Takata pleads guilty in air bag scandal, agrees to $1B penalty
DETROIT — Japanese auto parts maker Takata Corp. pleaded guilty to fraud Monday and agreed to pay a $1 billion penalty for concealing a deadly defect in millions of its air bags.
Takata admitted hiding evidence that its air bag inflators can explode with too much force, hurling shrapnel into drivers and passengers.
The inflators are blamed for at least 16 deaths worldwide— 11 of them in the U.S. — and more than 180 injuries. The problem touched off the biggest recall in U.S. automotive history, involving 42 million vehicles and up to 69 million inflators. The company’s chief financial officer, Yoichiro-Nomura, entered the guilty plea on Takata’s behalf in federal court in Detroit. He also agreed that Takata will be sold or merge with another company.
The penalties include $850 million in restitution to automakers, $125 million for victims and families and a $25 million criminal fine.
Takata’s inflators use ammonium nitrate to create a small explosion that inflates air bags. But when exposed to prolonged high temperatures and humidity, the chemical can deteriorate and burn too fast. That can blow apart a metal canister.
In the U.S., 19 automakers are recalling the inflators. Worldwide, more than 100 million inflators are being recalled.
Karl Brauer, executive publisher of Kelley Blue Book, said authorities may have kept the penalty manageable so Takata could stay in business and continue to carry out the giant recall.
“Simply because destroying them makes the problem muchworse,” he said.
Takata agreed to pay a $1 billion penalty.