Most states to forgo Takata’s legal deal

DETROIT — Japanese air bag maker Takata Corp. has reached a $650 million deal to settle consumer protection claims from 44 states and Washington, D.C., but only a fraction of the money will be paid due to Takata’s financial problems and bankruptcy.

In an agreement announced Thursday, the states said they will not collect the settlement so that victims of Takata’s faulty air bag inflators can get a bigger piece of the company’s remaining money. There’s an exception, though. South Carolina, which led the states, will get just over $139,000 to cover costs of the investigation.

The faulty Takata air bag inflators can explode with too much force and spew shrapnel. At least 22 people have died worldwide and more than 180 have been hurt.

Attorneys general for the states alleged that Takata concealed air bag safety issues and failed to disclose safety defects.

Takata was forced into bankruptcy last year amid lawsuits, multimilliondollar fines and crushing recall costs involving air bag inflators that use the explosive chemical ammonium nitrate as a propellant. The chemical can deteriorate over time when exposed to high heat and humidity and burn too fast, blowing apart a metal canister. A reorganization plan was approved last week by a federal bankruptcy judge in Delaware.

“We were able to resolve this investigation while ensuring that the needs of injured consumers take priority,” South Carolina Attorney General Alan Wilson said.

Also under the deal, Takata agreed not to represent its air bags as safe unless supported by scientific evidence, not to falsify any testing data and to keep cooperating with automakers to make sure replacement inflators are available. It also will not sell any air bags that use ammonium nitrate unless it’s for recall replacement parts. Some of the provisions already were included in a deal with the National Highway Traffic Safety Administration.

As part of a criminal plea agreement with the U.S. Justice Department, Takata agreed to pay victims $125 million and $850 million in restitution to automakers who bought its inflators and are stuck with recall and litigation costs.