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Defective Air Bag Maker Pleads Guilty to Fraud and Agrees to Pay $1 Billion

At least 16 people have died and 180 have been injured due to the defective air bags made by Japanese manufacturer Takata which were installed on cars manufactured by Honda, Toyota, BMW, Ford, and Nissan. Although carmakers allegedly knew that the air bags were defective at least as far as back as 1998, it was not until late February 2017 that Takata finally pled guilty to fraud charges brought by the US Department of Justice which has been investigating the supplier. As part of a plea agreement with federal prosecutors, Takata will play $1 billion in penalties, including:

  • A $25 million criminal fine
  • $125 million in restitution to consumers who have been harmed or may be harmed by the defective air bags
  • $850 million to the carmakers who have been responding to consumer complaints and lawsuits over the defective air bags

Takata will also be forced to sell its assets as part of fulfilling its obligations under the plea agreement.

The Story of the Deadly Takata Air Bags

Takata manufactured over 42 million air bags that were installed in carious cars produced by Honda, Toyota, BMW, and Nissan. Unlike other major air bag makers, Takata used ammonium nitrate, an explosive, to fill its airbags. The danger with ammonium nitrate is that it can deteriorate when exposed to moisture, with the result being that air bags could rupture with shrapnel being projected into the faces of drivers and passengers.

Takata has admitted that it knew about problems with its air bag design since as early as 2000 but nevertheless marketed the air bags to manufacturers as a cheaper alternative to other air bags. In so doing, the company provided false test results to those car makers which hid their dangers.

How much the car makers knew about the dangers posed by the Takata air bags is currently the subject of proceedings brought on behalf of injured victims against those car makers. Nothing in the Takata criminal proceedings prevents injured victims from pursuing the financial recovery they are owed from liable car makers.

Bringing an Automotive Defect Lawsuit

At McCune Smith, our complex litigation attorneys have extensive experience in investigating consumer fraud and defective product matter issues in the automotive industry. If you have been injured in accident caused by an automotive defect, recovery for your injuries, property damage, and other losses is available through the court system. Contact one of our attorneys today to schedule a consultation regarding your claim.

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