Takata has officially pleaded guilty to criminal wire fraud for covering up the engineering defects in its airbag inflators that have led to at least 17 deaths and the biggest recall in automotive history. The guilty plea follows, by a little more than a month, a Justice Department announcement that Takata had agreed to a $1 billion settlement, including $850 million to compensate automakers for repairs, $125 million for a victim settlement fund, and a $25 million criminal fine.
Three Takata executives also have been charged with fraud. Several lawyers suing Takata on behalf of alleged individual victims are raising objections to the settlement, as the Detroit Free Press and the Detroit News reported, claiming that the automakers will be able to dodge responsibility even though they knew about Takata’s defective airbags and continued to install them in new cars. In their court filing, the lawyers state that “The evidence plaintiffs already have collected in this litigation establishes that the automotive defendants, staffed with teams of sophisticated engineers, were far from innocent, unsuspecting victims, as they now claim to be.” One objection stems from a lawsuit filed against Toyota, Honda, Nissan, Ford, and BMW, according to Automotive News. It was filed Monday in Miami, where at least 134 lawsuits against Takata are pending in the U.S. Judicial Panel on Multidistrict Litigation.
Lawyer Kenneth Feinberg will challenge the victim fund, as he did for claimants damaged by defective General Motors ignition switches and the September 11 and Boston Marathon terrorist attacks. Takata is reportedly engaged in talks with a Chinese-owned parts supplier based in Detroit, Key Safety Systems, either to have that company take over the business or become an investor, according to Automotive News. Takata is facing unspecified billions in fiscal losses as it attempts to hurdle the automotive industry’s biggest ever recall.
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