The massive recall due to Takata’s airbag problem has plagued more than 19 million vehicles from 12 auto manufacturers.
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The National Highway Traffic Safety Administration (NHTSA) issued penalties for defects in Takata air bag inflators on Tuesday.
Regulators have linked eight deaths – all in cars made by Takata’s biggest air bag customer Honda – to the inflators, which use ammonium nitrate and can explode with too much force, spraying metal fragments inside vehicles.
Toyota Motor Corp has also said it was testing inflators from Takata rivals.
In a message picked up by CBS News, Transportation Secretary Anthony Foxx said, “For years Takata has built and sold defective inflators, refused to acknowledge the defect, and supplied inaccurate and misleading information, putting millions of Americans at risk”. Honda is the biggest customer for Takata air bags and holds a 1.2 percent stake in the company, according to Eikon.
Publicly Honda stood by Takata’s side through the deaths, recalls and government actions taken against the airbag manufacturer, but the final blow came when Takata supplied internal documents to the automaker.
Takata still faces hundreds of lawsuits and a federal criminal investigation.
The company has since announced that they will no longer be using Takata’s products in their cars, claiming that Takata had apparently “misrepresented and manipulated test data.” .
“If it was only about paying the fine, that would be the end of it. But after Honda ditched it, the crisis now threatens Takata’s mainstay business”, said Nobuyuki Fujimoto, senior market analyst at SBI Securities. This order also specifies a schedule for recalling all Takata ammonium nitrate inflators now on the road unless the company can prove they are safe or can show it has determined why its inflators are prone to rupture.
“Because they make their own inflators, Takata earns high margins on its air bags”.
Takata will pay the $70 million fine in six instalments through October 2020.
“We still think our product is safe, but we realise there are many concerns from consumer, automakers and USA regulators”, Takata chief Shigehisa Takada told reporters.
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The Tokyo-listed stock plummeted 23 percent to 914 yen ($7.50) by the break, after it tumbled more than 13 percent Wednesday to its lowest close this year.
