Takata to pay $70 million as fine for airbags’ defects

By Editor   |   06 November 2015   |   6:12 am  

airbagTAKATA has said it would phase out its use of ammonium nitrate propellant in airbag inflators and pay a $70 million cash fine as part of a consent order with U.S. auto safety regulators to resolve violations stemming from the supplier’s airbag defect crisis.

The agreement with the National Highway Traffic Safety Administration (NHTSA) calls for a total civil penalty of more than $200 million, with $130 million in payments becoming due if Takata violates the terms of its consent order or U.S. auto safety laws.

As part of the settlement, announced on Wednesday, Takata admitted that it was aware of a defect but failed to issue a timely recall. The agreement will require Takata to operate under stricter regulatory scrutiny for five years, including an independent safety monitor selected by NHTSA to ensure compliance with the order.

“For years Takata has built and sold defective inflators. It refused to acknowledge they were defective. It provided incomplete, inaccurate, and misleading information to NHTSA, to the companies using its inflators and to the public,” U.S. Transportation Secretary Anthony Foxx said at a press conference.

Foxx also said that Takata must recall all inflators that have used ammonium nitrate unless the company can definitively prove to NHTSA that the chemical is safe for the life of the vehicle — a prospect that Foxx said the government currently doubts.

“We believe this chemical is a factor in these ruptures, and the combination of Takata’s delays and denials, plus unexplained issues with ammonium nitrate inflators not already under recall leave us without confidence in these products going forward,” Foxx said.

“We are ordering Takata to phase out production of new inflators using ammonium nitrate and unless new evidence emerges, the company will have to recall all of its ammonium nitrate inflators.”



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