U.S. Penalizes Takata $1 Billion and Charges Three Executives with Fraud
Takata Airbag Recall
The U.S. government has fined Takata Corp. $1 billion as part of the Japanese automotive supplier’s agreement to plead guilty to one count of wire fraud. The move comes after potentially faulty and explosive airbags supplied by Takata prompted the largest automotive safety recall in U.S. history.
The fine is broken down as a $25 million criminal fine, $125 million for victim compensation, and $850 million for compensating automakers, as announced Friday by the U.S. Attorney’s Office for the Eastern District of Michigan. This criminal financial penalty is separate from a $70 million settlement between Takata with U.S. safety regulators in 2015. There is other litigation pending, including at least one class-action suit filed on behalf of car owners affected by the recall.
The Takata airbag recall spans 19 automakers and involves more than 65 million airbags installed in about 42 million vehicles. Faulty airbag inflators supplied by Takata have been linked to 16 deaths globally. In the United States, there have been 220 confirmed cases of Takata-supplied airbag inflators exploding, resulting in 11 deaths and 184 reported injuries as of December 1, according to the National Highway Traffic Safety Administration.
A federal grand jury has separately charged three Takata executives—Shinichi Tanaka, Hideo Nakajima and Tsuneo Chikaraishi—with wire fraud and conspiracy. There are six counts against each of the executives, and Reuters reported that arrest warrants have been issued for all three. It was not immediately clear whether the executives are cooperating with authorities.
Speaking in Detroit, U.S. attorney Barbara McQuade said the executives “routinely discussed in email messages” ways to “falsify reports to customers.” They called it “X-ing the data” and directed engineers to falsify and manipulate statistical information, McQuade charged.