AUTO INDUSTRY NEWS

Takata pleads guilty to fraud charges, settles for $1B

Takata pleads guilty to fraud charges, settles for $1B image

Anton Andres / Newspress | March 01, 2017 09:00

Takata to compensate automakers and victims for $1 billion

As part of a $1 billion dollar settlement approved by the U.S federal court, Takata Corporation has also pled guilty to fraud charges filed by automakers and victims of the faulty inflator. This guilty plea is part of the settlement which will also compensate for the car manufacturers they supplied and those injured by the said part.

On top of the charges filed at Takata, consumers and defective inflator victims are pushing to press charges at the automakers for fraud as well. Owners of Mazda, Nissan, Ford, Honda, BMW, and Honda cars have sued the manufacturers, as well as owners of other brands.

They claim that the manufacturers knew that Takata airbag inflators were faulty but continued to install them on their vehicles. Lawyers from Florida added that the car manufacturers acted "recklessly (because) they were focused on the low price of Takata’s inflators and concerned that if they stopped using Takata’s inflators, they might not have a sufficient supply."

U.S. District Court Judge George Steeh, the judge responsible for approving the settlement, countered that the car manufacturers could have been victims themselves, adding that they were probably unaware of the explosive inflator. Steeh also said that he was considering imposing the maximum fine of $1.5 billion, as well as a stiffer sentence. The judge decided against it as it would push Takata into bankruptcy and delay the replacement of the airbag inflators and the compensation for victims.

At the moment, Takata has agreed to pay $25 million and have 30 days to pay $125 million for victim compensation. The company has the rest of the year to pay the remaining $850 million for automaker compensation. With this settlement, Takata is now forced to hasten their efforts to search for financial backers. As of now, Takata Corp. has yet to announce the company that will provide financial assistance.