US Regulators Slam Takata, Makers of Exploding Airbags, With Largest Civil Penalty By NHTSA

The Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) imposed a fine of up to $200 million, the largest civil penalty in NHTSA’s history, for Takata’s violations of the Motor Vehicle Safety Act. This is in response to defective airbag inflators in the airbags produced by the Japan-headquartered company. Regulators say Takata failed to disclose the defect in an expeditious manner, putting millions of American travelling public at risk.

In what regulators call a first, NHTSA also exercised its authority to accelerate the recall of millions of affected vehicles for repairs. Regulators also set the deadline for the recall of other Takata inflators that use suspect propellants, unless they are proved to be safe.

Out of the $200 million fine, $70 million is payable in cash, with an additional $130 million set to be charged if Takata fails to meet its commitments, or if additional violations of the Safety Act are discovered.

The Consent Order issued to Takata requires the company to phase out the manufacture and sale of inflators that use phase-stabilized ammonium nitrate propellant. This propellant is believed to be a factor in explosive ruptures that have caused 7 deaths and nearly 100 injuries in the United States.

In addition, the Consent Order also lays out a schedule for recalling all Takata ammonium nitrate inflators now on the roads, unless the company can prove they are safe or can show it has determined why its inflators are prone to rupture.

NHTSA also issued findings that Takata provided NHTSA with selective, incomplete or inaccurate data dating back to at least 2009. Takata also provided its customers with selective, incomplete or inaccurate data, according to NHTSA.

The order also imposes unprecedented oversight on Takata for the next five years, including an independent monitor selected by NHTSA to assess, track and report the company’s compliance with the phase-out schedule and other requirements of the Consent Order.

“For years, Takata has built and sold defective products, refused to acknowledge the defect, and failed to provide full information to NHTSA, its customers, or the public,” said Transportation Secretary Anthony Foxx. “The result of that delay and denial has harmed scores of consumers and caused the largest, most complex safety recall in history. Today’s actions represent aggressive use of NHTSA’s authority to clean up these problems and protect public safety,” he added.