Takata to pay $1 billion to settle U.S. air bag probe: sources

Thu Jan 12, 2017 9:14pm EST
 
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By David Shepardson

NEW YORK (Reuters) - Japan's Takata Corp (7312.T: Quote) is expected to plead guilty to criminal wrongdoing as early as Friday as part of a $1 billion settlement with the U.S. Justice Department over its handling of air bag ruptures linked to 16 deaths worldwide, 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.

The settlement also calls for an independent monitor of the Japanese auto parts manufacturer. It could help Takata win financial backing from an investor to potentially restructure and pay for massive liabilities from the world's biggest auto safety recall.

The company is poised to plead guilty to wire fraud, or providing false test data to U.S. regulators, according to the sources, who were not authorized to discuss the settlement publicly.

In 2015, Takata admitted in a separate $70 million settlement with U.S. auto safety regulators that it was aware of a defect in its air bag inflators but did not issue a timely recall.

It admitted it provided the regulator, the 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 longtime compensation adviser, to oversee the Takata settlement funds. He declined to comment on Thursday.

The settlement is expected to include restitution to some victims and automakers, who have been forced to recall vehicles with the defective inflators. Honda Motor Co (7267.T: Quote) and Takata have settled nearly all lawsuits filed in connection with fatal crashes. The recall impacts 19 automakers including Ford Motor Co (F.N: Quote), General Motors Co (GM.N: Quote), Toyota Motor Corp (7203.T: Quote), Volkswagen AG (VOWG_p.DE: Quote) Fiat Chrysler Automobiles NV (FCHA.MI: Quote).   Continued...

 
A logo of Takata Corp is seen with its display as people are reflected in a window at a showroom for vehicles in Tokyo, November 6, 2015. REUTERS/Toru Hanai/File Photo