Speeches and Presentations

Remarks: Takata Coordinated Remedy and Enforcement Announcement

Dr. Mark R. Rosekind , NHTSA Administrator

Tuesday, November 3, 2015 | Washington, D.C.

Mark R. Rosekind, Ph.D.
Administrator, National Highway Traffic Safety Administration
U.S. Department of Transportation
Tuesday, November 3, 2015
As Prepared for Delivery

Thank you, Mr. Secretary.

The Secretary just laid out the “why” of NHTSA’s actions today. Now I will give you more detail on “what” and “when.”

Today NHTSA has issued two orders to address the Takata inflator situation. One, the Coordinated Remedy Order, invokes the agency’s authority to accelerate defect remedies under certain conditions. It orders the 12 manufacturers that have issued Takata recalls to complete those recalls on an accelerated schedule and to prioritize vehicles based on risk.

As discussed at NHTSA’s Public Information Meeting two weeks ago, there are a number of factors that affect the risk an inflator will rupture and the risk that a rupture will cause serious injuries. Those factors include the age of the inflator, whether it has been located for extended periods in areas of high absolute humidity, and the position of the inflator – whether it is on the driver or passenger side. There is also an elevated risk in vehicles with both driver and passenger inflators under recall.

The Coordinated Remedy Order assigns the 19 million vehicles under recall into one of four Priority Groups, based on these risk factors. This slide provides an overview of the Priority Groups. Priority Group 1 is highest risk. Priority Groups 3 and 4 are “Lower Risk” and “Lowest Risk” compared to Priority Groups 1 and 2, but these inflators still pose an unreasonable risk to the public. As you can see, there are no green boxes on this chart. To be clear: That means there remains risk of inflator rupture for all four Priority Groups.

The Coordinated Remedy Order also sets timelines by which manufacturers must have sufficient replacement parts available to meet demand for each Priority Group, and deadlines for completion of remedy programs. What’s the schedule? The parts deadline for Priority Group one is March 2016, with sufficient parts required to be available for Priority Groups one through three by December 31, 2016. Remedy completion deadlines begin in 2017 and end in 2019.

It is our best estimate that this schedule accelerates remedy programs, beyond what would have occurred without NHTSA’s action, by roughly two years.

The Coordinated Remedy Order also provides for an independent monitor, who works for NHTSA, to assist our oversight of the remedy programs and manufacturers’ compliance with the Coordinated Remedy Order.

The second order NHTSA is issuing today relates to enforcement. In a Consent Order issued to Takata, the company has acknowledged certain violations of the Motor Vehicle Safety Act, and it has consented to a series of actions designed to address those violations and protect public safety.

NHTSA’s investigation uncovered a pattern by Takata of providing selective, incomplete, or inaccurate information to NHTSA. This behavior dates back at least to the agency’s interactions with Takata in 2009, during the investigation into the timeliness of Honda’s Takata inflator recall decision-making. As an example, Takata made the conscious decision to withhold from the agency information on two driver side ruptures involving inflators that were substantially similar to the driver inflators being recalled by Honda. Takata’s pattern of selective, incomplete, and inaccurate disclosures has continued to other, more recent interactions with the agency, for example, during a meeting in January 2012 about the rupture recalls and Takata’s root cause investigation, and during a vehicle inspection in Puerto Rico in April 2014, among other instances. This behavior has also been pervasive in Takata’s dealings with its customers.

Under the Consent Order, Takata agrees to pay the largest civil penalty in NHTSA’s history, $200 million. It must pay $70 million in cash, and remaining amounts if it violates the terms of NHTSA orders or the Safety Act. In setting this penalty amount, NHTSA considered a number of factors, including the company’s agreement to take actions outlined in the consent order.

Among those actions, Takata agrees to phase out production of new inflators using phase stabilized ammonium nitrate-based propellant. In addition, the order directs Takata to issue recalls for all remaining ammonium nitrate inflators, by a prescribed schedule, unless the company can demonstrate it has identified the root cause of the ruptures or otherwise proven to NHTSA that its inflators are safe. As shown on this slide, there should be closure on such a determination for all un-recalled inflators currently in the market no later than December 31, 2019.

So, in the absence of new information, all of these inflators must eventually be recalled. Any future recalls under this Consent Order will be the subject of risk assessments and prioritizations similar to what I described earlier.

