An airbag maker is paying $1 billion after admitting fraud

Most of the money will pay back car companies for the cost of the biggest recall in automotive history.

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.

Next Up

Byron Buxton

Extending Byron Buxton is an investment worth the risk

Buxton's value to the Twins exceeds some of their previous big contracts.

Screen Shot 2021-08-03 at 7.50.23 AM

Hunt for man wanted for murder of 20-year-old woman in Austin

The victim has been identified as Tyesha Tahne Gills.

police tape, crime scene

Police say man shot dead after dispute in north Minneapolis

The shooting happened at a residence along North Dupont Avenue.

Screen Shot 2021-07-30 at 10.55.37 AM

Bespoke office space for changing times, courtesy of Redbrick Commercial Real Estate

Redbrick Commercial Real Estate specializes in innovative and sustainable office spaces.

coronavirus, covid-19, icu

MN up to 45 counties with high or substantial COVID-19 transmission

Delta is leading to more cases – and more severe cases – involving children in other states.

Screen Shot 2021-05-23 at 9.08.48 AM

University of St. Thomas latest to require vaccines for students, staff

The college had previously offered incentives to get vaccinated, but is now mandating them.

Pixabay - crowd park outdoors CROP

New forecast predicts more than 4 million Twin Cities residents by 2050

The Met Council believes job opportunities will also steadily grow.

Mike Zimmer

Zimmer on unvaccinated players: 'Some of the things they've read are just, woof, out there'

The coach says he's doesn't understand why some players won't get vaccinated.


Polaris gets $27M fine over off-road vehicle recalls

Oh – and it's just recalled another 1,000 vehicles.

Heard about 'slack fill'? It's why the makers of Raisinets are getting sued

The lawsuit says consumers are tricked into thinking the box is full

1 million Samsung Notes officially recalled after dozens burst into flames

Safety authorities have officially recalled one million Samsung Galaxy Note7s, after owners reported burns and property damage caused by overheated batteries.

Hyundai recalls 63,000 cars because sunroofs could fly off

The recall affects 2015-2016 Hyundai Sonatas with panoramic sunroofs.

MN company accused of giving doctors luxury vacations will pay $12M

Feds say the MN company took doctors on luxury vacations

Hear that hybrid comin'? New electric cars will have to make noise

A new rule aimed at improving pedestrian safety says electric cars in the U.S. will have to make a sound

Don't let these Easter eggs hatch; they've been recalled by Target

If the toys were swallowed by a child, it could be life-threatening.