Car News

Takata to Pay US $1 Billion in Criminal Penalties for Defective Airbags

It seems like every week more Takata airbags are recalled. There are now more than 40 million cars, trucks, and even motorcycles worldwide that are affected. Now the US Department of Justice has settled a plea bargain with the beleaguered manufacturer that sees massive criminal penalties and three executives indicted on charges.

Just this week the department announced record penalties against Volkswagen for their diesel emissions scandal, and they aren't going easy on Takata either. The company is pleading guilty to wire fraud and will pay $1 billion US in criminal penalties. Most of the money ($850 million) will go to automakers to help pay for recall costs. $125 million will be placed into a fund for individuals injured by the defective airbags.

US Attorney for Michigan Barbara McQuade made the announcement today saying that "automotive suppliers who sell products that are supposed to protect consumers from injury or death must put safety ahead of profits. If they choose instead to engage in fraud, we will hold accountable the individuals and business entities who are responsible.” With that, executives Shinichi Tanaka, Hideo Nakajima, and Tsuneo Chikaraishi, were charged with conspiracy to commit wire fraud and wire fraud for their alleged actions. The three were longtime Takata executives who left in 2015 after the recall started.

Court documents state that Takata has acknowledged that since at least 2000 they were aware that the ammonium-nitrate inflators were not performing to automaker specifications. The manufacturer submitted fraudulent and false reports in order to conceal this information and continue sales.