Airbag recalls


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Car makers settle Takata lawsuit

Four car makers have agreed to an $800 million settlement to address claims filed in relation to defective Takata airbag inflators, according to court documents filed overnight.

Toyota will cover $403 million of the settlement, followed by BMW at $190 million, Mazda at $110 million and Subaru at $98 million, Reuters reports.

Lawsuits against other leading car makers Honda, Ford and Nissan are yet to be settled.

The four car makers – Toyota, BMW, Mazda and Subaru – said in a joint statement that they settled “given the size, scope and severity of the Takata recall,” but none have admitted fault.

At least 16 deaths and 180 injuries worldwide have been linked to the faulty airbag inflators, which can explode with excessive force and unleash shrapnel inside the cabin of the car. In most instances, the airbags ruptured in humid, high temperatures, and no incidents have been reported in New Zealand.

Reports of the incident led to the largest automotive recall worldwide, affecting 100 million vehicles.

In January, Takata pleaded guilty to criminal charges and paid out a $1.4 billion settlement. Searches for a buyer have stretched on for over a year, and last month, the company reported it was considering bankruptcy.

This latest settlement includes contacting owners who still have the faulty airbags, compensation for economic losses, residual payments, rental cars for some owners, and customer support for repairs.

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Takata pleads guilty to US felony charge

Japanese car-parts manufacturer Takata pleaded guilty to a felony charge on Tuesday in a US federal court as part of a $1.4 billion settlement.

The settlement includes penalties and compensation to both car makers and victims of the faulty inflators. The company’s chief financial officer, Yoichiro Nomura, entered the plea on behalf of the company.

Lawyers representing the victims objected to the ruling. Worldwide, 16 deaths and over 180 injuries have been linked to Takata’s defective airbags.

US district court judge George Steeh approved the settlement, saying car makers were potential victims of Takata’s 15-year efforts to hide evidence of its defective inflators. Takata is still subject to civil litigation from individual lawsuits.

The settlement is expected to rejuvenate stagnated talks to find a buyer for Takata, which have been ongoing for a year.

“Achieving a plea bargain in the United States shows some progress,” SBI Securities senior analyst Koji Endo told Reuters.

Steeh told the court he considered harsher penalties but approved the settlement, as higher fines could push Takata into bankruptcy and further delay efforts to replace faulty inflators still on the roads.  

“Destruction of the corporation would probably have been a fair outcome in this case,” he said.

Lawyers for vehicle owners have sued various car makers, including Honda, Nissan, BMW, Ford, Mazda and Toyota, alleging the manufacturers used the inflators despite knowing they were faulty.

Takata agreed to establish two restitution funds in January – $1.19 billion to compensate car makers for the extensive recalls, and $173 million for injured drivers.

Recalls are expected to continue until 2020.

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