese industrial or financial.