Billion-dollar consequences for negligent acts

Airbags are designed to keep drivers and passengers safe in the event of a motor vehicle accident. However, when a product meant to prevent harm causes physical injuries, trust placed in the manufacturer is misplaced, if not irrevocably shattered.

In what spurred the largest automotive recall in U.S. history two days prior, the U.S. Justice Department penalized a Japanese automotive manufacturer and supplier of airbags for misconduct to the tune of a $1 billion.

Products That Protect Result In Injuries And Death

Prosecutors determined that Takata knowingly provided misleading test reports on its airbags to its users, the largest being Honda. The company’s findings were deliberately selective, incomplete or inaccurate and resulted in serious injuries and death.

The decision follows the discovery of faulty airbag inflators produced at two North America facilities owned by Takata. Investigations revealed that the airbags would “over-aggressively deploy.” Shrapnel from “faulty, inferior, non-performing, non-compliant or dangerous inflators” killed fifteen people and injured hundreds, 184 in the U.S. alone.

The breakdown of the settlement includes:

• $25 million criminal penalty
• $850 million in restitution to automakers
• $125 million towards a compensation fund for victims

Wide-Ranging Consequences For Deceptions And Cover-Ups

Takada has already paid $200 million in fines through a settlement with the National Highway Traffic Safety Administration. The NHTSA ordered several recalls involving tens of million vehicles in the U.S. equipped with Takata airbags. More than 42 million recalls occurred worldwide.

In addition to the record-setting fine, three Takata senior executives were indicted for the cover-up.