Takata hit with record fine for faulty air bags
Raising questions about the future of the embattled parts supplier, Honda Motor Co said it will no longer use front air bag inflators made by Japan's Takata Corp. Takata counts Honda as its biggest air bag customer. USA TODAY
U.S. automotive safety regulators on Tuesday said Japanese auto supplier Takata has agreed to accept penalties for failures involving exploding air bags that have killed at least eight people and injured at least 98.
Honda (HMC) is dumping longtime supplier Takata over its
deadly airbags. None of Honda's new car models under
development will use the company's airbag inflators. Newslook
The National Highway Traffic Safety Administration will fine Takata at least $70 million and could increase that penalty up to $200 million if the supplier does not adequately comply with a plan to accelerate recalls of defective air bags and eliminate a chemical that may have caused the incidents. It's the largest civil penalty in the agency's history.
In another blow, Honda said Takata had "misrepresented and manipulated test data" on air bag inflators and said it would not use the Japanese auto supplier's air bags in any future products. All of the known deaths so far attributable to Takata air bags occurred in Honda's vehicles.
Takata acknowledged "that it was aware of a defect but failed to issue a timely recall," NHTSA said.
Consequently, the Department of Transportation is leveraging never-before-used authority to force Takata and major automakers to speed their efforts to fix 19 million vehicles fitted with potentially defective air bags. NHTSA is an agency within the department.
NHTSA will also appoint a monitor to oversee Takata's air bag recall, which must be completed about two years earlier than previously planned. A date, however, was not specified.
"American drivers should not have to worry that a device designed to save their life might actually take it," Transportation Secretary Anthony Foxx told reporters at a press conference.
Foxx said Takata had fired employees as a result of the federal investigation, but he said he did not know how many. He also said Takata had moved from "kicking and screaming" over the suggestion that its air bags were defective to an admission of fault.
Takata said in a statement that it's "committed to being part of the solution" through further investigation of the matter, accelerated recalls and improved safety procedures.
"We deeply regret the circumstances that led to this," Takata CEO Shigehisa Takada said. "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."
The root cause of the exploding air bags remains a mystery, although federal investigators suspect that it may be related to ammonium nitrate propellant. As part of the consent agreement, Takata must phase out the use of ammonium nitrate propellant unless it can prove that it's not related to the exploding air bags.
In dumping Takata as an air-bag supplier, Honda said it had provided details and documents on the Takata data to NHTSA during the agency's investigation but had not publicly disclosed the information until Tuesday.
"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.
NHTSA also left open the possibility that it will require Takata to recall all the air bags it has ever produced with ammonium nitrate.
Regulators have urged consumers to get their vehicles repaired for free as soon as possible.
Vehicles that have been housed in hot, humid climates for at least five years are most at risk, suggesting that climate is a contributing factor. NHTSA is forcing the auto companies to give those vehicles priority in the recall process.
Foxx said he suspects that "millions more" vehicles may be recalled once NHTSA finishes its probe into the air bags.
NHTSA also expanded its investigation in October to include a side air bag inflator that has ruptured in accidents involving General Motors and Volkswagen vehicles.
The agency had already ordered a recall of 19 million vehicles — of which 14 million are from BMW, Fiat Chrysler, Ford, Honda and Mazda. The rest are from General Motors, Mitsubishi, Nissan, Subaru, Toyota, and Daimler.
About 6 million of those vehicles are considered by NHTSA to be of the highest priority because of their location and age.
Production of replacement air bag inflators and harnesses used to mount the devices is proceeding at a rate of about 2.8 million units per month. Other air bag manufacturers are making about 70% of the parts to aid Takata in speeding the repairs.
NHTSA's action against Takata drew a swift reaction from U.S. Sen. Richard Blumenthal, D-Conn., and U.S. Sen. Edward Markey, D-Mass., who have both criticized the auto industry for safety failures.
"Meager fines do nothing more than change the costs of doing business and provide no meaningful deterrence for continuing reprehensible and irresponsible behavior that costs countless preventable injuries and lives," they said in a joint statement. "Today's action provides further evidence that the cap on civil penalties levied by NHTSA must be eliminated by Congress, and we must also reform the criminal penalties associated with concealing life-saving information about defects from the public."
Nathan Bomey on Twitter: @NathanBomey.