Takata Agrees to $1B in Penalties Over Air Bag Scandal

As expected, Japanese auto parts maker Takata Corp. pleaded guilty to fraud Monday and agreed to pay $1 billion in penalties for concealing an air bag defect blamed for at least 16 deaths, most of them in the US. The scandal, meanwhile, seemed to grow wider when plaintiffs' attorneys charged that five major automakers knew the devices were dangerous but continued to use them for years to save money. In pleading guilty, Takata admitted hiding evidence that millions of its air bag inflators can explode with too much force, hurling lethal shrapnel into drivers and passengers. Chief financial officer Yoichiro Nomura spoke on behalf of the Tokyo-based company, saying the conduct was "completely unacceptable," the AP reports. Penalties in the criminal case include $850 million in restitution to automakers, $125 million for victims, and $25 million for the US government.

Plaintiffs in dozens of lawsuits over the defect charged in court papers filed Monday in Miami that Honda, Toyota, Nissan, Ford, and BMW had independent knowledge that Takata's air bags were unsafe before putting them in millions of vehicles. After an inflator ruptured in 2009, one of the auto companies described the problem as "one in which a passenger protection device was transformed into a killing weapon," the court filing said. The company was not identified. The filing marks the broadest allegation yet that automakers knowingly put their customers in danger. "The automotive defendants were aware that rupture after rupture, both during testing and in the field, confirmed how dangerous and defective Takata's air bags were," the plaintiffs' attorneys said. The auto companies have asserted that they were deceived by Takata and shouldn't be held liable. (More Takata stories.)