Japanese company fined $70 million over exploding air bags - CBS News 8 - San Diego, CA News Station - KFMB Channel 8

Japanese company fined $70 million over exploding air bags

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In this Oct. 22, 2014 file photo, the Takata building, an automotive parts supplier in Auburn Hills, Mich. is seen on Wednesday, Oct. 22, 2014. The company is the North American subsidiary of the Japanese based Takata Corporation, which supplies seat belt In this Oct. 22, 2014 file photo, the Takata building, an automotive parts supplier in Auburn Hills, Mich. is seen on Wednesday, Oct. 22, 2014. The company is the North American subsidiary of the Japanese based Takata Corporation, which supplies seat belt

DETROIT (AP) — U.S. auto safety regulators fined Japan's Takata Corp. $70 million Tuesday for failing to promptly recall millions of explosion-prone air bags blamed for eight deaths and more than 100 injuries worldwide.

The government also ordered Takata to stop making the inflators at the heart of the problem unless the company can prove they are safe, and set a schedule over the next two years for replacing many of the devices already in use. Takata may eventually have to recall all its inflators.

The company admitted that it knew for years that the inflators were defective but failed to recall them in a timely manner.

"Delay, misdirection and refusal to acknowledge the truth allowed a serious problem to become a massive crisis," Transportation Secretary Anthony Foxx said.

Under the five-year agreement with the air bag maker, the National Highway Traffic Safety Administration can increase the penalty to a record $200 million if the company fails to abide by the terms. I

The biggest fine ever handed out by NHTSA is the $105 million levied against Fiat Chrysler earlier this year for failing to report safety problems and follow through on 23 recalls.

Takata's air bag inflators can rupture and hurl shrapnel at drivers and passengers in a crash. So far, about 23.4 million driver's-side and passenger-side inflators have been recalled on 19.2 million U.S. vehicles sold by 12 automakers.

NHTSA Administrator Mark Rosekind said Takata's misconduct dates to at least 2009, when it failed to tell the agency about the problem. Automakers are required to notify NHTSA of defects within five days of discovering them.

Regulators said Takata also provided them with "selective, incomplete or inaccurate data" for years.

Honda, the biggest customer for Takata air bags, essentially fired the supplier Tuesday. All of the air bag-related deaths reported so far have been in Honda vehicles.

Takata's air bags are inflated by an explosion of ammonium nitrate, and investigators have found so far that prolonged exposure to airborne moisture can cause the propellant to burn too fast. That can blow apart a metal canister and shoot out fragments.

Most of those injured or killed live in high-humidity states along the Gulf of Mexico. The injuries, mainly to drivers, included severe neck cuts and facial injuries, as well as the loss of eyesight and hearing.

Still, Takata and government investigators have yet to discover the exact cause of the ruptures. With that in mind, the Transportation Department is giving Takata three to four years to prove that all of its inflators are safe or to identify the cause of the ruptures.

"Unless new evidence emerges, the company will have to recall all of its inflators," even those in car brands that have not been implicated up to now, Foxx said. He said he was unsure how many air bags that would amount to.

Sen. Bill Nelson of Florida, where numerous air bag ruptures have been reported, said he is worried that Takata will be able to sell ammonium nitrate inflators until the end of 2018. "We urgently need to redouble efforts to get the recalled vehicles fixed and get the old ammonium nitrate-based inflators out," Nelson said.

The agreement also calls for the appointment of an independent monitor who will make sure Takata abides by its terms.

Takata still faces hundreds of lawsuits and a federal criminal investigation. NHTSA also continues to investigate whether the company's side air bag inflators should also be recalled.

"The penalty seems small compared to the consequences of the concealment and disregard" for the law, complained Sen. Richard Blumenthal, D-Conn., a frequent NHTSA and Takata critic.

___

This story has been corrected to show that Richard Blumenthal is a senator from Connecticut.

Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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