Medical Malpractice and Personal Injury Law Blog

Takata Corporation to Pay $1 Billion to Victims, Automakers for Massive Airbag Coverup

Posted by Charles Gilman | Jan 26, 2017 | 0 Comments

This January, the Takata Corporation, a company responsible for the production of deadly airbags installed in millions of cars across the United States, plead guilty to criminal wrongdoing and will pay $1 billion to automakers, a victim compensation fund, and as criminal fines.

The Takata airbag scandal has been an ongoing drama since 2008 when Honda first recalled 4,000 vehicles. Since then, 19 automakers including GM, Toyota, and Ford have recalled a total of 42 million vehicles globally which utilized airbags manufactured by the Japanese company Takata, making it the largest recall in US history. The airbag inflators are defective, which allows the airbag to explode randomly while the car is in operation. Furthermore, the inflators can rupture, sending metal shards like shrapnel through the interior of the car. This dangerous design has led to 11 deaths and 184 injuries.

Takata not only admitted that their product was defective, they also revealed that they had been systematically hiding the danger of this component for 15 years. As early as 2000, the corporation submitted false test reports to automakers in order to induce them to buy the airbag inflators. The first death in the United States associated with this defect occurred in 2009 when a teenager in Oklahoma was killed by the exploding airbags in her 2001 Honda Accord. Automakers have repeatedly settled lawsuits for undisclosed amounts while expanding recalls as more injuries and deaths occur.

US attorney Barbara McQuade said of Takata in a Detroit news conference, “They falsified and manipulated data because they wanted to make profits on their air bags." Three former Takata executives in particular have been indicted and charged with criminal activity including wire fraud and conspiracy for their role in the coverup. McQuade added, “Automotive suppliers who sell products that are supposed to protect consumers from injury or death must put safety ahead of profits."

Of the $1 billion, $850 million is set to go to automakers to compensate them for the cost of recalling and repairing millions of vehicles, which they have one year to pay. Takata has 30 days to fulfill the required $125 million that will go to a victim compensation fund and the $25 million in criminal fines.

Independent auto analyst Maryann Keller noted her opinion on the court's verdict: “There is little positive for Takata from the announcement, though the $1 billion fine is less than I would have expected in what is now the largest recall in the history of the auto industry.” We may wonder if this is the end of the lengthy saga and horrific trauma associated with the defective product.

Corporate liability is a complicated issue, and lawsuits against companies often require an experienced personal injury lawyer to understand the best way to approach a case. If you have been injured or a loved one has been killed as a result of an unsafe product, you may be entitled to compensation. Call the offices of trial attorneys Charles Gilman and Briggs Bedigian today at 800-529-6162 or contact them online. The firm handles cases in Maryland, Pennsylvania, and Washington, D.C.

About the Author

Charles Gilman

As managing partner and co-founder of Gilman & Bedigian, it is my mission to help our clients recover and get their lives back on track. I strongly believe that every person who is injured by a wrongful act deserves compensation, and I will do my utmost to bring recompense to those who need and deserve it.

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