Takata fined $200M by NHTSA; Loses Honda as customer

Takata, the embattled airbag manufacturer whose exploding device inflators have been at the heart of the largest safety recall in history, has agreed to a multipart settlement with the Department of Transportation (DOT) and the National Highway Traffic Safety Administration (NHTSA). Key to this agreement, the airbag manufacturer will stop using the propellant suspected as the cause of the exploding inflators. Takata must also replace all airbag installations that use ammonium nitrate.

According to NHTSA, more than 23 million defective inflators in 19 million U.S. vehicles must be replaced. And, Takata must acknowledge that it dragged its feet in issuing a timely recall. Further, Takata will operate under an independent monitor for five years to ensure compliance with the order. Takata has agreed to pay penalties of more than $200 million. Of that amount, $70 settles fines needed to resolve NHTSA sanctions, plus another $130 million in civil penalties.

Transportation Secretary Anthony Foxx, announcing the airbag recall settlement yesterday at a press conference said that Takata built and sold bad inflators for years. “It refused to acknowledge they were defective. It provided incomplete, inaccurate and misleading information to NHTSA, to the companies using its inflators and the public,” he continued.

Foxx angrily gave the inflators a vote of no-confidence, according to Automotive News. He noted that DOT, in the wake of Takata’s continual evasion, stonewalling and foot-dragging, has no “confidence in these products going forward.”

Takata CEO Shigehisa Takada called the agreement with NHTSA an “important step forward” in regaining the trust of regulators, business and the public. He also indicated the consent agreement is a “pivot point” as the company moves from its former propellant to a new, non-ammonium nitrate-based inflator propellant. Takada promised his firm will work closely with regulators and regretted the whole issue, again issued a public apology.

A bit after DOT announced the settlement with Takata, the manufacturer learned that its largest customer, Honda, will no longer be doing business with it. Because Takata “misrepresented and manipulated test data,” American Honda will no longer be using Takata’s products. Honda owns a 1.1 percent stake of the airbag manufacturer, and there was no indication whether it will end that relationship.

In addition to the consent decree, NHTSA has ordered the 12 automakers whose products have been impacted the airbag issue to begin prioritizing replacement of the inflators. In making this announcement, NHTSA told automakers that replacement should be based on the risk factors identified so far. The risk factors seem to be primarily humidity and temperature-related. NHTSA also wants a schedule of replacements.

Due to the scale of the recall, over 40 million vehicles worldwide and 19 million in the U.S., NHTSA has used powers granted in 2000 to take the lead in the recall. The agency has not used this authority before. The agency has the right to determine recall priority and resource allocation.

The entire issue surfaced last spring when the sixth, seventh and eighth deaths related to exploding inflators burst upon the scene. Because these devices can be particularly fatal, automakers have rushed to recall and start repairs on affected cars and trucks. To date, there have been eight deaths and more than 100 injuries related to exploding inflators. The inflator failures have been caused by overpressure that causes the inflator housing to burst on deployment sending shards scything through the passenger compartment. Overpressure has been linked to propellant deterioration that, in turn, has been associated with moisture.

Be the first to comment

Leave a Reply

Your email address will not be published.


Time limit is exhausted. Please reload CAPTCHA.