A man walks past a sign board of Japanese auto parts maker Takata Corp's Annual General Meeting in Tokyo June 26, 2014.© Yuya Shino / Reuters
Takata Corp., the Japanese maker of air bags that have led to millions of car recalls worldwide, will be fined $14,000 (U.S.) for each day it fails to co-operate with a U.S. investigation into the part defect.
Transportation Secretary Anthony Foxx said Friday his agency has requested documents and other data from Takata about its air bags, and the company hasn't fully complied. The fines could reach a maximum of $70-million based on U.S. law.
Regulators are investigating air-bag inflators that may malfunction, deploying with so much force that the part breaks and hurls metal shrapnel at the car's occupants. At least five fatalities in the U.S. and more than 100 injuries have been reported.
"We have a serious defect issue," Foxx said at an event in Richmond, Virginia. "We are working as hard as we can to get all the materials off of our roadways, and the company, Takata, has no reason not to comply."
Foxx also said he would ask Congress to pass a legislative proposal from the White House that would give regulators more power to discipline automotive companies for lapses in safety.
The National Highway Traffic Safety Administration asked Takata to answer questions in separate special orders last year on Oct. 30 and Nov. 18, the agency said in a letter to the Tokyo-based parts maker. Takata has produced more than 2.4 million pages of documents but didn't respond to requests for clarification on the agency's specific questions, according to NHTSA.
Lacking Cooperation
"We have concluded that Takata is neither being forthcoming with the information that it is legally obligated to supply, nor is it being co-operative in aiding NHTSA's ongoing investigation of a potentially serious safety defect," the agency said in a statement.
NHTSA issued similar fines against General Motors Co. last year for failing to respond to requests for information about an investigation into an ignition-switch defect. GM eventually agreed to a consent order ending the fines and the agency's investigation, promising to submit to added oversight as it overhauled its defect investigation practices.
Takata had been in a dispute with the agency over whether to initiate a national recall for some of the defective air bags. The company had said the defect was tied to high humidity, and it supported recalls limited to southern states with tropical weather.
Since then, all the automakers with cars that have Takata inflators, including Honda Motor Co. and Toyota Motor Corp., have begun national recalls. More than 20 million cars with Takata inflators have been recalled worldwide.
Customer Injuries
Auto makers face fines of $7,000 per day for not abiding by a U.S. law known as the Transportation Recall Enhancement, Accountability and Documentation Act, which requires the companies to tell regulators about customer injuries, lawsuits, warranty claims and complaints.
The maximum civil penalty is capped by Congress at $35-million. Because NHTSA issued two special orders to Takata, the company faces a combined fine of $14,000 per day up to a final maximum penalty of $70-million.
Takata has pledged in public to co-operate with NHTSA's investigation, but it hasn't lived up to that pledge behind the scenes, Foxx said. The millions of pages of documents without responses to specific questions amounted to a "dump" that wasn't helping the investigation, he said.
"We are using the maximum available penalty until Takata finds itself in compliance. We will not tolerate this," Foxx said.