Takata agrees to $1 bil­lion plea deal

CEO says con­duct in airbag case was ‘deeply in­ap­pro­pri­ate’

USA TODAY US Edition - - MONEY - Brent Snavely Detroit Free Press

Ja­pan’s Takata, one of the world’s largest au­to­mo­tive sup­pli­ers, pleaded guilty Mon­day as a cor­po­ra­tion in fed­eral court, agreed to a $1 bil­lion plea deal and told a fed­eral judge its be­hav­ior over a 15-year pe­riod was “deeply in­ap­pro­pri­ate.”

Takata, a 70-year-old sup­plier of airbags, seat­belts and other safety equip­ment to nearly ev­ery global au­tomaker, made airbags that have been tied to 17 deaths glob­ally.

The po­ten­tially de­fec­tive airbags, which can spray shrap­nel into the faces of oc­cu­pants when they ac­ti­vate, are on more than 42 mil­lion ve­hi­cles world­wide. Its head­quar­ters is in Tokyo but its U.S. head­quar­ters is in Auburn Hills, Mich.

Wear­ing a blue shirt and a dark gray suit, Yoichiro No­mura, Takata’s chief fi­nan­cial of­fi­cer, ex­pressed the com­pany’s “deep re­gret.”

“The con­duct lead­ing to to- day’s plea was com­pletely un­ac­cept­able,” No­mura said. “I would like to sin­cerely apol­o­gize on be­half of Takata. The ac­tions of cer­tain Takata em­ploy­ees to un­der­mine the in­tegrity of the com­pany’s test­ing data and re- port­ing to cus­tomers were deeply in­ap­pro­pri­ate.”

U.S. District Judge Ge­orge Caram Steeh ac­cepted the plea agree­ment crafted in ne­go­ti­a­tions be­tween the U.S. Depart­ment of Jus­tice and Takata de­spite sev­eral ob­jec­tions filed by at­tor­neys rep­re­sent­ing vic­tims in civil cases filed sep­a­rately against Takata.

Steeh said he ini­tially thought the penal­ties were not steep enough but ul­ti­mately ac­cepted them be­cause the com­pany is likely to go bank­rupt and be un­able to meet steeper fines.

“All of it could have been avoided,” if em­ploy­ees had been hon­est, Steeh said.

The plea agree­ment in­cludes a $25 mil­lion crim­i­nal fine, a $125 mil­lion com­pen­sa­tion fund to be set up 30 days from Mon­day and $850 mil­lion to be paid to au­tomak­ers within five days of a sale or ac­qui­si­tion by an­other com­pany.

In ad­di­tion, Takata agreed to al­low the judge to ap­prove an in­de­pen­dent “spe­cial mas­ter,” to over­see the fund.

JEFF KOWALSKY, EPA

Er­land Zeka re­moves a Takata brand air bag as he per­forms a ser­vice re­call. U.S. District Judge Ge­orge Caram Steeh ac­cepted a plea agree­ment with the Ja­panese auto sup­plier.

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