Takata reaches $650 million settlement with 44 states

Keith Laing
Detroit News Washington Bureau

Washington — TK Holdings Inc., the U.S. subsidiary of former Japanese air bag manufacturer Takata, has reached a $650 million settlement with 44 states – including Michigan – in an effort to make amends for producing millions of defective air-bag inflators that can explode with deadly force.

Michigan Attorney General Bill Schuette, who was of the attorneys general who initially sued Takata over the faulty air bags, said Thursday the states are forgoing most of the money “in order to maximize the recovery available to consumers who were the victims of the air bag defect” due to Takata’s bankruptcy and inability to pay its debts.

The faulty air bags have been linked to at least 13 deaths and more than 180 injuries in the United States. Worldwide, 22 have died.

Under the settlement agreement, which was approved by United States Bankruptcy Court for the District of Delaware, TK Holdings will be prevented from advertising or otherwise representing the safety of the air bags “in any way that is false, deceptive, or misleading” or representing “that its air bags are safe unless supported by competent and reliable scientific or engineering evidence.”

The company will also be prohibited from falsifying or manipulating testing data, or “selling any air bag systems using the same phase-stabilized ammonium nitrate as a propellant,” except as needed to fulfill its obligations under recalls.

The settlement follows the recall of nearly 70 million Takata air bags, which is the largest automotive safety recall in U.S. history. The recall of Takata air bags has spread to nearly 13 percent of the total number of registered vehicles in the United States

Earlier this month, United States District Court in the Eastern District Of Michigan said that Detroit automakers will receive $189 million from the restitution fund the former Takata Corp. established as part of its guilty plea for producing millions of defective air-bag inflators. General Motors Co. will receive $90 million, Fiat Chrysler Automobiles NV will get $53.8 million and Ford Motor Co. will receive $45.3 million.

The National Highway Traffic Safety Administration says only 21.8 million of the approximately 50 million air bags recalled by Feb. 2 have been repaired. The defective safety devices from the now-bankrupt Japanese auto supplier were used in 37 million cars, and the problem is expected to grow. Another 20 million faulty air bags in newer cars are expected to be added in the next couple of years. (Go to www.nhtsa.gov/recalls to check if your car has an unresolved recall; you’ll need the 17-character vehicle identification number located at the lower left of your car’s windshield.)

The older the cars get, the higher the risk: Over time, high humidity can cause the propellant that inflates the safety devices to become unstable and explode with too much force during a crash. That ruptures the metal inflator and throws shrapnel at drivers and passengers.


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Twitter: @Keith_Laing