Business

United States indicts 3 Takata executives in faulty air bag scandal

United States indicts 3 Takata executives in faulty air bag scandal

They were identified as Shinichi Tanaka, who was executive vice president for global inflator operations; Hideo Nakajima, who was head of engineering at the company's automotive systems labs; and Tsuneo Chikaraishi, who was chief of the airbag inflator operations department for Asia.

Takata will pay $1 billion in a settlement with the U.S. Justice Department over airbag ruptures, Reuters reported today.

"The settlement includes a $25 million criminal fine, $125 million in victim compensation and $850 million to compensate automakers who have suffered losses from massive recalls, the sources said", reveals the publication. Those automakers, in turn, paid Takata more than $1 billion for tens of millions of faulty inflators, according to the court.

"If they choose instead to engage in fraud, we will hold accountable the individuals and business entities who are responsible", U.S. Attorney Barbara McQuade said in a statement.

Some victim advocates are concerned the settlement pays too much to the automakers, and doesn't set aside enough for those injured by the inflators - especially because the number of victims could increase as long as defective products remain unrepaired in cars.

The U.S. government has fined Takata Corp.

As part of the deal, which still needs to be approved by a judge, Takata agreed to plead guilty to the felony offense of wire fraud.

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Arrest warrants were issued for all three former executives.

The air bags have been blamed for at least 11 deaths and 184 injuries in the U.S.

A USA -based spokesman for Takata did not have an immediate comment and said a statement would be issued later Friday.

To date, National Highway Traffic Safety Administration says 12.4 million total airbag inflators have been repaired or replaced, including 6.7 million driver-side airbags and 5.7 million passenger-side airbags have been fixed.

The indictments come in addition to the $1 billion in criminal penalties that Takata has agreed to pay to the Justice Department to resolve allegations it mishandled the massive recall that has affected just about every auto company and continues to grow in size. The three men and others at the company deleted unfavorable data and manipulated other information, then signed off the falsified records as proof to automakers that the air bags met safety standards, according to the documents.

Unlike most other air bag makers, Takata's inflators use explosive ammonium nitrate to fill air bags in a crash. Honda Motor Co. and Takata have settled almost all lawsuits filed in connection with fatal crashes. The recall began with a relatively modest 14 million cars and trucks, and later expanded to 34 million that may have been equipped with faulty airbag inflators.

The company was warned by NHTSA in June 2016 as almost 300,000 unrepaired recalled vehicles posed a substantial threat for rupture.


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