Japan's Takata Corporation, which pleaded guilty over the improper handling of ruptured airbags that were responsible for 16 deaths worldwide, could be looking at a colossal settlement figure.
According to a report from Reuters, Takata has been charged with a $1 billion fine, which it will need to pay as settlement fee to the Justice Department according to the publication's reliable sources.
"The settlement includes a $25 million criminal fine, $125 million in victim compensation and $850 million to compensate automakers who have suffered losses from massive recalls, the sources said," reveals the publication.
The Settlement
The report also reveals that the settlement asks that Takata be monitored independently. The decision may aid the Japanese company to win backing from investors, so that it can possibly restructure and pay for massive liabilities" it has incurred because of the safety recall.
The recall affected 19 car companies such as Volkswagen AG, Toyota Motor Corp, General Motors Co., Ford Motors Co., and Fiat Automobiles Chrysler, NV.
Sources also share that the company may likely plead guilty to the charges of wire fraud. For the unfamiliar, wire fraud refers to the provision of false data to regulatory authorities in the United States.
Charges for the wire fraud are anticipated to be filed in a district court in Detroit. The Department of Justice is reportedly thinking of tasking compensation adviser Ken Feinberg to oversee the settlement funds of Takata.
Where Does Takata Stand?
For the unfamiliar, the recall of faulty airbag inflators — a whopping 28.8 million before May 2016 — from Takata is considered the biggest in United States' auto history. The recall, which was expanded by 30 million to 40 million as reported by Tech Times, is expected to continue till December 2019.
The auto parts makers' woes are far from over as it is still has to pay $10 billion in liabilities, which it incurred after the recall.
This is not the first time Takata would be shelling out settlement payments. In 2015, the company agreed to pay a hefty $70 million to the National Highway Traffic Safety Association, as it pleaded guilty to being aware of the defect in its airbag inflators.
The company was warned by NHTSA in June 2016, as nearly 300,000 unrepaired recalled vehicles posed a substantial rupture threat. Due to this issue, vehicle owners insisted on stopping the use of unsafe vehicles that were still pending fixes.
In September 2016, reports revealed that Takata failed to inform regulators about an air bag rupture, which occurred in 2003.
Neraly 70 million air bag inflators in the United States and 100 million inflators all over the world, which were made by the company, have been deemed defective. Takata has managed to replace only one third of the recalled inflators, leaving the company with 30 million that require a fix.
Photo: Robin Corps | Flickr
