Takata agrees to guilty plea, will pay $1 billion
Detroit — Takata Corp. has agreed to plead guilty to a single criminal charge and will pay $1 billion in fines and restitution for a years-long scheme to conceal a deadly defect in its automotive air bag inflators.
The U.S. attorney’s office in Detroit announced the deal Friday, hours after it unsealed a six-count grand jury indictment against three former Takata executives who are accused of executing the scheme by falsifying and altering test reports that showed the inflators could rupture.
Takata inflators can explode with too much force, spewing shrapnel into automobiles. At least 11 people have been killed in the U.S. and 16 worldwide because of the defect. More than 180 have been injured.
Under the deal, Takata will pay a $25 million criminal fine, $125 million to individuals injured by the air bags and $850 million to automakers that purchased the inflators.
A federal judge will be asked to appoint attorney Kenneth Feinberg to distribute restitution payments.
Payments to individuals must be made soon. Money due to automakers must be paid within five days of Takata’s anticipated sale or merger. Takata is expected to be sold to another auto supplier or investor sometime this year.
“Automotive suppliers who sell products that are supposed to protect consumers from injury or death must put safety ahead of profits,” said Barbara McQuade, the U.S. attorney in Detroit, whose office worked on a two-year investigation into the company.
The Justice Department was criticized for failing to charge any individuals in earlier high-profile cases against automakers General Motors and Toyota. Now it’s done so twice in one week. Prosecutors disclosed the indictment of six Volkswagen executives Wednesday when they announced a settlement of a criminal probe into the German car company’s emissions-cheating scheme.
On Friday, prosecutors unsealed a Detroit federal grand jury indictment of three former Takata executives, Shinichi Tanaka, Hideo Nakajima and Tsuneo Chikaraishi. All were suspended by the company last year. Takata, based in Japan, has its U.S. headquarters in the Detroit suburb of Auburn Hills, Mich.
According to an indictment, as early as 2000 the trio falsified and altered reports to hide from automakers tests that showed the inflators could rupture or otherwise fail to meet specifications. They were charged with six counts of conspiracy and wire fraud. Takata was charged separately with one count of wire fraud.