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Takata Agrees to Plead Guilty & Pay $1 Billion as Massive Recall Expands

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Takata to Pay $1 Billion as Massive Recall Continues to Expand

The largest automotive recall in U.S. history continues to grow as regulators say more than 20 million dangerous Takata airbag inflators remain on American roads.  It is now estimated that 42 million vehicles, equipped with around 70 million defective Takata inflators, will be recalled in the U.S alone. In an agreement with the Department of Justice (DoJ), Takata Corporation, a Japanese airbag and seatbelt manufacturer, has agreed to plead guilty to criminal charges for fabricating documents to hide the fact that millions of their inflators could turn into lethal threats, and for committing wire fraud.

“They falsified and manipulated data, because they wanted to make profits on their airbags, knowing they were creating risk for the end-users,” said Barbara L. McQuade the U.S. district attorney.

Three Takata executives have been named by the DoJ in connection to the illegal activity going back 17 years; Shinichi Tanaka, Hideo Nakajima, and Tsuneo Chikaraishi. In a released 2015 email Nakajima, a former research director, wrote “they had no choice but to manipulate the test data.” All three are believed to be in Japan, but they could be extradited to face their alleged crimes in the U.S. despite their protection as Japanese citizens because of a precedent. Three of the company’s former employees were sent to the U.S. in 2013 to face charges over a seatbelt price-fixing scheme.

“Corporations and individuals who cheat will be held accountable,” said McQuade. “Cheaters will not be allowed to gain an advantage over those who play by the rules.”

 

Automotive Executives Say $1 Billion May Be Too Low

 

In addition to the charges, Takata has agreed to a $1 billion financial settlement with the U.S. government, affected owners, and the automakers, who have been paying for the ongoing recall. The financial details are pending the review of a judge, who will make sure that $1 billion is sufficient. Some executives in the automotive industry say that the number is nowhere close to where it needs to be. Others are worried that Takata will not be able to afford the payments in addition to the costs of the parts needed for the recall, now linked to 11 deaths and more than 180 injuries in the U.S. (and at least five more deaths internationally).

“Reaching this agreement is a major step towards resolving the air bag issue and a key milestone in the ongoing process to secure investment,” said Shigehisa Takada, the CEO of Takata, almost one year after offering to resign from his position. “Takata deeply regrets the circumstances that have led to this situation and remains fully committed to being part of the solution.”

U.S. officials stated that a $25 million criminal fine must be paid within a month, but the $850 million allocated to the automakers, and $125 million promised to the consumers who sustained injuries, or the relatives of individuals who died, are not due until Takata sells and the payments can be afforded. In addition, several personal lawsuits have been settled out of court with victims and more are believed to be pending.

This is not the first settlement between Takata and U.S. authorities over their faulty inflators. In 2015, Takata paid $70 million to regulators because they allegedly knew about the hazardous inflator defect long before informing authorities. Takata admitted to the National Highway Traffic Safety Administration (NHTSA) that they provided “selective, incomplete or inaccurate data.” Takata may also owe an additional $130 million for deferred penalties brought by the NHTSA.

 

Takata Recalls Continue – 2.1 Million Vehicles Added

 

Takata executives have seen U.S. recalls expand in the past two weeks; Ford, Honda and Toyota have all recalled more vehicles, collectively an additional 2.1 million. Of the 19 affected automakers around the globe, Honda has been hit the hardest. The vast majority of deaths and injuries have been sustained in a Honda and the NHTSA warned in June that more than 300,000 extremely unsafe Honda’s were still on the road. Of the most dangerous are Honda’s 2001 to 2003 Civic, Accord, CR-V, Odyssey, Pilot, and 2002 to 2003 Acura TL and CL vehicles.

This week, after news that courts may become involved in a mediated buyout or bankruptcy, Takata’s shares dropped more than 17 percent in one day after the company rebounded 150 percent in the past two months. Takata is in the middle of trying to sell the majority stake in their company, but with the ongoing recalls the new owner may be liable to cover billions in recall expenses. For that reason, potential buyers have been reportedly pushing for a court mediated turnaround or bankruptcy against the wishes of Takata, because the price will be lowered and they can limit the risks related to the recall.

