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Serious Airbag issue might cost $1 billion

By, 2017-01-02


Takata Company, a leader in manufacturing vehicles air bags, have been linked to 11 deaths in USA. Takata could now settle the criminal charges with the USA Department of Justice by paying just over $1 billion as a penalty.


A major part of a settlement would include Takata pleading guilty to criminal misconduct. The Justice Department in USA has investigated whether Takata hid information from safety regulators and issued misleading statements about the problems posed by the air bags they manufacture.


Takata air bag inflators have caused at least 16 deaths worldwide, 11 of which happened in USA alone. The air bags were also the reason of over 100 serious injuries. The inflators can explode with excessive force and send metal shrapnel inside vehicles. Car manufactures are required to recall about 42 million vehicles with Takata air bag inflators, which will make this the largest safety recall in history.


In addition to the criminal misconduct charges, prosecutors at the US Justice Department may also try to hit the company with wire fraud, claiming Takata faked test information and intentionally hid information about the dangerous airbags. While the settlement is not finalized yet, sources noted that Takata will like be allowed to pay part of the penalty up front and spread the rest out over time.


The final cost of this penalty on Takata is not yet confirmed but it could range anywhere from the "high hundreds of millions" up to a billion and the Justice Department in USA is eager to wrap up the case this month before the new administration takes over on 22nd January.


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