Takata receives record-breaking penalty from NHTSA for recalled airbags

By Tyson Fisher, Land Line staff writer | Wednesday, November 04, 2015

For the second time this year, the U.S. Department of Transportation’s National Highway Traffic Safety Administration has handed down a record-breaking civil penalty. Takata will have to pay as much $200 million for its role in a massive recall resulting in defective airbags, surpassing a record set by Fiat Chrysler earlier this year.

NHTSA sent Takata two orders earlier this week: One imposes the largest civil penalty in NHTSA’s history and the other implements the administration’s authority to speed up the repair process. The orders put recalls that pose the greatest risk to safety on top of the repair list and sets deadlines for potential recalls in the future due to Takata’s airbags.

Takata must pay $70 million in cash, according to NHTSA documents. Another $60 million must be paid if Takata fails to eliminate phase-stabilized ammonium nitrate-based airbag inflators by the deadline outlined in the order. Takata will also be slapped with an additional $70 million fine if NHTSA discovers other violations of the Motor Vehicle Safety Act.

NHTSA will have oversight of Takata over the next five years. An independent monitor selected by the agency will assess, track and report Takata’s compliance with the orders. The monitor will also oversee the Coordinated Remedy Program, which prioritizes the remedies according to greatest risk factor.

For the first time in NHTSA’s history, the agency is exercising its authority to accelerate repairs on affected vehicles. NHTSA was granted that authority in the 2000 TREAD Act. Replacements must be available for affected customers by March 2016. Remedies must be provided by the end of 2019.

Back in May, Daimler trucks were added to the list of more than 7 million vehicles with faulty Takata airbags. Official recall documents reveal that Takata airbags are susceptible to ejecting shards of metal fragments once activated. Metal projectiles could lead to injury and death. Six deaths have been blamed on the airbag defect.

During an investigation, NHTSA found that Takata failed to notify the agency of the defect within five days of the manufacturer discovering the defect. Takata also failed to produce complete and accurate data.

In July, Fiat Chrysler received the largest penalty from NHTSA at the time. Fiat Chrysler had to pay up to $105 million in civil penalties due to defective suspension parts and Jeeps that were susceptible to catching on fire. Similar to Takata’s fine, Fiat Chrysler had to pay $70 million in cash and faced up to $35 million in additional penalties if the manufacturer failed to meet performance requirements or committed additional violations.

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