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Takata to Plead Guilty, Pay $1B for Airbag Defects

Topics: Takata

Takata to Plead Guilty, Pay $1B for Airbag Defects

VOA News
13 January 2017 (4:24PM)

Japan's Takata Corporation has agreed to plead guilty of criminal wrongdoing and pay $1 billion in fines for concealing a defect in its airbags that caused the largest auto safety recall in the United States.

The U.S. attorney's office in Detroit, Michigan, announced the plea deal Friday, the same day it also revealed a grand jury indictment of three former Takata executives.

The settlement requires Takata to pay a $25 million criminal fine, $125 million to individuals who were injured by the faulty airbags, and $850 million to compensate automakers for the massive recall costs.

The company also will be required to make reforms and to be overseen by an independent monitor for three years.

The Justice Department accused Takata of submitting false test reports to automakers to conceal problems with their air bag inflators. The inflators were found to explode under high force, spewing shrapnel into automobiles.

The faulty inflators led to 16 deaths worldwide, 11 of them in the United States. More than 180 other people were injured by the airbags.

WATCH: Prosecutor Announces Takata $1B Settlement for Manipulating Airbag Data

Download Prosecutor Announces Takata $1B Settlement for Manipulating Airbag Data in MP4 format - 4:21PM - 21.5MB - 1:01
U.S. Attorney Barbara L. McQuade announces automotive parts company Takata’s agreement to a $1 billion settlement for manipulating test data to hide airbag defects from customers.

U.S. officials said the recalls eventually would affect more than 40 million U.S. vehicles.

All three of the Takata executives who have been charged in the United States live in Japan, and they were suspended by Takata last year. U.S. prosecutors said they would work with Japanese authorities to try to extradite them to the United States to face trial.

Takata is expected to be sold this year to another auto supplier or an investor who will restructure the company. Takata's shares rose in trading in Japan on news of the settlement.