AP Source: Gov't to fine Takata $70M in air bag recall case
DETROIT (AP) — U.S. auto safety regulators will fine Takata Corp. of Japan $70 million for lapses in the way it handled recalls of millions of air bag inflators that can explode with too much force, a person briefed on the matter said Tuesday.
The National Highway Traffic Safety Administration has the authority to add up to $130 million to the penalty if Takata doesn't obey terms of a five-year agreement reached over the issue, according to the person, who asked not to be identified because the deal hasn't formally been announced.
The agency has scheduled a 2 p.m. news conference in Washington to unveil the penalty, which could be a record if it grows to $200 million. The person said that Takata will pay the fine in six installments over five years.
Takata's air bag inflators can spew shrapnel into drivers and passengers in a crash and are responsible for eight deaths and more than 100 injuries worldwide. So far, about 23.4 million driver and passenger inflators have been recalled on 19.2 million U.S. vehicles sold by 12 automakers. The agency continues to investigate whether the company's side air bag inflators also should be recalled.
Takata also still faces hundreds of lawsuits and a criminal investigation by the U.S. Department of Justice.
The order calls for an independent monitor who would make sure Takata abides by the terms. The monitor could be extended to a sixth year. Specific terms of the order were not available ahead of the news conference, and spokesmen for NHTSA and the U.S. Department of Transportation would not comment.
A total penalty of $200 million would be the largest ever imposed by NHTSA, surpassing the record $105 million penalty levied against Fiat Chrysler earlier this year for failing to report safety issues and follow through on 23 different recalls.
But Sen. Richard Blumental, D-Mass., a frequent NHTSA and Takata critic, said the $70 million fine seems like a slap on the wrist and should be larger. "The penalty seems small compared to the consequences of the concealment and disregard" for the law, he said.
Also at the news conference, NHTSA is expected to make an announcement on whether it will begin managing the Takata recalls to make sure replacement air bag inflators are sent to the vehicles and places that need them the most. The agency also could announce additional recalls. It has sent letters to seven more automakers warning them that their Takata inflators could be subject to recall.
Takata's air bags are inflated by an explosion of ammonium nitrate, and investigators so far have found that prolonged exposure to airborne moisture can cause the propellant to burn too fast. That can blow apart a metal canister designed to contain the explosion and shoot out metal fragments. Most of those injured or killed live in high-humidity states that border the Gulf of Mexico.
People, mainly in driver's seats, have suffered severe neck cuts and facial injuries and have lost eyesight and hearing due to the explosions.
Shortly after the NHTSA investigation began in June of last year, Takata resisted and said NHTSA didn't have the authority to make it do any recalls. But the company later relented and agreed to the agency's demands.