Takata Faces $200 Million in Fines for Failure to Report Airbag Defect
Posted on behalf of Greg Coleman Law on Nov 05, 2015 in Defective Product
Takata Corporation, one of the worlds largest automotive airbag manufacturers, is now facing up to $200 million in fines from the National Highway Traffic Safety Administration (NHTSA), a division of the U.S. Department of Transportation. The fines relate to the companys defective airbag inflators, which have resulted in the largest recall of any kind in history. It is also the largest civil penalty in the history of the NHTSA and a test of their authority to regulate the auto industry.
Takata's trouble with the airbag inflators, which use ammonium nitrate as a propellant, began in 2008 with a voluntary recall. The inflators can rupture with explosive force, shooting small fragments of metal, much like shrapnel from a grenade. Seven deaths and at least 100 injuries have been attributed to the faulty airbags. According to the New York Times, the company knew about the problem as far back as 2004.
The recall has expanded to 34 million vehicles across many auto-makers and car models. This makes it the largest defective product recall in history, automotive or otherwise. In the latest news, Honda has dropped Takata as a supplier, stating trust issues related to the airbag fiasco.
The penalty is comprised of $70 million in fines due in cash, plus an additional $130 million if Takata fails to comply with the agency's orders. These stipulations are broken down into meeting a recall deadline of Dec. 31, 2018 and penalties for any future safety violations, including continued use of ammonium nitrate inflators.
The primary reasons cited for the penalty are failure to notify the NHTSA of the defective airbags, and using inaccurate or misleading data in their reports. One newspaper reported that a manager ordered known defective units to be discarded and not included in safety test data. Several employees have been fired from the company as a result of the scandal.
Takata is also being ordered to encourage a safety culture and take several steps to improve its safety assessment procedures. Another aspect of the penalty is the appointment of a third-party agency to oversee and report on their safety compliance.
This is not only the largest fine imposed by the NHTSA, but also the first time they are exercising their authority to directly intervene in a recall. The agency released a statement citing the TREAD act, passed in 2000, as the source for this authority. According to their release, they have the power for remedial intervention if there is a risk of death or serious injury.
If you or a family member has suffered an injury related to a defective Takata airbag, you may be entitled to compensation. The skilled product liability attorneys at Greg Coleman Law have been following the Takata airbag problem and are prepared to assist you with your legal questions. Contact us today to get the justice you deserve.