Massive Takata Airbag Recall Results in $1B US Settlement
Takata is paying a heavy price for its faulty airbag inflators.
The issue has resulted in millions of cars being recalled worldwide and is currently linked to 16 deaths. The company is expected to plead guilty to criminal wrongdoing as part of a $1 billion settlement with the U.S. Justice Department. That hefty sum includes a $25 million criminal fine, $125 million in victim compensation and $850 million to compensate automakers who have suffered losses from the massive recalls.
In the problematic airbags, the inflator can detonate with too much force, shooting metal shrapnel at the occupants of the car.
SEE ALSO: Honda, Acura Add 772K More Vehicles to Takata Airbag Recall
The settlement will also result in an independent monitor of Takata, which could help the company win financial backing from an investor to help Takata restructure and pay for massive liabilities as a result of the airbag recall.
It is expected that Takata will plead guilty to wire fraud, or providing false test data to U.S. regulators. This isn’t the first settlement with U.S. auto safety regulators for Takata. In 2015, the company reached a separate $70 million settlement and admitted it was aware of a defect in its airbag inflators and did not issue a timely recall.
The Justice Department is considering Ken Feinberg to oversee the Takata settlement funds. Feinberg was in charge of handling GM’s compensation fund from the American automaker’s ignition switch recall.
[Source: Automotive News]
Jason Siu began his career in automotive journalism in 2003 with Modified Magazine, a property previously held by VerticalScope. As the West Coast Editor, he played a pivotal role while also extending his expertise to Modified Luxury & Exotics and Modified Mustangs. Beyond his editorial work, Jason authored two notable Cartech books. His tenure at AutoGuide.com saw him immersed in the daily news cycle, yet his passion for hands-on evaluation led him to focus on testing and product reviews, offering well-rounded recommendations to AutoGuide readers. Currently, as the Content Director for VerticalScope, Jason spearheads the content strategy for an array of online publications, a role that has him at the helm of ensuring quality and consistency across the board.
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