Takata Fined $70 Million Over Exploding Air Bags

DETROIT (AP) -
National Highway Transportation Safety Administrator Mark Rosekind (L) accompanied by Transportation Secretary Anthony Foxx, speaks during a news conference about Takata air bags, Tuesday. (AP Photo/Alex Brandon)
National Highway Transportation Safety Administrator Mark Rosekind (L) accompanied by Transportation Secretary Anthony Foxx, speaks during a news conference about Takata air bags, Tuesday. (AP Photo/Alex Brandon)

U.S. auto safety regulators fined Japan’s Takata Corp. $70 million Tuesday for failing to promptly recall millions of explosion-prone air bags blamed for eight deaths and more than 100 injuries worldwide.

The government also ordered Takata to stop making the inflators at the heart of the problem unless the company can prove they are safe, and set a schedule over the next two years for replacing many of the devices already in use. Takata may eventually have to recall all its inflators.

The company admitted that it knew for years that the inflators were defective but failed to recall them in a timely manner.

“Delay, misdirection and refusal to acknowledge the truth allowed a serious problem to become a massive crisis,” Transportation Secretary Anthony Foxx said.

Under the five-year agreement with the air bag maker, the National Highway Traffic Safety Administration can increase the penalty to a record $200 million if the company fails to abide by the terms. I

The biggest fine ever handed out by NHTSA is the $105 million levied against Fiat Chrysler earlier this year for failing to report safety problems and follow through on 23 recalls.

Takata’s air bag inflators can rupture and hurl shrapnel at drivers and passengers in a crash. So far, about 23.4 million driver’s-side and passenger-side inflators have been recalled on 19.2 million U.S. vehicles sold by 12 automakers.

NHTSA Administrator Mark Rosekind said Takata’s misconduct dates to at least 2009, when it failed to tell the agency about the problem. Automakers are required to notify NHTSA of defects within five days of discovering them.

Regulators said Takata also provided them with “selective, incomplete or inaccurate data” for years.

Honda, the biggest customer for Takata air bags, essentially fired the supplier Tuesday. All of the air bag-related deaths reported so far have been in Honda vehicles.

Takata’s air bags are inflated by an explosion of ammonium nitrate, and investigators have found so far that prolonged exposure to airborne moisture can cause the propellant to burn too fast. That can blow apart a metal canister and shoot out fragments.

Most of those injured or killed live in high-humidity states along the Gulf of Mexico. The injuries, mainly to drivers, included severe neck cuts and facial injuries, as well as the loss of eyesight and hearing.

Still, Takata and government investigators have yet to discover the exact cause of the ruptures. With that in mind, the Transportation Department is giving Takata three to four years to prove that all of its inflators are safe or to identify the cause of the ruptures.

Takata still faces hundreds of lawsuits and a federal criminal investigation. NHTSA also continues to investigate whether the company’s side air bag inflators should also be recalled.