The Transportation Secretary said that Takata has built and sold defective products, failed to acknowledge the defect and to provide full information to the NHTSA. He said this has been going on for years and has harmed many consumers.
As part of the Consent Order, Takata has admitted that they were aware of the defect but failed to issue the recall in a timely manner. The explosive airbags have caused seven deaths and 100 injuries in the United States.
The penalty against Takata is $200 million dollars. Of that $200 million, Takata is required to pay $70 million in cash. The additional $130 million would be due if Takata does not meet their new commitments ordered by the NHTSA or if any new violations are discovered. They are also required to phase out the manufacturing and sales of specific inflators and will be overseen for the next five years by an independent monitor appointed by the NHTSA.
For those who may not be familiar with the Takata airbag recall, 19 million vehicles in the United States have been recalled due to possible defective air bags. BMW, Chrysler, Ford, Honda, General Monitors (GM), Mazda, Mitsubishi, Nissan, Subaru and Toyota were among the major automobile makers to recall their vehicles. The vehicles had to be recalled due to air bags that could potentially explode. The defective air bags were produced by Takata, a Tokyo based manufacturer.
Takata is a manufacturer that many automobile makers turn to in order to reduce the cost of parts; however, this presents the risk for potential recalls.
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Automobile manufacturers are responsible for handling all recalls. This includes letting owners know of the recall and fixing the issue. To learn more about how repairs will be handled, you can see our previous blog post here.