Record $200m fine for Takata over airbags

Brittany A. Roston - Nov 3, 2015, 2:48pm CST
Record $200m fine for Takata over airbags

The National Highway Traffic Safety Administration has announced its largest ever civil penalty, which has been lobbed against Takata, maker of the faulty airbags that have resulted in millions of recalls and several deaths. The penalty is for alleged Motor Vehicle Safety Act violations. In addition, and in line with what we’ve previously heard, the NHTSA has decided to take the unprecedented step of using its own authority to accelerate the recall repair rate.

It was previously reported that the NHTSA was in talks about taking over the recalls itself, serving as a sort of centralized authority directing the otherwise incredibly chaotic and scattered airbag recalls. It is imperative the faulty airbags be replaced as promptly as possible, as they are potentially deadly when deployed. The entire process has been moving very slowly, however, and many drivers are still at risk.

A Coordinated Remedy Order has been issued to the dozen affected auto makers, as well as Takata, requiring them to give priority to high-risk vehicles, as well as schedule when parts will be available to repair the recalled vehicles. The NHTSA will be overseeing the supply of repair parts, and will also manage any future recalls that take place alongside “the assistance of an independent third-party monitor.”

Says the NHTSA, the Coordinated Remedy Order represents its first use of the legal authority granted to it by the 2000 TREAD Act. So far, more than 19 million vehicles and 23 million inflators are affected.

In addition to this coordination effect, the NHTSA has slapped Takata with record and unprecedented penalties. Said Transportation Secretary Anthony Foxx:

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. 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.

Takata will pay a $200 million fine, of which $70 million will come in the form of cash. If the airbag manufacturer fails in its commitments or more violations surface, it will be penalized an additional $130 million.

In addition, Takata will be subjected to unprecedented oversight over the next half-decade. As part of that, Takata will have to deal with an independent monitor of the NHTSA’s choosing that will ensure Takata complies with the required phase-out of inflators made with phase-stabilized ammonium nitrate propellant.


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