Takata Pays $70 Million, Agrees to Change Airbag Inflator Chemistry

Takata Corp. has agreed to pay a $70 million (8.5 billion yen) fine for its delay in reporting defective airbag inflators that could explode when triggered. The company also will phase out the ammonium nitrate propellant considered a key factor in the failures. 

The agreement is part of a consent order with the National Highway Traffic Safety Administration. Takata could face additional fines totaling as much as $130 million if it fails to comply with the decree or if NHTSA discovers further violations. An independent monitor will check on Takata’s compliance over the next five years.

The order sets a schedule to recall some 23 million ammonium nitrate-charged Takata inflators in 19 million vehicles currently on the road in the U.S. None of the targeted vehicles will be excused from the callbacks unless Takata can prove their inflators are safe or can explain exactly why the devices are prone to rupture.

The decree gives Takata until the end of 2018 to fulfill current supply contracts to deliver inflators that use ammonium nitrate. But NHTSA says it could order those devices recalled unless Takata can prove them safe by then. 

NHTSA issued a separate order to Takata and 12 vehicle makers to prioritize the recalls and determine when the manufacturers will be able to replace the Takata inflators with safe alternatives. The agency will then coordinate the parts supply and recall sequence under powers it was granted under the 2000 TREAD Act.

NHTSA has ordered affected carmakers to organize their recalls into three phases that begin at the end of March, September and December 2016. All three campaigns must be completed by the end of 2017.

A fourth group of recalls will apply to vehicles that may receive a new interim inflator with the same potential defect as the original device until alternate parts are available. Those campaigns must be completed by the end of 2018.