Takata agrees to $1 billion plea deal
CEO says conduct in airbag case was ‘deeply inappropriate’
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.