Takata, Japanese car part manufacturer, has pleaded guilty and agreed to pay $1bn in settlement for having hidden dangerous defects in its exploding airbags, reports Yahoo News.
In addition, the US indicted three former Takata executives, making the case the first criminal charges in a scandal that has resulted in the largest auto safety recall.
The three, Hideo Nakajima, Shinichi Tanaka and Tsuneo Chikaraishi, who were long serving executives until 2015, were charged with fraud after concealing defects in the airbags. The flaws have been blamed for having caused the deaths of 16 people and injuries of other 100 all over the world.
According to a ruling made in the federal court in Michigan, the firm will pay $25m fine, $125m to people injured by the airbags and $850m to carmakers that used them.
These incidences have greatly affected major carmakers and resulted into 100 million recalls of the Takata airbags worldwide.
Manipulated Test Data
“Takata deeply regrets the circumstances that have led to this situation and remains fully committed to being part of the solution,” said Shigehisa Takada, the company’s chief executive.
Sometimes back, Takata admitted that some of their airbag inflators expanded abnormally. Instead of doing so gently to protect the passengers, they sprayed metal shrapnel into cars due to excessive expansion force.
Head of the Justice Department’s fraud section, Andrew Weissmann, said that Takata has been providing incorrect test data. He accused the company for valuing profits and production schedules more than safety.
Calvin L Scovel, inspector general of the US Department of Transportation, apologized to every person affected by the “Takata Corporation’s failure to fulfil its safety obligation.”
When reports of the settlement emerged, Takata closed the share with a 17% higher. The total cost of the global recall is yet to be made public but reports that the firm is reconstructing its deals and shielding itself from any potential bankruptcy.