Takata To Pay $1 Billion Over Air Bag Fraud; 3 Executives Criminally Charged
The Japanese air bag manufacturer Takata has reached a $1 billion settlement with the U.S. Justice Department over a deadly defect in its air bags that led to a massive recall.
At least 16 deaths, 11 of them in the U.S., have been linked to the defect.
As part of the deal, which still needs to be approved by a judge, Takata agreed to plead guilty to the felony offense of wire fraud. Of the $1 billion total, $25 million will be paid as a fine to the U.S. government and $125 million will be used for restitution to people who are physically injured by the air bags. The remaining money will go to automakers that were defrauded by Takata, to cover the cost of replacing recalled parts.
Three high-level executives at the company were also indicted on wire fraud and conspiracy charges, U.S. Attorney Barbara McQuade said at a news conference Friday in Detroit to announce the settlement.
The three Japanese executives, Shinichi Tanaka, Hideo Nakajima and Tsuneo Chikaraishi, allegedly concealed deadly defects in the inflator inside the company's air bags. In emails, they allegedly referred to submitting false reports of test data to automakers that were using their products, even after initial news reports that the inflators were failing and injuring people.
The inflator contains ammonium nitrate, which can degrade — either over time or because of temperature fluctuations — putting the metal canister at risk for rupturing and sending shrapnel into the vehicle, McQuade explained.
"Corporations and individuals who cheat will be held accountable," McQuade said. "Cheaters will not be allowed to gain an advantage over those who play by the rules."
As NPR's Sonari Glinton has reported, "automakers are allowed to sell the vehicles with the inflators under an existing order by NHTSA. But all of the vehicles using the air bags must be recalled by the end of 2018."
The National Highway Traffic Safety Administration has called it "the largest and most complex auto safety recall in U.S. history."
A congressional report released last summer found that despite the recall, at least four automakers — Fiat Chrysler, Mitsubishi, Toyota and Volkswagen — were still using the type of Takata air bags responsible for the injuries and fatalities.
In addition, NHTSA says the following vehicles have inflators at the highest risk of rupturing dangerously:
The Department of Transportation has asked drivers to check the website to determine whether their vehicles are affected.
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