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US fines Takata US$70m in air bag recall case

Published:Wednesday | November 4, 2015 | 11:00 AM

United States auto safety regulators fined Takata Corp of Japan US$70 million for lapses in the way it handled recalls of millions of explosion-prone airbags that are responsible for eight deaths and more than 100 injuries worldwide.

Regulators also ordered Takata to stop making the airbag inflators at the heart of the problem unless the company can prove they are safe.

Under a five-year agreement reached with Takata, the National Highway Traffic Safety Admini-stration (NHTSA)has the authority to add up to US$130 million to the penalty if the company fails to abide by the terms. In the deal, Takata admitted that it knew the inflators were defective, but failed to recall them in a timely manner.

The penalty would be a record if it grows to US$200 million.

Takata's airbag inflators can spew shrapnel into drivers and passengers in a crash. So far, about 23.4 million driver and passenger inflators have been recalled on 19.2 million US vehicles sold by 12 automakers.

Takata's airbags are inflated by an explosion of ammonium nitrate, and investigators so far have found that prolonged exposure to airborne moisture can cause the propellant to burn too fast. That can blow apart a metal canister designed to contain the explosion and shoot out metal fragments. Most of those injured or killed live in high-humidity states that border the Gulf of Mexico.

Still, the company and investi-gators have yet to discover the exact cause for the rupturing of the inflators. Because of that, the agreement announced Tuesday "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," NHTSA said in a statement.

"Unless new evidence emerges, the company will have to

recall all of its inflators," said Anthony Foxx, head of the US Department of Transportation, at a press conference to announce the agreement.

Regulators will also monitor the recalls to ensure replacement inflators are first sent to regions with the greatest chance of inflator problems.

Takata also still faces hundreds of lawsuits and a criminal investigation by the US Department of Justice.

NHTSA continues to investigate whether the company's side airbag inflators also should be recalled.

The order calls for an independent monitor who would make sure Takata abides by the terms. The monitor could be extended to a sixth year.

- AP