Takata to Pay $1B for Airbag Scandal

Washington, DCTakata will pay $1 billion to the US government for concealing information regarding its defective airbags. Additionally, three Takata executive are facing criminal charges brought by federal prosecutors over the airbag scandal. The Takata airbag recalls are the largest automotive recalls in US history and are the cause of several deaths.

The Justice Department announced today that Takata would plead guilty to one count of fraud and pay $25 million to settle the criminal charge. Additionally, the airbag manufacturer will pay $850 million to automakers and $125 million to those injured as a result of the defect, according to a plea agreement.

The three Japanese Takata executives, Shinichi Tanaka, Hideo Nakajima and Tsuneo Chikaraishi, were indicted on charges connected with deceiving automobile companies about known defects in order to continue selling products they knew failed safety tests.

According to a report by CNN, engineers at Takata first noticed problems with the chemical mix used in its airbags over a decade ago. The problem has to do with aspirin-sized Ammonium nitrate tablets that are put in a metal canister inside the airbag, and are designed to produce a gas that inflates the bag. However, extreme temperature can destabilize the ammonium nitrate causing the metal canister to explode, according to patent application documents filed by Takata.

When faulty Takata air bags rupture or explode, they propel shrapnel into the vehicle. The defect has been tied to 11 deaths and more than 180 injuries in the United States, according to the National Highway Traffic Safety Administration. NHTSA has recalled more than 64 million air bags, installed in 42 million vehicles made by just about every brand on the market.

Since at least 2000, Tanaka, Nakajima and Chikaraishi allegedly schemed to hide the fact that at least some of the devices that inflate Takata’s air bags did not perform as promised, court documents state. The three men and others at the company deleted unfavorable data and manipulated other information, then signed off on the falsified records as proof to automakers that the air bags met safety standards, according to the documents.

The three Takata executives allegedly continued to hide safety and test information even as the air bags began to fail on the roads, court documents state.

In a report by the Washington Post, all three executives were longtime employees of Takata until their departure in 2015. Their roles involved regular communication about the design, production and testing of air-bag inflaters. They face six counts, including wire fraud and conspiracy to commit wire fraud.

The Takata airbag recalls began in 2008 with a small number of Honda vehicles. The agency expanded recalls to cover more automakers and regions in 2014, and then broadened the order to all parts of the country in 2015. Additional Takata recalls were made this week, involving Ford and Honda.