$70 Million Takata Fine

U.S. auto-safety regulators penalize Takata Corp. with a $70 million fine for lapses with rupture-prone air bags and ordered the company to cease using a controversial propellant in their safety devices. The Japanese manufacturer agreed to the penalty for failing to alert regulators in a timely manner to a defect in some air-bag inflators that can cause them to explode and spray deadly shrapnel in vehicle cabins, the National Highway Traffic Safety Administration said. Takata also accepted to fire some employees that regulators declined to name. Stay tuned to latest news and get car insurance quotes if something big happens on the auto market.

Takata had misinformed regulators by providing incomplete or inaccurate information on the safety defect dating back to at least 2009, regulators declared. That included providing misleading test reports and failing to clarify inaccurate information in a January 2012 presentation to regulators, according to the settlement.

Takata will pay the $70 million in six installments over five years under the settlement’s terms. The company will have to pay an additional $130 million if it violates terms of the settlement or federal law. Regulators described the possible $200 million payout as a record penalty.

“We deeply regret the circumstances that led to this,” said Takata Chief Executive Shigehisa Takada, adding the company is “committed to being part of the solution.” He pledged to comply with terms of the settlement, which will “enable us to focus on rebuilding the trust of auto makers, regulators and the driving public.”

Regulators also issued an unprecedented order to the company and other manufacturers to speed recalls of the problematic air bags amid concerns repairs are lagging. They highlighted the need of repairs of vehicles with older air bags with prolonged exposure to humid climates, ordering car manufacturers to fix those vehicles by the end of 2017.

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by Ciprian Gurgu