Takata Corp will be fined everyday until the Japanese manufacturer of faulty air bags, which triggered a wave recalls around the globe, co-operates fully with US regulators.
“Safety is a shared responsibility and Takatas failure to fully cooperate with our investigation is unacceptable and will not be tolerated,” said Transportation Secretary Anthony Foxx in a statement on Friday. “For each day that Takata fails to fully cooperate with our demands, we will hit them with another fine.”
Takatas fine was set at $14 000 per day and it may reach up to $70 million under US law. Mr. Foxx accused the company of not co-operating with the investigation by failing to deliver documentation and other materials requested late last year.
US officials are looking into the faulty air-bag inflators, which have proven to be unstable and can deliver lethal damage to the driver and the passengers, have already resulted in six reported deaths and more than 100 injuries.
More than 10 million vehicles have been recalled in the US in relation to the airbags defect and over 25 million around the world.
The National Highway Traffic Safety Administration issued two special orders to Takata, one on October 30 and one on November 18, asking the Japanese airbag maker to comply with its investigation.
Usually, car manufacturers can be fined of up to $7 000 per day if they fail to report customer injuries, lawsuits and complaints to the US watchdog. However, since the NHTSA requested co-operation on two separate occasions, Takata is facing double the penalty.
This is not the first time the US regulator exercises its right to enforce daily fines. Last year the NHTSA penalized General Motors, after the manufacturer failed to provide information related to a faulty ignition-switch.
In a separate statement, regulators requested law makers to vote in favor of a legislation that forces companies that provide car rentals to repair vehicles involved in recalls, before they release them into their operations.
Takata Corp gained 2.09% on Friday and closed at JPY 1 340, marking a one-year decrease of 54.63%. The company is valued at JPY 111.44 billion.
According to the Financial Times, the 3 analysts offering 12-month price targets for Takata have a median target of JPY 1 750, with a high estimate of JPY 2 600 and a low estimate of JPY 1 300. The median estimate represents a 27.92% increase from the last closing price.
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