The US Justice Department announced on January 13 that safety-equipment supplier Takata will plead guilty to criminal misconduct and pay $1.4 billion in penalties. Takata’s defective airbags were linked to at least 16 deaths and over 180 injuries worldwide. The Wall Street Journal reported that Takata is expected to agree to come up with the settlement either within a year or when it secures a financial backer.
Three executives, Shinichi Tanaka, Hideo Nakajima and Tsuneo Chikaraishi, have also been charged with fabricating test data to hide a fatal airbag defect, according to Reuters. It was revealed that the Takata executives knew as early as 2000 that the airbag inflators were explosive under certain conditions. “For more than a decade, Takata repeatedly and systematically falsified critical test data related to the safety of its products, putting profits and production schedules ahead of safety,” said Andrew Weissmann, head of the Justice Department’s fraud section.
Shares in Takata rose 17 per cent (once news of the settlement had become public), closing on Friday at 707 yen, or $(US)6.12. Reuters reported in November that Takata was considering a bankruptcy filing for its US unit while looking for a sponsor to cover liabilities for the faulty airbags. Several companies have expressed interest, according to the Nikkei Review, although an announcement has yet to be made. Recall liabilities are expected to top $14 billion.
Recalls for faulty airbags began in 2013, with 3.4 million cars initially affected, and has rapidly expanded. Over 100 million vehicles were recalled worldwide across over a dozen car manufacturers, including Honda, Toyota and BMW. A Fair Go investigation found over 300,000 cars were affected in New Zealand, with many faulty airbags still to be replaced.