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Takata accepts guilty plea

Not quick: The Takata airbag debacle is not only costing motor companies big dollars but also Australian taxpayers, who have to foot the bill for the ACCC to make sure recall repairs are done.

Questions hang over car-makers' knowledge of faulty inflator as Takata pleads guilty

28 Feb 2017

JAPANESE airbag manufacturer Takata has pleaded guilty to a felony charge in a United States federal court as part of a $US1 billion ($A1.3b) settlement deal made with the justice department that includes compensation funds for victims of the faulty airbag inflators, and car-makers.

According to Reuters, US District Court judge George Steeh approved the settlement, despite lawyers for the victims objecting to the settlement identifying car-makers as victims of fraudulent activity.

The judge said that the car manufacturers could still be subject to civil litigation for harm to individuals, as well as being identified as victims of Takata’s decision to hide evidence over 15 years that its inflators were faulty.

The settlement allows Takata to be sold or restructured and with the penalties locked in, the Japanese company is likely to step up its search for a buyer, or a new financial backer.

Reuters has reported that the judge considered imposing a harsher sentence – the court guidelines allow for $US1.5b – but he approved the settlement to ensure that Takata did not go bankrupt, which would delay the replacement of millions of faulty inflators.

Takata’s chief financial officer Yoichiro Nomura appeared in court to accept the plea agreement, saying: “I would like to sincerely apologise on behalf of Takata.”

Lawyers representing US vehicle owners have alleged in separate US court documents filed this week that at least four car-makers knew about the defective Takata inflators for a number of years, but continued to use them.

The allegations are based on evidence gained from the car-maker’s own documents, with some of the accused companies including Honda, Nissan, Ford and Toyota.

According to The New York Times, the US justice department investigation has depicted the car manufacturers as unwitting victims that were deceived by Takata, which was manipulating safety data in a bid to conceal potentially deadly defects.

In a filing in a Florida court this week, car-makers highlighted Takata’s guilty plea as confirmation that it was the Japanese parts-maker that was solely to blame, but plaintiffs in the civil action are arguing that car manufacturers were more involved in the handling of the inflator defect.

The exploding Takata airbag inflators have led to at least 16 deaths – all but one in Hondas – with 10 manufacturers forced to recall 31 million vehicles globally to fix the problem.

Last month Takata agreed to set up two independently administered funds, one worth $US850 million ($A1.1b) to compensate car-makers for the massive number of recalls and a second worth $US125m ($A162m) for people that were physically injured by the faulty airbag inflators and who have not yet reached a settlement with the company.

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