This is a brief summary of written agreements, and I refer you to the fact sheets and the copies of the orders we have provided for fuller detail. All of this material will be available on the special website we have set up.

Let me close with a message for consumers. No one deserves to have an exploding air bag installed in their vehicle. A safety recall is a burden: It takes time and effort from busy lives, it can mean missed time at work or a long drive to a dealer, all to take your car in to repair a defect that never should have occurred. But the risk from these defective inflators to you and your family is significant. That is why NHTSA is taking unprecedented steps to protect you. Please, take action. If you think your vehicle might be affected, go to safercar.gov and enter your Vehicle Identification Number in our VIN lookup tool. If the VIN lookup says you have a recall, or if you receive a recall notice from your manufacturer, please, call your dealer, ask for an appointment, and get the free repair.

Now we will take your questions.

Secretary Anthony Foxx
U.S. Department of Transportation
Tuesday, November 3, 2015
As Prepared for Delivery

Good afternoon.

For too many years now, American drivers – and indeed vehicle owners all over the world – have had to worry about whether their car’s air bags might harm them instead of protect them in a crash.

This fear is unfortunately real because we know that air bag inflators made by a company called Takata are prone to explosive ruptures, sending jagged metal fragments flying into the passenger compartment.

To date, these ruptures are responsible for seven U.S. deaths and nearly 100 injuries

Over the years, in response to questions from safety regulators and its customers, Takata has said it had isolated the problem, said it had uncovered the mistakes that led to the ruptures, and it has pledged that its products are safe.

But the ruptures have continued.

Last June, the Department’s National Highway Traffic Safety Administration opened a formal investigation into Takata’s air bag inflators.

Through that investigation, we have sought evidence from Takata and vehicle manufacturers, examined millions of pages of documents, consulted with independent experts, started our own testing program and examined test results from industry.

This May, we forced Takata to declare a defect and expand its inflator recalls by millions. And we launched a formal, public process for deciding whether, and how, to make unprecedented use of our authority to speed up these recalls.

Today we are laying out the results of the investigation, and they are troubling.

For years, Takata has built and sold defective inflators. It refused to acknowledge that they were defective. It provided incomplete, inaccurate and misleading information to NHTSA, to the companies using its inflators, and to the public.

Those failures put millions of Americans at risk. It’s a mess. And today, DOT is stepping in to clean up the mess.

NHTSA has issued two orders that initiate a series of steps to protect the public.

We’re speeding up these recalls, ordering manufacturers to replace defective inflators months, if not years, earlier than would happen if we took no action, and ordering them to make sure the consumers at greatest risk are protected.

We are addressing concerns about ammonium nitrate, the chemical Takata has used to power its inflators.

We believe this chemical is a factor in these ruptures, and the combination of Takata’s delays and denial, plus unexplained issues with ammonium nitrate inflators not already under recall, leave us without confidence in these products going forward.

So, we are ordering Takata to phase out production of new inflators using ammonium nitrate. And, unless new evidence emerges, the company will have to recall all its ammonium nitrate inflators.

Also, we are holding Takata accountable for its actions. We are imposing the largest civil penalty in NHTSA’s history.

We are imposing additional oversight, including an independent monitor to help oversee the company’s conduct. We are requiring significant changes in the company’s safety practices and culture.

The company is dismissing some employees as a result of our investigation. These steps can’t reverse the harm these inflators have caused, but they make clear that such behavior will not be tolerated.

I want to acknowledge that Takata has committed to taking significant steps to address this crisis, and that automakers have given NHTSA significant cooperation in developing the Coordinated Remedy plan. Industry’s continued cooperation will be essential as DOT works to clean up this problem.

But we should not have to be here. DOT should not have to place itself in the middle of a massive safety recall. Record-setting civil penalties are not something to brag about. And American drivers should not have to worry that a device designed to save their life might take it.

Delay, misdirection, and refusal to acknowledge the truth allowed a serious problem to become a massive crisis. And that has left DOT with no choice but to take unprecedented steps to protect public safety.

I want consumers to know that this Department is committed to using all our authority to protect them. And I hope the auto industry will take notice of the damage this crisis has done – damage to corporate reputations, to corporate bottom lines, and to innocent Americans injured and killed by these inflators.

With that, I’ll hand it over to NHTSA Administrator Rosekind.