US fines on Takata could be $200 million for faulty air bags

Air-bag supplier Takata might get $200 million fine after US auto safety regulator takes action against company, ordering to stop making inflators

Photo by: Reuters
Photo by: Reuters

A logo of Takata Corp is seen with its display at a showroom for vehicles in Tokyo, Japan on May 8 2015.

Updated Nov 6, 2015

The top US auto safety regulator on Tuesday imposed a fine that could be as high as $200 million on air-bag supplier Takata Corp and ordered it to stop making inflators that use ammonium nitrate as a propellant.

The National Highway Traffic Safety Administration cited the chemical as a factor in explosive air-bag ruptures that have caused seven deaths and nearly 100 injuries in the United States.

In an unusual move, Honda Motor Co on Tuesday said it was "deeply troubled" by evidence suggesting Takata "misrepresented and manipulated test data for certain air bag inflators." Honda was Takata's largest air-bag customer.

In a Tuesday afternoon briefing, US Transportation Secretary Anthony Foxx said: "We are ordering Takata to phase out production of new inflators using ammonium nitrate. And unless new evidence emerges, the company will have to recall all of its ammonium nitrate inflators."

NHTSA, which is part of the Department of Transportation, accused Takata of providing "selective, incomplete or inaccurate data" from 2009 to the present.

Foxx said NHTSA had "taken Takata from being in a kicking-and-screaming mode to being part of the solution."

NHTSA said $70 million of the Takata fine was payable in cash, with another $130 million due if company does not comply or if the agency uncovers additional violations of safety regulations.

The regulator said 12 automakers had recalled 19 million vehicles with more than 23 million potentially defective inflators. Foxx said millions of unrecalled vehicles could still be on the road with inflators that use ammonium nitrate, a compound that can become unstable when exposed to moisture.

"We're putting the burden on Takata to show that ammonium nitrate is safe," Foxx said. "We have enough suspicion about this substance to believe there is risk to the consumer. And until (Takata) can prove that it's safe, we will not see ammonium nitrate in these air bags in the future."

NHTSA also said it might take four more years for manufacturers to come up with enough replacement inflators for the vehicles that already have been recalled.

The agency ordered carmakers to accelerate repairs on "high-risk" inflators, including those in areas of high relative humidity, and to have enough replacement parts on hand by June 2016.

NHTSA said vehicles that have received "interim remedies" because of supply and design issues must be repaired by the end of 2019.