PhotoAirbag manufacturer Takata has been hit with a $200 million fine, the largest civil penalty in the history of the National Highway Traffic Safety Administration.

Takata was also ordered to accelerate recalls of defective airbag inflators and ordered to phase out the use of ammonium nitrate propellant, the chemical thought to be the cause of explosive airbat ruptures that have killed at least seven people in the United States and injured nearly 100 more.

“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.”

The consent order issued to Takata 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.

Aware of the defect

As part of the consent order, Takata has admitted that it was aware of a defect but failed to issue a timely recall, a violation of the Motor Vehicle Safety Act.

NHTSA also issued findings that Takata provided NHTSA with selective, incomplete or inaccurate data dating back to at least 2009, and continuing through the agency’s current investigation, and that Takata also provided its customers with selective, incomplete or inaccurate data.

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

The order also imposes what NHTSA called "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.

“Today, we are holding Takata responsible for its failures, and we are taking strong action to protect the traveling public,” said NHTSA Administrator Mark Rosekind. “We are accelerating Takata recalls to get safe air bags into American vehicles more quickly, ensuring that consumers at the greatest risk are protected, and addressing the long-term risk of Takata’s use of a suspect propellant.”

"Pivot point"

In a prepared statement, Takata CEO Shigehisa Takada said he "deeply regret[s] the circumstances that led to this Consent Order."

"This settlement is an important step forward for Takata that will enable us to focus on rebuilding the trust of automakers, regulators and the driving public," Takada said. "We will comply with all aspects of the settlement and are committed to being part of the solution.”  

Prioritize recalls

In addition, Takata and the 12 vehicle manufacturers involved in the existing Takata recalls are ordered 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. 

NHTSA is using for the first time legal authority which was established in the 2000 TREAD Act to allow the agency to accelerate safety defect repairs if manufacturers’ remedy plans are likely to put Americans at risk.

NHTSA announced in June that it was considering use of that authority, and has since gathered information and comment from vehicle manufacturers, parts suppliers and the public as part of a proceeding to determine whether and how to best address recalls involving more than 23 million inflators, 19 million vehicles and 12 automakers.

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