Guilty Plea, $1 Billion Penalty Expected In Deadly Takata Airbag Debacle

Image courtesy of I Am Rob

When it rains criminal settlements it apparently pours: auto parts maker Takata will reportedly plead guilty to criminal wrongdoing in the handling of its years-long shrapnel-shooting airbag defect debacle by the end of the week. 

The Wall Street Journal, citing sources close to the matter, reports that Takata is expected to plead guilty to criminal misconduct and pay $1 billion to put the defect scandal behind it.

The proposed settlement, which is expected to be announced Friday, would resolve the Department of Justice’s investigation into Takata’s handling of the massive recall affecting more than 42 million vehicles from 19 automakers.

Of the settlement, the company is reportedly set to pay $25 million in criminal penalties and $850 million in restitution to automakers who purchase the defective airbags, the sources say.

Additionally, after saying it wouldn’t create a compensation fund for those affected by the recall, the settlement includes a stipulation that Takata set aside $125 million to go toward victims and families of victims.

Eleven deaths and hundreds of injuries have been connected to the defective airbags.

The inflators are the explosive device that allows the airbag to inflate in a fraction of a second. In Takata’s airbag defect case, the chemical in the inflators can become unstable when exposed to humid or wet conditions. These factors, coupled with poor inflator cannister construction, can cause pieces of the inflator to shoot at passengers with enough force to cause injuries or even death.

Takata announced in Nov. 2015 that it was subject to a criminal investigation over the defective airbags.

At the time, a federal grand jury in U.S. District Court for Southern District of New York has subpoenaed Takata’s U.S. unit to produce documents related to the deadly airbag defect.