Company - - Jan 13,2017
Japanese automotive parts company, Takata Corporation, is expected to plead guilty to criminal misdeed over its air bag ruptures which caused 16 deaths worldwide.
According to sources, the settlement includes a $25 million criminal charges, $125 million in victim compensation and $850 million to compensate carmakers who have suffered losses from the enormous recalls.
The settlement also calls for the self-governing monitor of the automotive supplier, Takata Corp. It could help Takata win financial support from an investor to possibly restructure and pay for huge liabilities from the world’s largest auto safety recall.
As part of the arrangement, Takata Corp. is expected to pay compensation to some victims and to 19 automobile manufacturers, which have been pushed to recall as many as 42 million automobiles, sometimes multiple times, to change defective air bag inflators.
The recall impacts several major automobile manufacturing companies; General Motors Co., Ford Motor Co., Toyota Motor Corp., Volkswagen AG and Fiat Chrysler Automobiles NV.
According to sources, Takata is poised to plead guilty to wire scam or providing untruthful test data to the United States regulators. The wire scam charge is expected to be filed in US District Court in Detroit, MI. The Justice Dept. of US is considering naming Ken Feinberg to supervise the Takata Corp. settlement funds.
In 2015, Takata confessed in a separate $70 million settlement with the United States auto safety watchdogs that it was aware of a fault in it manufactured air bag inflators but didn’t issue a suitable recall.
In May 2015, the National Highway Traffic Safety Administration (NHTSA) ordered Takata Co. and automakers to recall up to 69 million inflators in 42 million cars by the end of 2019. As of December 2, 2016, auto manufacturers informed they have overhauled 12.5 million inflators or almost 18% of those recalled or soon to be recalled.