An airbag maker is paying $1 billion after admitting fraud
A Japanese company whose name is linked with faulty airbags will pay $1 billion after pleading guilty to fraud in a U.S. court.
The Justice Department announced Monday evening that a judge sentenced Takata to the billion dollar payment.
What did they do?
In its guilty plea, Takata admits it tampered with the results of the safety tests on its airbag inflators to make it look like they were safe, when they actually weren't.
Prosecutors say this went on for 15 years (from 2000 through 2015) and even after there were injuries and deaths connected to the defective airbags, company executives kept hiding the real test results from their customers.
“Takata abused the trust of both its customers and the public by allowing airbag inflators to be put in vehicles knowing that the inflators did not meet the required specifications," acting Assistant Attorney General Kenneth Blanco said Monday.
As NBC News explains, Takata airbags became unstable over time. When that happened, they started to inflate wrong, sending shrapnel flying around the inside of the car. At least 16 people died and more than 100 were injured, the network says
Where does the money go?
Under the sentence handed down Monday, Takata has to set up two funds.
$125 million will be set aside for people who were injured and have not yet reached a settlement. $850 million goes into a different fund to pay back car companies for what they've spent recalling and replacing the defective airbag systems.
There's also a $25 million fine and Takata is on probation for three years.
Is this the end of it?
Not exactly, although Takata would like it to be.
It's been touch and go as to whether the company would be able to stay in business after being at the center of the biggest recall in the history of the automotive industry.
Reuters reports Takata hopes to attract an investor who can get the company off to a fresh start – and they're thinking the guilty plea and payment will help put the episode behind them.
More fallout is possible on a couple other fronts, though.
The feds are still investigating individual executives who were leading Takata, three of whom have already been indicted by the U.S., NBC notes.
Also, there are separate lawsuits against automakers, claiming those companies knew Takata's airbags were not safe but decided to keep using them anyway.
Lawyers handling some of those cases were trying to stop the plea agreement with Takata, Bloomberg reports, arguing that it will make it harder to find the carmakers liable.
