Takata pleads guilty over momentous air bag scandal and have agreed to pay $1 billion in fines.

It seems the Takata airbag scandal is finally drawing to a close as the auto parts manufacturer, Takata Corp, has pleaded guilty to fraud in hiding the dangerous defect.

Based in Japan, the company found themselves in hot water as 16 deaths were connected to lethal Takata airbags that exploded inside car cabins. Whilst the majority of the fatalities were in the U.S., Takata airbags are used worldwide.

The biggest recall in auto history

Takata was once a highly celebrated auto parts maker, supplying a third of all cars globally with their signature airbags. After the scandal came to light, concerns from the public erupted, fearing their cars also contained defective airbags that may explode. It ignited that largest recall in U.S. auto history. Around 42 million vehicles across 19 car makers were involved in the recall and over 100 million individual inflators have been recalled.

During the earlier investigations, company officials and engineers were revealed to have known about the defects, and in fact not only concealed the evidence, but they actively encouraged other employees to do so in emails saying “happy manipulating.”

This is coming from a company that is supposed to protect human safety…

Guilty plea

Takata admitted these allegations, confirming that it was aware, and hid evidence that millions of their airbags contained defective inflators that could explode; shooting shards of sharp metal into the car cabin. In addition to the 16 deaths, over 180 injuries have been reported worldwide which is an astronomical amount.

Toichiro Nomura, chief financial officer for Takata, expressed his regret on behalf of the company, calling their behaviour “completely unacceptable”. As with many cases where companies were deceptive in hiding their wrongdoing, this may be another case of: “you’re only sorry you got caught”.

The hefty $1 billion fine (around £775 million) includes:

Discounts on fines

Takata received an incredible discount for the government penalty. Under the usual rules, the car parts maker would have been looking at a $1.5 billion fine just as a financial penalty to the U.S government. However, the judge on the case took into consideration that such a penalty would have bankrupted the company. It is more important that the victims of the scandal get paid rather than shutting the company down because they deserve it.

Other companies involved

The auto companies receiving the majority of the billion dollar fine may need to use the money to fix the recalled vehicles, all the while attempting to restore their reputations. Whilst they have been accused of knowing about the defects and using them anyway, the auto makers have stated that they too were deceived by Takata.

In 2009 when one inflator exploded, a car maker described the issue as:

“…one in which a passenger protection device was transformed into a killing weapon.”

Takata’s pleadings seem to support the car makers defence by revealing their deception was carried out through:

“…submission of false and fraudulent reports and other information that concealed the truth and accurate test results.”

However, Honda, Toyota, Ford, Nissan and BMW may be implicated in the pleadings for choosing to use Takata airbags to save money when experts had raised objections to the inflators’ safety. Could the companies that narrowly escaped the recent emissions scandal be in deep water?