The Takata Consent Order – Here's What You Need to Know

01 June 2015 Dashboard Insights Blog

As is well known by now, TK Holdings Inc. – Takata – has entered a Consent Order with the National Highway Traffic Safety Administration (“NHTSA”). The details and latest information on the Takata recall can be found online through NTHSA. While the news has focused on the expansion of the recall, and mentioned the Consent Order, major news outlets have not gotten into the nitty-gritty of the document itself. So, what does the Consent Order actually say? What did Takata and NHTSA actually agree to? We are glad you asked.

Takata agrees by consent (of course) to a host of obligations. These include cooperating with NHTSA (Par. 4). That cooperation is extensive and specific. For example, Takata will agree to “testing reasonably directed by NHTSA…” This is in addition to agreeing to coordinate the recall and remedy programs, prioritizing same and related issues with the remedy. Some items of further cooperation expressly set forth include (Par. 7):

  • “Upon receipt of additional Defect Information Reports submitted by a vehicle manufacturer …. Takata shall meet with NHTSA, in an expedited manner and not less than five business days following NHTSA’s receipt of the DIR, to discuss all issues related to the subject matter of that DIR….”
  • “Takata shall use its reasonable best efforts to continue to respond truthfully, completely, and in a timely fashion to all ongoing and future NHTSA requests for information, whether served via formal process or otherwise….”
  • “Takata shall continue to provide to NHTSA on an ongoing and requested basis all test results and data relating to the Takata Inflators….”

Within 60 days of the Consent Order, July 17, 2015, Takata shall submit a plan to NTHSA outlining additional steps that Takata intends to take. This plan must include at least two components:

  • “After consulting with the relevant vehicle manufacturers, Takata shall propose a plan that, to the extent reasonably possible, maximizes recall completion rates for all recalls involving Takata frontal air bag inflators. This component of the plan shall specify the steps that Takata will take to assist the vehicle manufacturers in customer outreach, whether by engaging with vehicle owners through new and traditional media, direct contacts with vehicle owners, and other innovative means of bringing consumer attention to this safety issue. Takata will prepare the plan described above as it relates to each of the affected vehicle manufacturers without regard to the supplier of the remedy parts.”
  • “Takata will also propose a plan to provide NHTSA with test data NHTSA deems sufficient or other information regarding the service life and safety of the remedy inflators currently being manufactured by Takata”

And what of NHTSA? What does the government consent to? First, NHTSA agreed not to seek any civil penalties beyond those applicable before May 18, 2015. Second, NHTSA agreed to keep its investigation open until NHTSA, “in its sole discretion and determination” decides that all the issues related to the Takata Inflators have been resolved.

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