Maker of faulty airbags expected to plead guilty to criminal charges

Japan's Takata Corp pleaded guilty to a felony charge as part of an expected $1 billion deal with the U.S. Justice Department that includes compensation funds for automakers and victims of its faulty airbag inflators

Japan's Takata Corp pleaded guilty to a felony charge as part of an expected $1 billion deal with the U.S. Justice Department that includes compensation funds for automakers and victims of its faulty airbag inflators

Takata's customers have jointly issued the biggest recall in automotive history to rectify the problem.

Company representatives are scheduled to be in U.S. District Court in Detroit Monday afternoon. Japanese auto parts maker Takata Corp. pleaded guilty to fraud and agreed to pay $1 billion in penalties for concealing an air bag defect.

The penalties include $850 million in restitution to automakers, $125 million for victims and families and a $25 million criminal fine. It also has to pay $850 million to compensate auto manufacturers for the cost of the recall within the next year.

Three former Takata executives have been indicted on wire fraud charges.

But when exposed to prolonged high temperatures and humidity, the chemical can deteriorate and burn too fast with the force to blow apart a metal canister.

The federal court in Miami is handling dozens of lawsuits against Takata and the automakers.

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The court filing alleges Honda Motor Co., Toyota Motor Corp., Ford Motor Co., Nissan Motor Co. and BMW AG weighed various degrees of cost ramifications in deciding to purchase Takata air bags and equip them in vehicles, notwithstanding awareness of the dangers they posed.

"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 Blanco. It was an outcome that would have delayed replacing millions of potentially deadly inflators still in cars. Volkswagen is scheduled to appear in court to formally plead guilty, as a company, on March 10.

"When Honda installed Takata's air bag modules in its vehicles, Honda reasonably believed, based on extensive test results provided by Takata, that they were safe", the automaker said.

Automakers have responded by citing Takata's plea agreement, in which the Justice Department says Takata convinced the auto companies to continuing using its inflators "through submission of false and fraudulent reports and other information that concealed the true and accurate test results".

According to the filing, an airbag from Takata was described as a "killing weapon" by one of the manufacturers as early as 2009. Takata also knew that certain inflators had sustained failures, including ruptures, during testing.

Last month, New Mexico Attorney General Hector Balderas' office filed a lawsuit alleging that Takata and 15 automakers that equipped vehicles with the automaker's airbags failed to protect consumers from the unsafe defect that has been linked to 11 deaths.