Takata To Pay $1 Billion for Air Bag Inflator Defect

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Japanese auto parts maker Takata Corp. has pleaded guilty to one count of wire fraud, and agreed to pay $1 billion for concealing a defect in millions of its air bag inflators, NPR reports. The case, involving a deal with the U.S. Justice Department, played out in a federal courtroom in Detroit yesterday. At least 11 deaths in the U.S. have been linked to the defective air bags. “For over a decade, Takata lied to its customers about the safety and reliability of its ammonium nitrate-based airbag inflators,” said Acting Assistant Attorney General Kenneth Blanco.

The defects caused the airbags to inflate with too much force and send metal shards into the cabin of the car. The penalties include $850 million in restitution to the car companies and $125 million for victims. Takata’s fine to the government could have been as much as $1.5 billion, but the judge said such a sum probably would put the company out of business.

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