Takata Pleads Guilty Over Defective Airbag Charges

Mar 01, 2017, 00:13

Japanese auto supplier Takata, one of the world's largest automotive suppliers, pleaded guilty Monday as a corporation in federal court, agreed to a $1 billion plea deal and told a federal judge its behavior over a 15-year period was "deeply inappropriate".

Takata Corp.'s chief financial officer Yoichiro Nomura leaves federal court in Detroit on Monday.

Separately, three former executives are charged with falsifying test reports - they remain in Japan. Lawyers acknowledged in court that the company will have to be sold to fund the agreement.

The Takata inflators are blamed for 16 deaths worldwide. "And no surprise that Takata followed the lead of General Motors and Volkswagen in hiring attorney Kenneth Feinberg to oversee its compensation fund". If exposed to sustained high temperatures and humidity, the chemical can deteriorate and burn too quickly. One of those is that some automakers still assemble cars with airbag inflators from Takata that are not desiccated, which means they will have to be replaced in a few years through a recall campaign.

Leading auto manufacturers, including BMW and Nissan, equipped their cars with Takata airbags despite knowing they were risky, according to legal filings reviewed Tuesday by AFP.

"Automotive defendants had independent knowledge ... that Takata's airbags were not safe well before installing them in millions of vehicles", said a filing from plaintiffs attorneys at Podhurst Orseck, a law firm, according to an Industry Week report. By placing blame for the airbags exclusively on Takata, the settlement makes it harder for lawyers to sue automakers for damages.

"The automotive defendants were aware that rupture after rupture, both during testing and in the field, confirmed how risky and defective Takata's air bags were", the lawsuit argues. The plaintiffs' lawyers alleged Nissan, for instance, switched to Takata air-bag inflaters to save $4 on each device.

Toyota's quality concerns regarding Takata in 2003, when an inflator exploded in a testing facility.

The allegations against Honda, Toyota, Nissan, Ford and BMW were made in a court filing Monday in Miami.

"The conduct leading to today's plea was completely unacceptable", Nomura said.

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