US regulators fine Takata up to $200 million for defective airbags

US regulators fine Takata up to $200 million for defective airbags

[JURIST] US regulators on Tuesday imposed a fine of up to $200 million on auto part manufacturer Takata [corporate website] for failing to disclose the defect of millions of their airbags to regulators in a timely manner. The National Highway Traffic Safety Administration (NHTSA) [official website] levied a base fine of $70 million [NYT report] with the possibility of an additional $130 million if Takata does not abide by the consent order issued by the NHTSA, which includes the appointment of an independent safety monitor. Particularly, the consent order requires that the company phase out the manufacture and sale of inflaters that use phase-stabilized ammonium nitrate propellant. During Secretary Anthony Foxx’s [official profile] press conference [YouTube video], he stated, “Takata said it had isolated the problem. It said it had uncovered the mistakes that led to ruptures and it had pledged its products were safe. … But we know that the ruptures have continued. … American drivers should not have to worry that a device designed to save their life might actually take it.” This consent order comes as regulators have been imposing heavier fines and penalties against defective auto part manufacturers.

Auto manufacturers have continually faced punishment for issues with their vehicles and parts in the US. In July the NHTSA determined [JURIST report] that Fiat Chrysler failed to provide a remedy and notices for 23 recalls related to malfunctions of their automobiles. The 23 recalls involved “fuel systems that can catch fire in rear crashes, defective ignition switches that can disable a vehicle’s airbags and defective air bags that can unexpectedly go off.” In 2014, the US Department of Justice announced [JURIST report] a $1.2 billion settlement agreement with Toyota for misleading customers and US regulators. In November 2012 Toyota settled [JURIST report] a class action lawsuit for $35.5 million brought by its shareholders failing to disclose vehicle quality issues. In 2010 Toyota agreed [JURIST report] to pay $32.4 million in fines following investigations by the National Highway Traffic Safety Administration. JURIST Guest Columnist Bruce Aronson in 2011 argued [JURIST op-ed] that the recent corporate scandals in Japan, including the Toyota recalls, highlight the need for reform of that country’s corporate governance structure.