DETROIT – Takata agreed to plead guilty to wire fraud and pay a total of $1 billion in criminal penalties related to the sale of defective air-bag inflaters, the U.S. Department of Justice said Friday.
A federal grand jury also indicted three former Takata employees on charges of wire fraud and conspiracy, accusing them of concealing defects in the company’s air bag inflaters.
“Automotive suppliers who sell products that are supposed to protect consumers from injury or death must put safety ahead of profits,” U.S. Attorney Barbara McQuade in the Eastern District of Michigan said in a statement. “Cheaters will not be able to gain an advantage over good corporate citizens who play by the rules.”
Shinichi Tanaka, Hideo Nakajima and Tsuneo Chikaraishi are charged with one count of conspiracy and five counts of wire fraud related to concealing from Takata’s automaker customers that the inflaters did not perform up to customers’ specifications. Tanaka’s former title with the company was executive vice president of global operations; Nakajima was director of engineering at Takata’s automotive systems lab; and Chikaraishi was chief of Japan Asia air bag inflater operations.
“Reaching this agreement is a major step towards resolving the air-bag inflater issue and a key milestone in the ongoing process to secure investment in Takata,” Takata Chairman Shigehisa Takada said in a statement. “Takata deeply regrets the circumstances that have led to this situation and remains fully committed to being part of the solution.
“We have taken aggressive actions to address past reporting lapses and will continue to work closely with regulators and our automotive customers to address the ongoing recalls and implement new technologies that advance vehicle safety, prevent injuries and save lives.”
As a result of Takata’s defective inflaters, the National Highway Traffic Safety Administration is in the middle of the largest ever recall, covering 42 million vehicles (69 million inflaters) covering more than 12 automakers.
“For more than a decade, Takata repeatedly and systematically falsified critical test data related to the safety of its products, putting profits and production schedules ahead of safety,” said Andrew Weissman, chief of the Justice Department’s fraud section.
Takata air bag inflaters can explode with too much force, spraying shrapnel into drivers and passengers. The defect has been connected to 16 deaths worldwide, 11 of them in the U.S., and more than 180 injuries.
McQuaid said Takata knew since at least the early 2000s that certain ammonium nitrate-based inflaters were not performing to the specifications required by the auto manufacturers.