Takata to pay $1.4b over faulty airbags

Japanese autoparts maker Takata Corp. will pay a US$1 billion (S$1.43 billion) settlement over its handling of faulty airbags. And three executives were charged with criminal wrongdoing, part of an ongoing shift in settlement strategy. VIDEO: REUTERS
United States prosecutors say Takata's airbags can rupture violently when they deploy, and have been linked to at least 11 deaths and more than 180 injuries in the US.
United States prosecutors say Takata's airbags can rupture violently when they deploy, and have been linked to at least 11 deaths and more than 180 injuries in the US.PHOTO: AGENCE FRANCE-PRESSE

Executives also charged over falsification of data to mask defect

NEW YORK • Prosecutors in the United States said they have charged three executives at Takata, the Japanese auto parts maker, over the fabrication of test data to mask a fatal airbag defect, a striking turn in a case that set off the largest automotive recall in US history.

Prosecutors also announced that Takata had agreed to plead guilty to charges of wire fraud for providing the false data, a rare outcome for businesses accused of wrongdoing.

The company, based in Tokyo, was also fined US$1 billion (S$1.43 billion).

The guilty plea and fine had been widely expected, but the charges against the executives intensified a scandal that has roiled regulators, led to congressional hearings and brought the Japanese manufacturer to the brink of bankruptcy.

The airbags, which can rupture violently when they deploy, have been linked to at least 11 deaths and more than 180 injuries in the US.

"(Takata) falsified and manipulated data because they wanted to make profits on their airbags, knowing they were creating risk for the end users, who are soccer mums like me," Ms Barbara McQuade, a US attorney for the eastern district of Michigan, said at a news conference in Detroit.

"The risk they allowed is really reprehensible. We want auto suppliers to know they have to put safety ahead of profits. Cheaters will not be allowed to gain a competitive advantage."

The indictments are the latest moves by the outgoing Obama administration to come down harder on white-collar crime, including guilty pleas from companies and charges against individual managers and executives.

Last week, federal prosecutors also charged six Volkswagen executives over their roles in an emissions-cheating scandal, and the automaker pleaded guilty to charges of conspiracy and other crimes.

In cases echoing that of Volkswagen, the US Environmental Protection Agency last Thursday accused Fiat Chrysler of installing secret software that allowed more than 100,000 of its diesel vehicles to emit pollutants above legal levels. Paris prosecutors, who raided Renault a year ago in an initial emissions investigation, also opened a probe into the automaker last Friday.

Takata's executives are accused of especially egregious conduct.

According to the indictment, the executives were at the centre of efforts to manipulate airbag safety data that continued for as long as 15 years. They knew as early as 2000 that the airbags' metal inflaters could explode, prosecutors said. But over the years, they routinely discussed falsifying those test results, discarding damaging information, an action referred to internally at Takata as "XX-ing" the data, the indictment said.

Ms McQuade stressed that investigations were still under way.

"We will continue to investigate, and if we are able to identify additional individuals, we will charge them as well," she said.

NYTIMES, AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Sunday Times on January 15, 2017, with the headline 'Takata to pay $1.4b over faulty airbags'. Print Edition | Subscribe