Takata Facing Record-Breaking Fine Amid Airbag Recall

Troubled auto parts maker Takata is breaking records for all the wrong reasons. The recall on vehicles equipped with their defective airbags is the largest in history, affecting nearly 40 million vehicles worldwide. This week it was announced that Takata will face the highest financial penalty ever imposed in the auto industry.

Last year, the National Highway Traffic Safety Administration imposed a $70 million fine against Honda – the highest fine that the federal agency ever imposed on the auto industry at that time. Now, Takata may end up paying more than double that amount.

After more than a year of ever-expanding recalls and investigations, the NHTSA has issued a penalty of up to $200 million – $70 million will be paid initially, and the remaining $130 million will come due if Takata fails to meet its commitments, which include stopping the use ammonium nitrate in its airbag inflators (the chemical used in the inflator which can become unstable and cause the inflator to rupture and scatter shrapnel) unless it can prove that this chemical is safe. If they cannot prove the safety of ammonium nitrate, not only would Takata be required to phase it out, but also to recall millions more vehicles currently equipped with these inflators. Takata will also be penalized if further safety violations are discovered.

The announcement comes after years of resistance from Takata, as the auto parts supplier insisted, despite mounting evidence, that testing revealed a defect in their airbag inflators.

Takata took back-to-back hits this week

To make matters worse, the same day that the NHTSA announced the penalty, Honda, Takata’s biggest customer and one of the most popular automakers in the U.S., announced that it was dropping Takata as its airbag supplier. Takata airbags have been tied to at least 100 injuries, and eight deaths – all eight fatalities occurred in Honda vehicles.

Friday, Toyota joined Honda and dropped Takata as its airbag supplier.

If you or a loved one have been in a car accident in which the airbag exploded sending shrapnel into the cabin, or if the airbag deployed when it should not have, contact our office for a free evaluation of your case. Fill out our email form, or call us 24/7 at 855-866-5529.