Takata victims to receive $9.8M in first round of restitution payouts

Keith Laing
The Detroit News

Washington — Drivers of cars with faulty air bags designed by the former Takata Corp. will receive nearly $9.8 million from the restitution fund that was established as part of  the Japanese supplier’s guilty plea for producing millions of defective air-bag inflators that can explode with deadly force.

The United States District Court in the Eastern District Of Michigan said Tuesday that the first round of payments that would go to 102 recipients would range from a high of $608,013 to a low of $643.40.

This June 25, 2017, photo shows a sign for TK Holdings Inc. in Auburn Hills, Mich. Federal officials say they’re exploring new ways to reach out to car owners to get more people to participate in the Takata air bag recall.

The payments were calculated using a formula that awarded points worth $64.34 each to drivers who filed claims about suffering injuries due to the faulty Takata airbags. The court said points were assigned by a special master appointed to oversee the restitution fund “based on injury categories in an injury valuation matrix and certain other factors.”

The recall of Takata air bags has spread to nearly 13 percent of the total number of registered vehicles in the United States. Exploding Takata air-bag inflators have been linked to at least 16 deaths and more than 250 injuries in the United States, according to NHTSA. At least 24 people have died worldwide.

The payouts follow the recall of nearly 70 million Takata Corp. air bags, which is the largest automotive safety recall in U.S. history.

The Japanese air-bag manufacturer, which has since been sold to Chinese-owned Key Safety Systems that is headquartered in Sterling Heights, was required to plead guilty to wire fraud and pay nearly $1 billion in criminal penalties stemming from the company’s fraudulent conduct related to sales of defective air bag inflators.

Under the terms of the company’s agreement with federal regulators, $125 million of the fine will be used for injured individuals who haven’t reached separate settlements while $850 million will be made available to automakers for air bag recall and replacement costs. The remaining $25 million is a fine in the case.

As propellant in the Takata inflators ages, especially in humid conditions, it can become unstable and explode with too much force. That can cause the inflators to rupture and throw metal shrapnel at drivers and passengers.

The National Highway Traffic Safety Administration says only 31.8 million of the 50 million air bags recalled by June 7 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.

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.


Twitter: @Keith_Laing