Takata to Pay $1 Billion in Airbag Settlement, Three Execs Indicted

Takata will pay $1 billion in a settlement with the U.S. Justice Department over airbag ruptures, Reuters reported today. As part of the settlement, Takata is expected to plead guilty to wire fraud.

Citing sources familiar with the matter, Reuters says that details of the settlement will be announced as early as today. The $1 billion payout will go toward three different fines:  $125 million to compensate victims, $25 million in criminal fees, and $850 to pay back automakers that have issued recalls to fix the airbags. U.S. officials have also ordered that an independent monitor look after the company to make sure it complies with regulations.

Meanwhile, three former Takata executives have been indicted for their alleged roles in the airbag scandal. Longtime executives Shinichi Tanaka, Hideo Nakajima, and Tsuneo Chikaraishi have been indicted for convincing automakers to buy “dangerous” inflators through false statements. Takata officials knew back in 2000 that the inflators were faulty, the indictment says.

Takata already admitted wrongdoing back in 2015. In a $70 million settlement with the National Highway Traffic Safety Administration, Takata said it provided the regulatory agency and other automakers with selective, incomplete, or inaccurate data. Takata also said it failed to recall the affected vehicles in a timely manner.

Airbag inflators from Takata may rupture with excessive force and spew metal shards throughout the cabin of a vehicle. The issue has been linked to 16 deaths around the world, including 11 in the U.S. Eventually, automakers will end up recalling a total of 42 million vehicles in the U.S. for faulty inflators, safety regulators estimate.

Takata is still looking for a financial backer that can help shoulder the burden of its liabilities. If it files for bankruptcy, the new financial backer would be responsible for paying for the company’s criminal penalties, officials say.

Source: Reuters

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