Takata Likely To Settle Airbag Criminal Case For $1 Billion

Takata and the Department of Transportation have reportedly agreed to a settlement of nearly $1 billion in the safety parts manufacturer's record-shattering recall.

Slowly, but surely, the Takata airbag inflator recall and scandal may be drawing to a close. Sources told The Wall Street Journal Wednesday that the Department of Justice and the auto safety parts supplier have agreed to a penalty of nearly $1 billion. The payment will resolve charges of wrongdoing relating to Takata’s airbag inflators.

Though no firm figure has been announced, Wednesday’s news puts an upper limit on the penalty Takata is facing. The top-end number may be just south of $1 billion.

Potential Penalties

In addition to the potential penalty, Takata, and Justice officials are in talks regarding the possibility that the auto safety products manufacturer may plead guilty to criminal misconduct charges as part of the settlement. Takata may answer the misconduct charge as early as next month, though it is possible the timing may slip.

According to what is known about the terms of the agreement, Takata is likely to pay the penalty over some years. Justice and Takata declined to comment.

The settlement closes the Justice Department probe into Takata’s exploding airbag inflators. Since becoming public in 2014, Takata has sought to blunt or, at least, turn aside multiple criminal and civil court cases. The court actions said the parts supplier knew as early as the 1999 to 2001 timeframe that there was a problem with Takata’s airbag inflators. A member of its engineering staff pointed out problems with a redesign that was in process at the time. Over time, other problems developed as the safety parts supplier found that the airbag inflator housings were poorly sealed or poorly manufactured so that moisture could invade the housings and contaminate the ammonium nitrate used to deploy airbags. The deterioration caused by humidity and exposure to heat intensified the blast charge that deployed airbags. The strengthened charge led to disintegrating airbag housings that became lethal.

Dragging its feet, Takata did issue a series of recalls beginning in 2008 that were expanded and renewed through 2015. The callback campaign, by then, had exploded into what had become the largest recall in the history of safety recalls. Today it is estimated that by the time the dust settle as many as 79 million airbag inflators in millions of cars will be recalled in the U.S. Now, 21 automakers are involved in the recall. Worldwide figures are near 100 million inflators in millions of vehicles. To date, 16 deaths have been attributed to exploding airbag inflators where the housing shatters, spraying the vehicle’s front-seat occupants with shrapnel. Nearly 200 motorists have been severely wounded.

Recall Campaign May Widen

Earlier in December, the U.S. Department of Transportation said it would pressure the industry to speed the recall and replacement process. The move, observers say, has likely widened history’s largest auto safety recall.

Meanwhile, the beleaguered safety parts maker is in the process of restructuring so it can be sold. Takata is reportedly considering a Chapter 11 bankruptcy filing as part of its restructuring.

Sources: Reuters, Wall Street Journal, Automotive News