Takata Fined $70 Million for Auto Safety Violations

The National Highway Traffic Safety Administration (NHTSA) fined Takata $70 million for marketing defective air bag inflators.

Takata was represented by Andrew Levander of Dechert in New York.

takata

“For years, Takata has built and sold defective products, refused to acknowledge the defect, and failed to provide full information to NHTSA, its customers, or the public,” said Transportation Secretary Anthony Foxx. “The result of that delay and denial has harmed scores of consumers and caused the largest, most complex safety recall in history. Today’s actions represent aggressive use of NHTSA’s authority to clean up these problems and protect public safety.”

The NHTSA consent order issued to Takata imposes a record civil penalty of $200 million and requires the company to phase out the manufacture and sale of inflators that use phase-stabilized ammonium nitrate propellant, which is believed to be a factor in explosive ruptures that have caused seven deaths and nearly 100 injuries in the United States.

 

The consent order also lays out a schedule for recalling all Takata ammonium nitrate inflators now on the roads, unless the company can prove they are safe or can show it has determined why its inflators are prone to rupture.

Takata admitted that it was aware of a defect but failed to issue a timely recall, a violation of the Motor Vehicle Safety Act.

NHTSA also issued findings that Takata provided NHTSA with selective, incomplete or inaccurate data dating back to at least 2009, and continuing through the agency’s current investigation, and that Takata also provided its customers with selective, incomplete or inaccurate data.

Of that $200 million fine, $70 million is payable in cash.

An additional $130 million would become due if Takata fails to meet its commitments or if additional violations of the law are discovered.

The order requires an independent monitor selected by NHTSA to assess, track and report the company’s compliance with the phase-out schedule and other requirements of the consent order, and to oversee the Coordinated Remedy Program.

“We are holding Takata responsible for its failures, and we are taking strong action to protect the traveling public,” said NHTSA Administrator Mark Rosekind. “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.”

NHTSA is using for the first time legal authority which was established in the 2000 TREAD Act to allow the agency to accelerate safety defect repairs if manufacturers’ remedy plans are likely to put Americans at risk.

NHTSA announced in June that it was considering use of that authority, and has since gathered information and comment from vehicle manufacturers, parts suppliers and the public as part of a proceeding to determine whether and how to best address recalls involving more than 23 million inflators, 19 million vehicles and 12 automakers.

Copyright © Corporate Crime Reporter
In Print 48 Weeks A Year

Built on Notes Blog Core
Powered by WordPress