Takata faces up to $200M US in fines over defective airbags

Takata Corp. is facing a record penalty of $200 million US for the way it handled recalls of millions of airbag inflators.

In a news conference Tuesday, the U.S. National Highway Traffic Safety Administration announced a fine of $70 million for Takata's reluctance to recall its inflators.

Takata will face a fine of another $130 million if it doesn't meet the terms of a five-year agreement to complete recalls and upgrade its own safety systems.

That makes it the largest civil penalty in NHTSA history.

• Takata airbag recall involves millions of vehicles in Canada
• Takata faces 3 Canadian lawsuits over faulty airbags

"For years, Takata has built and sold defective products, refused to acknowledge the defect, and failed to provide full information to NHTSA, its customers, or the public," U.S. Transportation Secretary Anthony Foxxsaid.

Takata's airbag inflators can spew shrapnel into drivers andpassengers in a crash and are responsible for eight deaths and morethan 100 injuries worldwide, the NHTSA said.

Although there were reports of deaths linked to exploding airbags for years, Takata remained reluctant to recall the products. Even last year, its recall campaign only covered southern U.S. states where high humidity was believed to be a factor in the deterioration of the airbags.

The NHTSAmoved in May to order the company to recall all affected vehicles.

About 1.5 million vehicles from 12different automakers in Canada were affected by the recalls of Takata airbags. Canada has nolegislation that would force a recall, though automakershave said they will extend their recalls to Canadian-owned vehicles.

Transport Canada says there have been no reports of the airbags malfunctioning in Canada.

Deadlines in recall

The NHTSA is for the first time taking over the recall process, accelerating it for higher-risk groups. The process is to beginnext March and be finished by 2019.

Older vehicles sold in humid regions will be the first to be recalled, especially if they have Takata airbags in both drivers' and passenger positions.

Each vehicle manufacturer must provide theNHTSAwitha recall plan within 90 days.An independent monitor will oversee everything.

The safety regulator has demanded all inflators made with ammonium nitrate be recalled, which will again expand the recall process, potentially by millions of cars. The NHTSA did not know how many might be affected.

Phases out problem inflator

"It's up to Takata to show that ammonium nitrate propellant is safe," Foxx said, adding that it will no longer permit use of this technology.

Takata has admitted to the regulator that it failed to notify theNHTSA of a defect within the required five-day period and failed to comply with two investigative orders on its products.

Among the Takata fines:

• $70 million due in cash immediately.
• $60 million if it fails to meet the NHTSA timeline for recalling its inflators.
• $70 million if the regulator finds other safety violations.