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.
Takata pleads guilty in airbag debacle, will pay $1 billion fine
Takata will pay $1 billion in criminal penalties related to its exploding airbag scandal, the Department of Justice announced. The company has agreed to plead guilty to charges of wire fraud, in which the government alleged that Takata falsified safety data for its airbags. Additionally, three executives were indicated on charges of wire fraud and conspiracy. Takata has been under intense scrutiny in light of the faulty airbags, which can explode and cause fatal injuries to vehicle occupants.
The DOJ announced the settlement in a Jan. 13, 2017 press release, which says that Takata will pay a total of $1 billion in criminal penalties. Takata was found to act fraudulently regarding sales of its defective airbag inflators, the cause of the exploding airbags. Three Takata executives were also charged with falsifying safety data to obscure a deadly airbag defect.
Takata is pleading guilty to wire fraud. The $1 billion criminal penalty consists of $975 million in restitution and a $25 million fine. Among the funds allocated for restitution, $125 million is being set aside for individuals who were injured due to the Takata exploding airbag issue who have not already reached a settlement, and $850 million is for airbag recall and replacement costs incurred by automakers who unknowingly installed the defective airbag inflators.
Auto recalls affect both auto companies and auto parts manufacturers. Vehicles made by 19 different automakers have been recalled to replace airbags, made by Takata, in what is being called as the largest auto recall in history. Some of those airbags deployed explosively, injuring or even killing car occupants. Takata faces risk of bankruptcy for the air bag recalls. In January 2017, Takata pleaded guilty in the US; the criminal penalty alone is $1 billion. 2ff7e9595c
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