Takata pleads guilty in US airbag fraud case

By Barry Eitel

SAN FRANCISCO (AA) – Japanese airbag manufacturer Takata agreed to pay $1 billion in penalties Monday after it pleaded guilty in a fraud case that centered on the company’s defective airbags parts linked to a number of deaths.

In pleading guilty to fraud, Takata acknowledged it knew millions of its airbag inflators could inflate too forcefully and fling lethal shards of metal into passengers.

Chief Financial Officer Yoichiro Nomura expressed "deep regret" for the scandal and apologized to the court for actions of employees during a 15-year period.

"The conduct leading to today's plea was completely unacceptable,” Nomura said. "I would like to sincerely apologize on behalf of Takata. The actions of certain Takata employees to undermine the integrity of the company's testing data and reporting to customers were deeply inappropriate,” he added.

The government blasted the 70-year-old company in a statement. “According to admissions made during the course of the guilty plea, from 2000 through and including 2015, Takata carried out a scheme to defraud its customers and auto manufacturers by providing false and manipulated airbag inflator test data that made the performance of the company’s airbag inflators appear better than it actually was,” the Department of Justice said. “Even after the inflators began to experience repeated problems in the field – including ruptures causing injuries and deaths – Takata executives continued to withhold the true and accurate inflator test information and data from their customers.”

The inflator is directly blamed for the deaths of 16 victims worldwide, including 11 in the U.S. as well as 180 injuries across the globe. Once the issue was discovered by regulators, 69 million inflators and 42 million vehicles were recalled in the largest recall in U.S. automotive history.

“We hope that today's guilty plea and sentence will send a message to suppliers of consumer safety products that they must put safety ahead of profits,” U.S. Attorney Barbara McQuade said in a statement.

The plea agreement was approved by Judge George Caram Steeh of the U..S District Court for the Eastern District of Michigan. Steeh noted in his decision that it would take more litigation to decide whether automakers were victims of Takata’s deception or culprits alongside the Tokyo-based company.

The plaintiffs’ attorneys in dozens of related lawsuits claimed BMW, Ford, Honda, Nissan and Toyota knew the Takata’s airbag inflators were defective but continued to install the devices for several years in order to cut costs.

Takata will pay $850 million in restitution to automakers, $125 million to victims and $25 million to the U.S. government.