Sun, Jan 15, 2017 - Page 16 News List

Takata agrees to pay US fine, compensation


US Attorney Barbara McQuade speaks on Friday during a news conference to announce a federal grand jury indictment of three former Takata Corp executives on charges of criminal wrongdoing, in Detroit, Michigan.

Photo: Reuters

Japan’s Takata Corp, one of the world’s biggest suppliers of auto safety equipment, agreed to plead guilty to fraud and pay US$1 billion to settle its faulty airbag scandal, US officials said on Friday.

The US also indicted three former Takata executives in the case, bringing the first criminal charges in a scandal over exploding airbags that caused the largest US auto safety recall.

The individuals, who left the company in 2015, were charged with fraud for hiding the flaws in the airbags, so far blamed for 16 deaths and 100 injuries worldwide, according to documents filed in federal court in Michigan and made public on Friday.

Coming just days after the US charged six Volkswagen AG executives in that company’s “dieselgate” emissions-cheating scandal, the Takata settlement accelerates the pace of corporate prosecutions in the final days of US President Barack Obama’s administration.

Takata chief executive officer Shigehisa Takada said his company had taken “aggressive action” to remedy the situation.

“Takata deeply regrets the circumstances that have led to this situation and remains fully committed to being part of the solution,” he said in a statement.

The company has been ensnared since 2013 in a scandal over airbags blamed for exploding with deadly force, sending metal shards into passenger compartments. Most major auto manufacturers have been forced to recall vehicles because of the defect, including General Motors Co, Honda Motor Co, BMW AG and Tesla Motors Inc, in what has been described as the largest-ever auto safety recall.

According to the terms of the agreement with the US Department of Justice, which has yet to be approved by a judge, Takata is to pay a US$25 million fine, establish a US$125 million fund to compensate people affected and pay US$850 million in restitution to affected automakers.

In an indictment handed down on Dec. 7 last year, but kept secret, the US government charged the three executives who all had worked at Takata facilities in Japan and the US.

They were identified as Shinichi Tanaka, who was executive vice president for global inflator operations; Hideo Nakajima, who was head of engineering at the company’s automotive systems labs; and Tsuneo Chikaraishi, who was chief of the airbag inflator operations department for Asia.

US Attorney for the Eastern District of Michigan Barbara McQuade on Friday told reporters that she believed the three were in Japan and said officials would work to secure their extradition to face trial in the US.

“The three Takata executives routinely discussed in e-mail messages the need to falsify reports to their customers,” McQuade said.

“They falsified and manipulated data because they wanted to make profits on their airbags knowing that they were creating a risk for the end user,” she said. “The risk that they allowed to happen is really reprehensible.”

About 100 million Takata airbags have been recalled worldwide over a defect that can send metal and plastic shrapnel hurtling from the inflator canister toward drivers and passengers when an airbag is deployed.

A Texas teenager died in March last year after a Takata airbag in her Honda Civic ruptured in a crash, sending a metal fragment into the side of her neck, according to media reports.

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