The US Department of Transport’s National Highway Traffic Safety Administration (NHTSA) has issued a massive USD$200 million fine to Takata Corp for defective airbag inflators that violated the country’s Motor Vehicle Safety Act. The fine is the largest ever issued in the NHTSA’s history, and is just one of the requirements of the Consent Order issued by the safety regulators to Takata.

Within the Consent Order, the USD$200 million fine will be comprised of two parts – USD$70 million that is payable in cash, plus an additional USD$130 million that would be required to be paid if Takata is unable to meet its obligations. Takata would also be mandated to pay the larger proportion of the fine if additional violations of the Safety Act are uncovered.

In an official statement, Transportation Secretary Anthony Foxx said, “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. The result of that delay and denial has harmed scores of consumers and caused the largest, most complex safety recall in history. Today’s actions represent aggressive use of NHTSA’s authority to clean up these problems and protect public safety.”

As part of NHTSA’s Consent Order to Takata, the company has admitted that it was aware of a defect but failed to issue a timely recall. The NHTSA also issued findings that Takata provided it with selective, incomplete, or inaccurate data dating back to at least 2009. Investigations revealed that Takata also provided its customers with selective, incomplete, or inaccurate data.

Honda airbag

The Consent Order also requires the company to phase out the production and sale of inflators that use phase-stabilised ammonium nitrate propellant. Takata is also required to schedule a recall for all Takata ammonium nitrate inflators currently installed in vehicles, unless the company can prove they are safe, or can verify why its inflators are prone to rupture.

As a recap, ammonium nitrate is used in the composition of Takata’s airbag propellant. When subjected to moisture and heat, the propellant can be rendered unstable, and can cause the airbag inflators to explode with excessive force, spraying metal shrapnel inside the car. Several cases, some involving death, resulted in worldwide recalls being issued, including in Malaysia.

Other airbag producers like TRW and Autoliv utilise guanidine nitrate as an alternative explosive compound to ammonium nitrate when producing the airbag propellant. The chemical is considered to be less vulnerable to heat and moisture compared to ammonium nitrate. Takata has already begun producing alternative propellants using guanidine nitrate within the last two years.


The order also requires Takata to be placed under strict observation by an independent monitor selected by the NHTSA for the next five years. The monitor will assess, track, and report the company’s compliance with the phase-out schedule and other requirements of the Consent Order, and to oversee the Coordinated Remedy Program.

“Today, we are holding Takata responsible for its failures, and we are taking strong action to protect the traveling public. We are accelerating Takata recalls to get safe air bags into American vehicles more quickly, ensuring that consumers at the greatest risk are protected, and addressing the long-term risk of Takata’s use of a suspect propellant,” said NHTSA Administrator Mark Rosekind.

According to the Wall Street Journal, Honda has announced that it would no longer use airbag inflators made by Takata. The no-confidence move from Takata’s largest customer comes directly after Takata received the aforementioned Consent Order from the NHTSA. Reuters reports that Toyota is currently looking for alternatives to Takata, including Autoliv and Nippon Kayaku Co.