Embattled airbag-maker Takata is reportedly nearing a deal that would see the company plead guilty in the US to criminal wrongdoing and settle for $1 billon.
Several sources, including the Financial Times, Automotive News and Yahoo, are saying the settlement with the US Justice Department will come down today, and include a criminal fine of $25 million, $125 million to compensate victims (16 deaths have been reported worldwide, as well as some 200 unconfirmed injuries in the US alone), and $850 million as compensation to automakers, who have been recalling vehicles as part of staggered rollout (oldest cars first, and then every year as new replacement components become available) to replace the faulty Takata airbag modules.
As part of the year-after-year recall of newer vehicles, Ford recently expanded its recall to add another 816,309 vehicles worldwide (including 161,174 in Canada and 654,695 in the United States), and Honda (the hardest hit of manufacturers globally) added 772,000 vehicles to the recall.
Nearly all the deaths have occurred in Honda vehicles, and Honda and Takata have settled nearly all the lawsuits arising from the deaths.
Initially discovered in April 2013, affecting six manufacturers, the number of recalled vehicles has topped 42 million vehicles worldwide (and 65 million front airbag modules, which is not quite double the number of vehicles because some early installations didn’t include passenger side airbags). So far, an estimated 12.5 million airbag modules have been repaired.
Faulty inflators could be compromised by moisture in more humid regions, causing them to explode and spray shrapnel through the cabin when an airbag deploys as a result of a front crash.
Takata had previously settled with US safety regulators in 2015, reportedly admitting to providing the US National Highway Traffic Safety Administration (NHTSA) with “selective, incomplete or inaccurate data.” It also admitted to knowing about the defect but not initiating a timely recall action.
As part of the settlement, Takata may end up with an independent monitor, which might help it secure investment to stay in business while dealing with its fiscal responsibilities. If the company does go bankrupt, creditors would end up having to foot the bill for criminal fines, according to US Senators Richard Blumenthal of Connecticut and Edward Markey of Massachusetts, says a Yahoo Financial report.