Takata Slapped With Record Fine; Millions More Airbags May Be Recalled | Edmunds

Takata Slapped With Record Fine; Millions More Airbags May Be Recalled


WASHINGTON — Saying it was stepping in to "clean up the mess" in the massive Takata airbag recall, the federal government on Tuesday imposed a record civil penalty of $200 million on the Japanese supplier, ordered the phase out of a controversial airbag chemical propellant and said "potentially millions" more Takata airbags in U.S. vehicles will need to be recalled.

The defective airbags can explode with too much force, spewing metal shrapnel at vehicle occupants. The faulty airbags are responsible for eight deaths worldwide and nearly 100 injuries in the U.S.

The "failures put millions of Americans at risk," said U.S. Department of Transportation Secretary Anthony Foxx during a webcast of the announcement. "This has been a mess. (We're) is stepping in to clean up the mess."

He added: "For years, Takata has built and sold defective products, refused to acknowledge the defect and failed to provide full information to the (National Highway Traffic Safety Administration), its customers or the public."

The federal government now will coordinate and speed up a patchwork of Takata recalls.

Federal officials say the accelerated recalls mean that affected vehicles will be fixed roughly two years ahead of schedule, even though repairs may stretch into late 2019.

Takata has been ordered to pay $70 million in cash as part of the civil penalty. An additional $130 million would become due if Takata fails to meet its commitments to the government or if additional violations of the Safety Act are discovered.

The National Highway Traffic Safety Administration also ordered Takata to phase out the manufacture and sale of inflators that use phase-stabilized ammonium-nitrate propellant, which is believed to be a factor in the explosive ruptures.

However, federal officials noted that they still haven't pinpointed a root cause of the defect.

NHTSA said nearly all airbags with the ammonium-nitrate propellant will be recalled, unless Takata can prove they are safe. The chemical has been used in some of the replacement airbags, which means that consumers who had their recalled vehicles repaired may need to return to their dealer for another final repair.

Foxx said ammonium nitrate will not be used in new airbags "going forward."

But there were few answers for consumers who are worried about whether the airbags in their vehicles contain the chemical and whether they are now subject to the Takata recall.

"As we go forward into the future, we'll have to figure out the true scope of this recall," Foxx said. "There are potentially millions more cars."

Federal officials said the actual number is unknown at this point. Currently, the Takata recalls involve more than 23 million inflators, 19 million vehicles and 12 automakers.

Under NHTSA's Coordinated Remedy Order, automakers must ensure they have sufficient replacement parts on hand to meet customer demand for the highest-risk inflators by June 2016, including those in geographic areas with high absolute humidity, and to provide final remedies for all vehicles by the end of 2019.

American Honda, one of the automakers significantly affected by the Takata recall, said it is "still evaluating the full impact of the NHTSA consent order with Takata."

But Honda noted it became "aware of evidence that suggests that Takata misrepresented and manipulated test data for certain airbag inflators."

"Honda expects its suppliers to act with integrity at all times and we are deeply troubled by this apparent behavior by one of our suppliers," the company said.

Secretary Foxx said that, in agreeing to the consent order with the government, Takata has gone from "being in a kicking-and-screaming mode to being part of the solution."

Takata issued a statement to Edmunds late Tuesday saying it is "committed to being part of the solution" and said it will not enter into any new contracts to provide phase-stabilized ammonium-nitrate inflators to automakers.

The Japanese supplier said it will pay the civil penalty of $70 million in six installments by October 2020 and acknowledged it may be liable for additional civil penalties of up to $130 million if it fails to meet certain obligations of the consent order.

Shigehisa Takada, chairman and CEO of Takata, said, "We deeply regret 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. Today's announcement also marks a pivot point for Takata by setting out an orderly transition to the next generation of inflators. We will comply with all aspects of the settlement and are committed to being part of the solution."  

Takata is dismissing some of its employees as part of the federal investigation and will be supervised by an independent monitor selected by NHTSA for the next five years.

NHTSA Administrator Mark Rosekind offered some basic advice for consumers in the meantime.

"The risk from these defective inflators to you and your family is significant," he said. "Please take action. Go to safercar.gov and enter your VIN. If it says you have a recall or if you receive a recall notice, call your dealer and make an appointment."

Edmunds says: The feds take unprecedented steps to tidy up the Takata mess, but the recalls are likely to drag on for years and affect even more consumers and vehicles in the long run.

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