Japan’s Takata pleads guilty, to pay $1 bn in airbag scandal with US
Japan’s Takata Corporation, one of the world’s biggest suppliers of auto safety equipment, agreed to plead guilty to fraud and pay $1 billion to settle its faulty airbag scandal, US officials announced Friday.
The United States also has indicted three former Takata executives in the case, bringing the first criminal charges in a scandal over exploding airbags that caused the largest US auto safety recall.
The individuals, who left the company in 2015, were charged with fraud for hiding the flaws in the airbags, so far blamed for 16 deaths and 100 injuries worldwide, according to documents filed in federal court in Michigan and made public on Friday.
Coming just days after the US charged six Volkswagen executives in that company’s “dieselgate” emissions-cheating scandal, the Takata settlement accelerates the pace of corporate prosecutions in the final days of President Barack Obama’s administration.
Takata CEO Shigehisa Takada said his company had taken “aggressive action” to remedy the situation.
– ‘Deeply regrets’ –
“Takata deeply regrets the circumstances that have led to this situation and remains fully committed to being part of the solution,” he said in a statement.
The company has been ensnared since 2013 in a scandal over airbags blamed for exploding with deadly force, sending metal shards into passenger compartments.
Most major auto manufacturers have been forced to recall vehicles because of the defect, including General Motors, Honda, BMW and Tesla, in what has been described as the largest-ever auto safety recall.
Under the terms of the agreement with the US Justice Department, which has yet to be approved by a judge, Takata will pay a $25 million fine, establish a $125 million fund to compensate victims and pay $850 million in restitution to affected automakers.
In an indictment handed down on December 7, but kept secret, the government charged the three executives who all had worked at Takata facilities in Japan and the United States.
They were identified as Shinichi Tanaka, who was executive vice president for global inflator operations; Hideo Nakajima, who was head of engineering at the company’s automotive systems labs; and Tsuneo Chikaraishi, who was chief of the airbag inflator operations department for Asia.
– ‘Manipulated data’ –
Barbara McQuade, the US Attorney for the Eastern District of Michigan, told reporters on Friday she believed the three were in Japan and said the US would work to win their extradition to face trial in the United States.
“The three Takata executives routinely discussed in email messages the to need to falsify reports to their customers,” McQuade said.
“They falsified and manipulated data because they wanted to make profits on their airbags knowing that they were creating a risk for the end user. The risk that they allowed to happen is really reprehensible.”
Some 100 million Takata airbags have been recalled worldwide over a defect that can send metal and plastic shrapnel hurtling from the inflator canister toward drivers and passengers when an airbag is deployed.
A Texas teenager died in March after a Takata airbag in her Honda Civic ruptured in a crash, sending a metal fragment into the side of her neck, according to media reports. A pregnant Malaysian woman suffered a similar fate in 2014.
US regulators have said the problem is more dangerous in southern parts of the United States with warmer and more humid climates.
In November 2015, the US National Highway Traffic Safety Administration imposed a record $200 million civil fine against Takata for providing inadequate and inaccurate information to regulators about the defect.
General Motors in 2015 settled with US authorities for $900 million over faulty ignition switches which could shut off during operation and were linked to more than 100 deaths. No executives were prosecuted in that matter.
McQuade hesitated to compare the cases but said the Takata case involved documentary evidence of fraud.