Takata Corp. announced that its U.S. subsidiary TK Holdings Inc. (TKH) has entered into a Consent Order Agreement with the National Highway Traffic Safety Administration (NHTSA). Through ongoing testing efforts, Takata says it is committed to being a part of the solution with regard to the recall of its defective air bag inflators, which have been linked to death and injury. Measures Takata has taken include: inflator replacement, continued cooperation with NHTSA and automakers, and further enhancing its safety procedures.

As part of the Consent Order, TKH has agreed to pay a civil penalty of $70 million in six installments, which must be paid by October 2020. TKH may become liable for additional civil penalties of up to $130 million if it fails to meet certain obligations of the Consent Order.

Takata also has agreed to implement a series of actions, including the phasing out of the manufacture and sale of non-desiccated Phase Stabilized Ammonium Nitrate (PSAN) Takata inflators by the end of 2018. According to a report in the Wall Street Journal, U.S. officials have said the chemical can become destabilized, leading to explosions. Takata also agreed it will not enter into any new contracts to provide PSAN inflators.

Shigehisa Takada, chairman and CEO of Takata, said, “We deeply regret the circumstances that led to this Consent Order. This settlement is an important step forward for Takata that will enable us to focus on rebuilding the trust of automakers, regulators and the driving public. Today’s announcement also marks a pivot point for Takata by setting out an orderly transition to the next generation of inflators. We will comply with all aspects of the settlement and are committed to being part of the solution.”