Takata agreed to pay the billion dollar fine and they will plead guilty to a single criminal charge. The company will pay a fine of $25 million and $125 million to people injured by the exploding airbags. Takata will also pay $850 million to the car-makers that used them, the U.S. Justice Department said.
The faulty airbags have been linked to more than 100 injuries worldwide and to at least a dozen deaths. Most major car makers have been affected and over 70 million Takata airbags have been recalled around the globe.
Takata will be required to make reforms. It will also be placed on probation and an independent monitor will oversee it for the next three years.
A federal judge in Detroit still needs to approve the settlement. The settlement may help Takata win financial backing from an investor to help it restructure and pay for the liabilities from what is currently the largest automotive safety recall to date.
Shigehisa Takada, the chairman and chief executive of Takata, released a statement and said that the agreement is a major step towards resolving the airbag issue. Takada said it was a milestone in the ongoing process to secure investment in the company. He also said Takata regretted the circumstances that led to the situation.
In 2000, Takata started to submit false test reports to automakers to induce them to buy airbag inflators, which were faulty. Takata made over a billion dollars on the sale of the inflators and executives at the company fabricated test information about their performance.
Three longtime Takata executives, all Japanese citizens, were indicted by a federal grand jury. The three execs were Shinichi Tanaka, Hideo Nakajima, and Tsuneo Chikaraishi. The three were indicted on wire fraud and conspiracy charges.
