Airbag-Supplier Takata Pleads Guilty To Fraud In US Federal Court

February 28, 2017 2:55 pm

On Monday, automotive supplier Takata pleaded guilty to fraud in a US federal court, accepting a $1-billion settlement with the United States government. The Detroit Free Press reports that the figure includes a $25-million criminal fine, a $125-million fund to compensate victims of its potentially-defective airbags, and a sum of $850 million to be paid to automakers for the expenses they’ve incurred recalling Takata airbags.

Federal sentencing guidelines would reportedly have allowed US District Judge George Caram Steeh to impose $770 million to $1.54 billion in criminal fines alone, but Steeh felt such hefty fines would have enriched the US Treasury while impairing Takata’s ability to compensate the wronged parties. As it stands, the company will only be able to afford the $1-billion settlement with the proceeds from a sale to another manufacturer.

Takata’s airbags first came under suspicion back in 2013, when millions of vehicles were recalled for containing possibly-defective airbag inflators that could rupture and send debris throughout the vehicle’s cabin in the event of a crash. The issue has been linked to the inflators’ unique propellant, ammonium nitrate, which becomes volatile over time as it is exposed to moisture. Tens of millions more vehicles were roped into the recall in the past few years, and today, the company is responsible for the single largest automotive safety recall in history.

Takata Chief Financial Officer Yoichiro Nomura said Monday that “the conduct leading to today’s plea was completely unacceptable. I would like to sincerely apologize on behalf of Takata. The actions of certain Takata employees to undermine the integrity of the company’s testing data and reporting to customers were deeply inappropriate.”

Nomura admitted that some employees within the organization knew of the potential problems relating to its airbag inflators as early as 2000, and manipulated the test data given to automakers so that they would be inclined to select Takata airbags over competing suppliers.

As of January 12^th, 2017, the number of Ford, Lincoln, and Mercury vehicles affected by the safety recall was some 816k in North America. The affected models are:

2005-’09 and 2012 Ford Mustang
2005-’06 Ford GT
2006-’09 and 2012 Ford Fusion
2007-’09 Ford Ranger
2007-’09 Ford Edge
2006-’09 and 2012 Lincoln Zephyr and Lincoln MKZ
2007-’09 Lincoln MKX
2006-’09 Mercury Milan

By Aaron Brzozowski

Aaron Brzozowski is a writer and motoring enthusiast from Detroit with an affinity for '80s German steel. He is not active on the Twitter these days, but you may send him a courier pigeon.