Takata’s faulty airbags looking to cost $1bn (£812m) in U.S. settlement

It hasn’t been a good few years for the automotive industry. First we had the Volkswagen (VW) scandal, and now Takata Corporation’s huge airbag disaster; which may cost the Japanese auto suppliers up to $1 billion (£812 million) in a U.S. criminal settlement.

Takata has been manufacturing airbags for several automakers since 1988, and reportedly holds 20% of the market. Automakers in the mix include Honda, BMW, Chrysler, Ford, Mazda, VW, Nissan and Toyota.

Since 2013, approximately 70 million vehicles in the U.S. have been, or will be, recalled due to the “high risk” of the defective, shrapnel-shooting airbags. The issue involves a defective inflater that may not open properly in the event of a crash, and may actually shoot metal fragments into drivers and/or passengers instead.

How many automakers are involved?

Initially there were six automakers involved when Takata announced the fault in April 2013. Since then, 18 more manufacturers have cropped up on the horizon. Some 2001-2003 Honda models have been labelled as having a “high risk” of airbag inflater ruptures, and have been identified as the most vehicles with the defective airbags.

The National Highway Traffic Safety Administration (NHTSA) sent out warning notices to drivers to stop driving immediately with the U.S. Transportation Secretary stating:

“…with as high as a 50% chance of a dangerous airbag inflator rupture in a crash, these vehicles are unsafe and need to be repaired immediately.”

Although there are serious risks associated with driving the vehicles, millions are forced to continue driving them as there aren’t enough replacement airbags to make all the necessary repairs until 2019, according to the NHTSA. This is certainly not a good enough excuse as these defective airbags are a matter of life or death! I’m sure that the problem is going to persist in years to come if these deadly vehicles aren’t taken off the road soon.

Deaths and injuries

To date, the faulty airbags in Honda vehicles have reportedly caused 16 deaths worldwide, and 11 deaths and 184 injuries in the U.S. alone. In July 2014, a pregnant woman was killed in a collision involving her 2003 Honda City, and it was determined that she died as a result of the faulty airbag when the metal fragment burst from the driver’s airbag and sliced into her neck.

Fines and penalties

Takata has already been fined $70 million (£57 million) in penalties and up to $200 million (£162 million) for failing to promptly fix the vehicles or report the defect. However, the $70 million is no skin on the $1 billion (£812 million) criminal settlement’s teeth as the Japanese auto supplier comes close to finalising a deal with U.S. prosecutors. The deal is said to involve Takata pleading guilty to a range of charges, including criminal misconduct.

The settlement offer is thought to be paid over several years to ensure that it won’t bankrupt the company. There are not any finalised offers as of yet. With the Obama administration drawing to a close at the end of January, there is uncertainty on the horizon as well.