Takata expected to pay $1 billion in U.S. settlementReprints
(Reuters) — Japan's Takata Corp. is expected to agree to plead guilty to charges as early as Friday as part of a $1 billion settlement with the U.S. Justice Department to resolve a government investigation into deadly airbag ruptures, sources said.
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, as well as an independent monitor of the Japanese auto parts manufacturer.
The company is poised to plead guilty to wire fraud charges, or providing false test data to U.S. regulators. In 2015, Takata admitted in a separate $70 million settlement with U.S. auto safety regulators that it was aware of the inflator defect but did not issue a timely recall.
It admitted it provided the regulator, National Highway Traffic Safety Administration (NHTSA), with "selective, incomplete or inaccurate data" dating back at least six years and also provided automakers with selective, incomplete or inaccurate data.
The wire fraud charge is expected to be filed in U.S. District Court in Detroit. The Justice Department is considering naming Ken Feinberg, a long-time compensation adviser, to oversee the Takata settlement funds. He declined to comment Thursday.
The settlement is expected to include restitution to some victims and automakers, who have been forced to recall vehicles with the defective inflators.
Takata spokesman Jared Levy declined to comment.
The company's airbag inflators have been linked to at least 16 deaths worldwide, including 11 U.S. deaths — nearly all in Honda Motor Co. vehicles. Regulators have said recalls would eventually affect about 42 million U.S. vehicles with nearly 70 million Takata airbag inflators, making this the largest safety recall in U.S. history.
Takata is seeking a financial investor to help pay for huge liabilities and potentially restructure to cope with massive liabilities from the world's biggest auto recall.
The Wall Street Journal reported that Takata is expected to agree to come up with the $1 billion within a year or when it secures a financial backer.
The faulty inflators may explode with excessive force, launching metal shrapnel at passengers in cars and trucks. Many of those killed were involved in low-speed crashes that they otherwise may have survived, including a 17-year-old high school senior in Texas killed last year.
In November 2015, Takata agreed to pay a $70 million fine for safety violations with U.S. auto safety regulators and could face deferred penalties of up to $130 million under a settlement with the NHTSA.
The agency named a former U.S. Justice Department official to oversee the Takata recalls and the company's compliance with the safety settlement.
Last month, NHTSA said it would press the auto industry to accelerate the pace of replacements for defective Takata airbag inflators and signaled a likely widening of the industry's largest recall. Only about one third of inflators recalled to date has been replaced, leaving tens of millions to be fixed.
In June, NHTSA warned that Takata airbag inflators on more than 300,000 unrepaired recalled Honda vehicles showed a substantial risk of rupturing, and urged owners to stop driving the "unsafe" cars until the issue has been fixed.