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.