4 CAR­MAK­ERS AGREE TO PAY US$553M

But Toy­ota, BMW, Mazda and Subaru not ad­mit­ting to fault or li­a­bil­ity

New Straits Times - - Business -

WASH­ING­TON

FOUR car­mak­ers have agreed to a US$553 mil­lion (RM2.4 bil­lion) set­tle­ment to ad­dress clas­s­ac­tion eco­nomic loss claims cov­er­ing own­ers of nearly 16 mil­lion re­called ve­hi­cles with po­ten­tially de­fec­tive Takata airbag in­fla­tors.

The deal came to light after court doc­u­ments were filed on Thurs­day.

Toy­ota Mo­tor Corp’s share of the set­tle­ment costs is US$278.5 mil­lion, fol­lowed by BMW AG at US$131 mil­lion, Mazda Mo­tor Co at US$76 mil­lion and Subaru Corp at US$68 mil­lion.

While the set­tle­ment does not mean an end to le­gal headaches faced by Takata Corp or its car­maker clients, the res­o­lu­tion could help the em­bat­tled Ja­panese airbag maker’s ef­forts to search for a fi­nan­cial spon­sor by re­mov­ing one lit­i­ga­tion uncer­tainty.

Shares of Takata, which was not named as a plain­tiff in the case, jumped 20 per cent in Tokyo yes­ter­day.

Takata has been search­ing for more than a year to find a fi­nan­cial spon­sor to pay for costs to re­place its in­fla­tors, which are at the cen­tre of the auto in­dus­try’s big­gest-ever re­call.

“This is a set­tle­ment be­tween us and our cus­tomers,” said a Tokyo-based spokesman for Mazda.

The four car­mak­ers who set­tled said in a joint state­ment they agreed to the deal “given the size, scope and sever­ity of the Takata re­call”, but did not ad­mit fault or li­a­bil­ity.

The set­tle­ment in­cludes an out­reach pro­gramme to contact own­ers; com­pen­sa­tion for eco­nomic losses in­clud­ing out-of­pocket ex­penses; a pos­si­ble residual dis­tri­bu­tion pay­ment of up to US$500; rental cars for some own­ers and a cus­tomer sup­port pro­gramme for re­pairs and ad­just­ments, in­clud­ing an ex­tended war­ranty.

In Jan­uary, Takata agreed to plead guilty to United States charges of crim­i­nal wrong­do­ing and to pay US$1 bil­lion to re­solve a fed­eral in­ves­ti­ga­tion.

The ma­jor­ity of the airbag-re­lated fa­tal­i­ties and in­juries have oc­curred in the US. Car­mak­ers have re­called 46 mil­lion Takata airbag in­fla­tors in 29 mil­lion US ve­hi­cles.

By 2019, car­mak­ers will re­call 64 mil­lion to 69 mil­lion US in­fla­tors in 42 mil­lion ve­hi­cles, reg­u­la­tors said in De­cem­ber.

Most in­fla­tors have not been fixed. Reuters

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