Takata Corp. was hit last month with $200 million in civil penalties – the largest ever imposed by the National Highway Traffic Safety Administration (NHTSA) – and hopefully this will get the attention of the automobile industry. The company will pay $70 million as a part of a settlement over the defect in the Japanese auto parts maker’s air bag inflator. Takata’s settlement with NHTSA includes $130 million in penalties that could be enforced if Takata doesn’t comply with the terms of its agreement with the agency. NHTSA also announced that it will take the unprecedented step of speeding up the recall of some 19 million vehicles in the U.S. with the defective inflators.
Takata, as part of the settlement, has admitted that it failed to alert NHTSA of the defect despite knowing about it, and that the data it has submitted to the agency about this issue since at least 2009 was “selective, incomplete or inaccurate.” The settlement agreement also requires Takata to phase out its use of an ammonium nitrate propellant – which the agency said could be a factor in the inflator explosions – which can send shrapnel-like shards of metal flying toward the vehicle’s drivers and passengers. NHTSA will also choose an independent monitor to assess Takata’s compliance with the settlement over the next five years. Mark Rosekind, the NHTSA Administrator, said in a statement:
Today, we are holding Takata responsible for its failures, and we are taking strong action to protect the traveling public. 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.
The consent order also sets a timetable to recall all Takata ammonium nitrate inflators on the roads, unless the company can show that they are safe. It is unclear how this mandate will impact replacement air bag inflators manufactured by Takata that still contain this same propellant. Takata said in a statement that it would phase out its use of the ammonium nitrate inflators by the end of 2018, and that it would not enter into any new contracts to provide those inflators.
NHTSA’s step to accelerate the recall remedy impacts the dozen automakers affected by the recall. The agency called on them last month to first fix high-risk vehicles, and set a timetable for them have enough parts to fix all recalled vehicles. NHTSA will oversee the supply of remedy parts and manage future recalls with the assistance of the independent third-party monitor mentioned above. The affected vehicles contain a total of nearly 23 million air bag inflators that need to be replaced, as roughly 4 million of those vehicles have defective air bags on both the driver’s side and the passenger’s side. The natural recall completion rate as of late October, for all dozen auto manufacturers involved in the Takata recall, was just 22.5 percent.
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