Takata Corp., a Japanese auto parts manufacturer, pleaded guilty to wire fraud and agreed to pay $1 billion for its role selling defective airbags, and concealing the defects.
DETROIT -- Takata Corp., a Japanese auto parts manufacturer, pleaded guilty to wire fraud and agreed to pay $1 billion for its role selling defective airbags, and concealing the defects.
The defective airbags are connected to 16 deaths and 180 injuries worldwide. Takata's recall was the biggest in U.S. history, as it involves an expected 42 million vehicles and 69 million inflators.
Some airbag inflators have become explosive, sending metal pieces flying through the cabin when deployed. The ammonium nitrate that ignites the air bag inflators can be damaged by moisture over time, especially in humid environments, causing the danger of explosion.
The airbags in question were installed on both the driver and passenger sides of vehicles. The explosive airbags would send shrapnel flying through the cabin of the vehicles when deployed.
Takata pleaded guilty Monday, Feb. 28 in the U.S. Eastern District Court in Detroit.
Judge George Caram Steeh sentenced Takata to pay $975 million in restitution, a $25 million fine and three years probation, the Department of Justice reports in a news release. A $125 million fund for those injured by Takata's airbags has been created, and an additional $850 fund for replacement costs for manufacturers.
Takata's sentence pales in comparison to Volkswagen's $21 billion penalty for its cheating emissions scandal. Steeh told the Associated Press that tearing apart the company "would probably be a fair outcome," but it wouldn't help victims get paid.
Nineteen automakers, 22 brands and more than 42 million vehicles worldwide were affected. To see the full list of affected vehicles, click here.
"For over a decade, Takata lied to its customers about the safety and reliability of its ammonium nitrate-based airbag inflators," Assistant Attorney General Blanco said in the release. "Takata abused the trust of both its customers and the public by allowing airbag inflators to be put in vehicles knowing that the inflators did not meet the required specifications."
In January, prosecutors said Takata put profits ahead of safety by taking part in a scheme to falsify and alter test reports that showed airbag inflators could rupture for more than a decade. Shinichi Tanaka, executive VP of Inflator Global Operations, Hideo Nakajima, director of engineering of automotive systems laboratory and Tsuneo Chikaraishi, chief of Japan, Inflator Global Operations have all been charged with five counts of wire fraud and one conspiracy count in a scheme to conceal the defect in air bag inflators.
According to the company's admissions, Takata began developing airbag inflators that relied upon ammonium nitrate as their primary propellant.
From at least in or around 2000, Takata knew certain ammonium nitrate-based inflators were not performing to required specifications. Takata also knew that certain inflators had sustained failures, including ruptures, during testing.
With all of this information, the company submitted false and fraudulent reports and other information that concealed the true condition of the inflators.
In documents filed Monday, Takata claims it biggest customer, Honda, were involved in the design of the faulty airbag inflators. A.P. reports that the filings claim two inflators exploded at Honda's facilities in 1999 and 2000.
Honda responded to the filings by calling them misleading, and called the allegations false.