On February 27, 2017, the Department of Justice announced that the Takata Corporation, a major global supplier of automotive safety equipment, had pleaded guilty to one count of wire fraud and agreed to pay $1 billion in relation to its marketing and selling of defective airbags. Takata, a multinational corporation based in Japan but with production facilities on four continents, admitted to defrauding customers and automakers by manipulating airbag inflator test data to make its airbags seem more safe than they in fact were.
“For over a decade, Takata lied to its customers about the safety and reliability of its ammonium nitrate-based airbag inflators,” said Acting Assistant Attorney General Blanco. “Takata abused the trust of both its customers and the public by allowing airbag inflators to be put in vehicles knowing that the inflators did not meet the required specifications. Today’s sentence shows that the department will work tirelessly to hold responsible those who engage in this type of criminal conduct.”
The plea agreement is structured thusly: $850 million will be paid by Takata to a fund for airbag replacement and recall costs incurred by auto manufacturers who had been given defective airbags. $125 million will be given to those who had been physically injured by Takata’s defective airbags (and have not already reached a separate settlement with the company). In addition, Takata will pay a $25 million fine, and has been given three years probation.
At least 16 deaths have been attributed to the defective airbags, which have led to the recall of a record 42 million vehicles. The press release announcing the settlement can be found here: https://www.justice.gov/opa/pr/takata-corporation-pleads-guilty-sentenced-pay-1-billion-criminal-penalties-airbag-scheme.