Takata to Be Fined $70 Million in Airbag Recall Case

The U.S. government plans to fine the company for the way it handled airbag recalls.

The U.S. government has fined Takata Corp. $70 million for the way it mishandled air bag recalls. This is the largest civil penalty ever issued by the National Highway Traffic Safety Administration, issued for Takata's violations of the Motor Vehicle Safety Act. It also is the first time NHTSA has used its authority to accelerate recall repairs to millions of affected vehicles. One of the agency's orders sets deadlines for future recalls of other Takata inflators that use a suspect propellant unless they are proved to be safe.

"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 Oct. 3. "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."

A consent order issued to Takata imposes a record civil penalty of $200 million, with $70 million payable in cash, and requires the company to phase out the manufacture and sale of inflators that use phase-stabilized ammonium nitrate propellant, which NHSTA said is believed to be a factor in explosive ruptures that have caused seven deaths and nearly 100 injuries in the United States. This order also specifies a schedule for recalling all Takata ammonium nitrate inflators now on the road unless the company can prove they are safe or can show it has determined why its inflators are prone to rupture.

The remaining $130 million will become due if the company doesn't comply with the terms agreed to during the five-year deal.

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