Product News and Recalls

Airbag Manufacturer Takata Could Face up to $200 Million in Fines

takata agrees to $70 million settlementIt’s every driver’s worst nightmare: those microseconds when your brain has done the math and you know you’re about to have a bad collision.

From the moment of first impact, the computers in modern cars are doing math of their own. Calculating the force of the impact against other environmental factors, the car is asking itself millions of times per second if things are bad enough to deploy its airbags.

As consumers, we are left to hope against all hope that the car makes the right decision. We never considered, however, what could happen if the airbag itself was faulty.

Unfortunately, drivers of some of the world’s biggest and most trusted brands of vehicles including Honda, BMW, Ford, and Mazda would find out. Some would even lose their lives as the Takata-manufactured airbags in their cars deployed; filling their cabins with shrapnel instead of delivering the life-saving device.

The Takata airbag defect was one of the largest scandals ever to rock the automotive industry. Takata had fought assertions that their airbags were defective for over 10 years. Hundreds of people would be injured as devices designed to save people would cause immeasurable harm instead.

Finally, in June of 2015, Takata stopped misleading the public, and admitted that their product was indeed defective. The news sent automakers scrambling as the final tally of affected vehicles soared to some 34 million worldwide. That’s one in every seven vehicles on an American road.

The recall itself has not gone smoothly and auto regulators in the United States are finished waiting.

A settlement between Takata and the NHSA required the payment of a $70 million fine by Takata earlier this month. Additionally, the settlement leaves the door open to an additional $130 million in fines if the company fails to act in accordance with the terms of the settlement structure. According to CNBC, if Takata is subjected to the full brunt of the $200 million fine, it would be the largest civil fine ever imposed by the National Highway Transportation Safety Administration.

Takata is, of course, spinning the deal as their way of making amends for their infractions. The company, accused of failing to initiate a recall for a product known to be faulty, said in a statement that the settlement is “an important step forward for Takata that will enable [them] to focus on rebuilding the trust of automakers, regulators, and the driving public.”

The driving public would have preferred not to fight with the company for a decade over air bags that were shredding their loved ones with shrapnel.