Takata Airbags

As a result of the massive number of recalls issued because of faulty Takata airbags, the NHTSA issued a Consent Order to Takata which fined the company $70 million in November of 2015 for violations of the Motor Vehicle Safety Act. The $70 million penalty is payable in cash, and an additional $130 million could become due if the company fails to comply with a plan to accelerate the recalls or if additional violations of the Motor Vehicle Safety Act are discovered.

The Consent Order by the NHTSA also requires Takata to recall all of their ammonium nitrate inflators unless the company can prove they are safe or find out why the inflators keep rupturing. Additionally, the Consent Order requires an independent monitor selected by the NHTSA to keep track of Takata’s compliance.

To make matters worse, Honda alleged that Takata misrepresented and manipulated test data on airbag inflators. In a statement issued by Takata, the company acknowledged that they were aware of a defect in the inflators but did indeed fail to timely issue a recall. In response to the further wrongdoing by Takata, the NHTSA is using authority that has never been used before to force Takata to speed up the recall process.

A Coordinated Remedy Order was also issued to Takata which requires Takata and the vehicle manufacturers involved in the recall to prioritize the vehicles that will get repaired first based on the risk. Under the Coordinated Remedy Order, the NHTSA will oversee the supply of recall parts and manage future recalls. Finally, the Coordinated Remedy Order requires all of the vehicle manufacturers involved in the recall to fix the highest-risk inflators by March 2016, with the rest of the recalls completed by late 2019.