Four automakers agreed to a US$553 million settlement to address class-action economic loss claims covering owners of nearly 16 million recalled vehicles with potentially defective Takata Corp airbag inflators, court documents filed on Thursday showed.
Toyota Motor Corp’s share of the settlement costs is US$278.5 million, followed by BMW AG at US$131 million, Mazda Motor Co at US$76 million and Subaru Corp at US$68 million.
While the settlement does not mean an end to legal headaches faced by Takata or its automaker clients, the resolution could help the embattled Japanese airbag maker’s efforts to search for a financial sponsor by removing one litigation uncertainty.
Shares of Takata, which was not named as a plaintiff in the case, jumped 20 percent in Tokyo yesterday.
Takata has been searching for more than a year to find a financial sponsor to pay for costs to replace its inflators, which are at the center of the auto industry’s biggest-ever recall.
US auto components maker Key Safety Systems Inc and private equity fund Bain Capital are trying to strike a rescue deal worth about ￥200 billion (US$1.79 billion) with Takata’s steering committee and its automaker customers.
The settlement highlights the knock-on effect of the recalls, which began in 2008 and cover about 100 million inflators worldwide used in vehicles made by 19 automakers.
Takata’s inflators can explode with excessive force and unleash metal shrapnel inside cars and trucks, and have been blamed for at least 16 deaths and more than 180 injuries worldwide.
“This is a settlement between us and our customers,” a Tokyo-based Mazda spokeswoman said.
Lawsuits against Honda Motor Co, Ford Motor Co and Nissan Motor Co have not been settled, lawyers said.
The four automakers who settled said in a joint statement that they agreed to the deal “given the size, scope and severity of the Takata recall,” but did not admit fault or liability.
The automakers said the settlements, if approved by a Florida judge, would be overseen by a court-appointed administrator.
The settlement includes an outreach program to contact owners; compensation for economic losses including out-of-pocket expenses; a possible residual distribution payment of up to US$500; rental cars for some owners; and a customer support program for repairs and adjustments, including an extended warranty.
In January, Takata agreed to plead guilty to US charges of criminal wrongdoing and to pay US$1 billion to resolve a federal investigation into its inflators.
The majority of the reported airbag-related fatalities and injuries have occurred in the US.
Automakers have recalled 46 million Takata airbag inflators in 29 million US vehicles.
By 2019, automakers are to recall 64 million to 69 million US inflators in 42 million vehicles, regulators said in December last year.
Most inflators have not been fixed.
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