The Japanese maker of air bags linked to the deaths or injuries of dozens of motorists has agreed to pay a U.S. civil penalty of up to $200 million and have an independent monitor oversee the nation’s largest-ever automotive safety recall.
Under a five-year consent decree reached with the National Highway Traffic Safety Administration and announced Tuesday, the Tokyo-based Takata Corp. agreed to pay $70 million and faces as much as $130 million more in fines if it doesn’t adhere to terms of the settlement, a U.S. regulator said Tuesday.
At $200 million, it would be the largest civil penalty in the agency’s history.
“American drivers should not have to worry that a device that is meant to save their life might actually take it,” U.S. Transportation Secretary Anthony Foxx said at a news conference in Washington.
The decree orders Takata to fire some employees and phase out a chemical propellant suspected of degrading over time, leading air bags to inflate with explosive force. The agency is also, for the first time, ordering automakers speed up recalls that have so far reached only about a quarter of the affected cars.
Asked for comment, a Takata spokesman said the company was preparing a statement.
Foxx had harsh words for Takata, whose air bags have been shown to improperly inflate in some circumstances and spray the passenger compartment with deadly bits of metal. NHTSA has confirmed seven fatalities and 100 injuries in the U.S. One overseas death has also been linked to the defective parts.
“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,” Foxx said. “This has been a mess and today DOT is stepping in to clean up the mess.”
A separate legal order Foxx announced lays out a schedule for the 12 automakers and prioritizes repairs based on risk. It’s the first time NHTSA has used its authority to force the industry to speed up a recall.
The “coordinated remedy order” divides the more than 19 million vehicles into priority groups. The deadline for the first priority group to be repaired is March 2016. Others begin in 2017 and run through 2019.
Some Takata employees will be fired as part of agreement. Company has 60 days to tell NHTSA who they are. And the agency is ordering Takata to phase out use of ammonium nitrate, the chemical it used to inflate the airbags.
Takata won’t use the compound in any future contracts with automakers. It will phase out use as current contracts are fulfilled. It agreed to complete all use by end of 2018.
A total of 23 million defective inflators need to be replaced, but less than a quarter of the affected cars in the U.S. have been repaired, NHTSA said in a briefing Oct. 22. Motorists can go to www.safercars.gov to see if their vehicles are in need of the free repair.
Honda Motor Co., which used Takata air bags in many of its vehicles, said in a statement that no new Honda and Acura models currently under development will be equipped with a front driver or passenger Takata air-bag inflator.
Honda pledged to work with the company and regulators. Its review of documents from Takata suggest misrepresented test data, the automaker said.
“Honda expects its suppliers to act with integrity at all times and we are deeply troubled by this apparent behavior,” the company said in a statement.
Neither NHTSA nor Takata nor the affected automakers have been able to determine a root cause for the air-bag defect. The agency has said the pattern of explosions in hot-weather states suggest the defect is triggered by prolonged, constant exposure to high humidity and a car’s age.