Daimer recalls 840,000 Mercedes vehicles with deadly Takata airbags
The Daimer AG recall affects Mercedes-Benz cars and SUVs from the 2005-2014 model years, including C-Class, E-Class, SLK and SLS sedans and M-Class, GL-Class and R-Class SUVS outfitted with Takata airbags.
Daimler AG is recalling 840,000 vehicles in the U.S. because they have potentially defective driver's side air bags made by Takata Corp.
The recall affects Mercedes-Benz cars and SUVs from the 2005-2014 model years, including C-Class, E-Class, SLK and SLS sedans and M-Class, GL-Class and R-Class SUVS. It also includes 2007-2014 Sprinter and Freightliner vans.
Daimler says the recall is precautionary and no one has been injured in any of its vehicles. Daimler says the U.S. government alerted it to potential problems.
Takata air bags can inflate with too much force and spew metal fragments. More than 24 million vehicles have been recalled in the U.S. because of the problem, which is blamed for 11 deaths worldwide.
Daimer's full statement on the recall is below:
The US National Highway Traffic Safety Administration (NHTSA) has notified Daimler AG that it has been informed that certain airbag models from the manufacturer Takata, which are also installed in Mercedes-Benz cars and Daimler vans, are potentially defective. On the basis of available information on the components, Daimler AG has decided to recall approximately 705,000 Mercedes-Benz cars and about 136,000 Daimler vans in the United States. The expense for this precautionary recall is estimated at a total of about €340 million.
The estimated costs will be recognized as a provision in financial year 2015. Therefore net profit will decrease to €8.7 billion (2014: €7.3 billion) and Group EBIT to €13.2 billion (2014: €10.8 billion). EBIT from ongoing business remains unchanged at €13.8 billion (2014: €10.1 billion). Daimler AG points out that both the dividend proposal and the employees’ profit participation for the successful year 2015 as well as the earnings expected for financial year 2016 remain unchanged. At the Annual Shareholders’ Meeting on April 6, 2016, the Board of Management and the Supervisory Board will propose the distribution of a dividend of €3.25 per share (2014: €2.45). Daimler AG continues to assume that it will slightly increase Group EBIT from the ongoing business in 2016.
Daimler has booked a $384 million charge to pay for vehicle repairs.