Takata Must Pay $70M Fine For Failing To Report Deadly Exploding Airbag Defect, Repairs To Be Made By 2019

UPDATE: The National Highway Traffic Safety Administration on Tuesday ordered Japanese parts maker Takata to pay $70 million – and an additional $130 million if it fails to abide by the agreement – marking the agency’s largest civil penalty in history. The regulator also announced it would use its authority to accelerate recall repairs to millions of vehicles equipped with shrapnel-shooting airbags for the first time. 

“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,” Transportation Secretary Anthony Foxx said in a statement.

Along with the fine, NHTSA’s consent order [PDF] requires Takata to phase out the manufacture and sale of inflators that use phase-stabilized ammonium nitrate propellant – thought to be a factor in explosive ruptures that have caused 7 deaths and nearly 100 injuries in the United States.

Under the consent order Takata admits that it was aware of a defect but fail dot issue a timely recall.

Of that $200 million fine, $70 million is payable in cash over several years. An additional $130 million would become due if Takata fails to meet its commitments or if additional violations of the Safety Act are discovered, NHTSA said.

In a separate but related action, NHTSA also issued a Coordinated Remedy Order [PDF] to Takata and 12 vehicle manufacturers who used the company’s airbags.

The order directs them to prioritize their remedy programs based on risk, and establishes a schedule by which they must have sufficient parts on hand to remedy the defect for all affected vehicles.

Vehicle manufacturers must ensure they have sufficient replacements on hand to meet consumer demand for the highest-risk inflators by June 2016, and to provide final remedies for all vehicles – including those that will receive interim remedies because of supply and design issues – by the end of 2019.


After more than a year of back and forth between regulators and Japanese parts manufacturer Takata over the slow response and notification related to shrapnel-shooting airbags, the two entities have reportedly reached a settlement in which the parts company will pay a $70 million fine for its failing related to the deadly defect.

The Wall Street Journal, citing people familiar with the matter, reports that the National Highway Traffic Safety Administration is poised to impose a $70 million fine against the parts maker for its lapse in dealing with the defective airbags linked to eight deaths and hundreds of injuries.

The fine is said to be part of a settlement between NHTSA and Takata related to the Japanese company’s failure to notify regulators of the defect in a timely manner.

Additionally, the settlement will reportedly assign an independent monitor to audit the company’s safety practices for several years.

The company will face an additional $130 million penalty if it violates the settlements terms or other federal laws, the WSJ reports.

News of the settlement comes just two weeks after NHTSA held a special meeting on how to best handle the safety defect.

Recalls of vehicles with Takata-produced airbags began slowly in 2008, but gained traction over the last year, culminating in the recall of 33.8 million vehicles in May.

The company and a plethora of investigators from the National Highway Traffic Safety Administration, as well as the 10 automakers affected by the recall have yet to identify what causes Takata’s airbags to rupture so violently. Because of this, it’s unclear whether or not vehicles already repaired are actually safe.

In fact, company also plans to re-recall about 400,000 vehicles that have already been repaired.

Takata announced it would change its use of the often volatile chemical ammonium nitrate in its safety devices and replace its batwing driver inflators.

Federal Regulators Set to Hit Takata With $70 Million Fine [The Wall Street Journal]

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