U.S. Confirms $1 Billion Takata Airbag Settlement

Takata Corp. has agreed to pay $1 billion to settle criminal charges in the U.S. that it conspired to hide airbag inflator defects blamed for 11 fatalities and more than 180 injuries.

The U.S. Dept. of Justice says Takata began submitting falsified test reports about the flawed inflators in 2000 and has since made more than $1 billion in sales on the devices. Takata paid a $70 million regulatory fine in the U.S. in 2015 for failing to promptly notify safety regulators about the defective inflators.

The settlement gives Takata 30 days to pay a $25 million criminal fine and establish a $125 million fund with which to compensate victims. The company also has as many as 12 months in which to allocate payments totaling $850 million among 19 carmakers that have been recalling about 70 million Takata airbag inflators in the U.S. If Takata finalizes a financial backer before then, it must make those payments within five days of an agreement.

The U.S. Dept. of Justice and Takata recommend the victim compensation program be headed by compensation attorney Jeffrey Feinberg. He handled similar programs for the victims of the 911 terrorist attacks and General Motors Co.’s defective ignitions switches.

The settlement was announced in Detroit late Friday. It came few hours after a federal grand jury indicted three former Takata executives on charges of criminal wire fraud and conspiracy. They face charges of falsifying inflator performance data to the company’s carmaker customers.