To see if your vehicle has been recalled please visit: http://consumerwatch.com/vehicle-recall-checker-by-vin-check-vehicle-recalls/

VW Emissions Scandal Update; $4.3 Billion Settlement, Six Executives Indicted

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VW Emissions Scandal Update; $4.3 Billion Settlement, Six Executives Indicted The second week of January was not kind to Volkswagen (VW). The German automaker has agreed to plead guilty to charges brought by U.S. Authorities, including conspiracy to commit wire fraud, deceiving U.S. consumers, and violating the Clean Air Act. The guilty plea came with […]

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Mercedes Recalls 47,799 Vehicles; SUV Airbags Could Fail in Crash

Vehicle Recalls, NHTSA, Mercedes Recalls, Benz Recalls

Mercedes Recalls 47,799; SUV Airbags Could Fail in Crash A glitch in the Mercedes-Benz Occupant Classification System (OCS) software found in 47,799 of their SUVs, has led the German luxury automaker to announce their first recall of 2017 in conjunction with the National Highway Traffic Safety Administration (NHTSA). According to U.S. authorities, faulty sensors in the […]

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Polaris Recalls Continue; 9,900 ATVs Pose Fire Risk, Could Leak Gas

Polaris Recalls, Polaris ATV Recalls, Polaris Gas Leaks

Polaris Recalls Continue; 9,900 ATVs Pose Fire Risk With two days left in 2016 Polaris Industries, a publicly traded U.S. manufacturer announced the recall of 9,900 all-terrain vehicles (ATVs) over concerns that they can potentially leak fuel and go up in flames. Persistent fire safety concerns have forced Polaris, in conjunction with the U.S. Consumer […]

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Honda Recalls 690K Odyssey Minivans; Seats Deemed Unstable

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Minivan Seats Deemed Unstable; Honda Recalls 690K Vehicles At the end of December Honda recalled 686,463 Odyssey minivans in North America over concerns that the second-row seats can come loose in an accident. Some consumers have even reported to the National Highway Traffic Safety Administration (NHTSA) that they have experienced their seats shifting while simply […]

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Volkswagen Emission Scandal Close to Latest Billion Dollar Settlement

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Volkswagen Close to Latest Billion Dollar Settlement Covering 83,000 Vehicles Details of the next chapter in Volkswagen’s (VW) diesel emission cheating scandal have surfaced, raising the current estimated cost to $17.5 billion in the United States alone. The Environmental Protection Agency (EPA) said that this latest settlement, between VW and 83,000 owners of their 3.0L […]

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Toyota Recall Vehicles Still Experiencing Problems After Repairs

Since October 2009, Toyota has announced five recalls stemming from complaints of sudden unintended acceleration caused by several factors in multiple models and year vehicles, as well as issues with brake systems. After meetings between Toyota’s President Akio Toyoda and global governments, the world’s leading automobile manufacturer has been making great strides in correcting the problems and reaffirming that the Toyota brand is worthy of the trust and quality recognition it has long been awarded.






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Honda announces another recall for 400,000 Odysseys

This week, Honda issued a recall of over 400,000 vehicles due to a brake problem. These models include the 2007 and 2008 Honda Odyssey minivans and Honda Element small trucks. Approximately 344,000 Odysseys and 68,000 Elements are involved in the recall. According to the company, the brakes may become soft due to inadequate sealing which allows air to intrude the mechanism. While only a minute amount of air may enter the mechanism, over time this quantity of air will compound, resulting in a “soft” or “low” brake pedal.






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Toyota recall issues lead to fourth wrongful death lawsuit

A single-vehicle crash that occurred in 2007 has sparked the fourth wrongful death lawsuit against Toyota in conjunction with the string of recent recalls by the world’s leading automobile manufacturer. Tyrene Livingston was driving to her internship on October 26, 2007, when a defect in her car’s electronic throttle system allegedly caused the car to drive across three lanes of traffic, through a barrier and into some woods. The 21-year old college student suffered severe injuries that proved to be fatal.






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Toyota under federal investigation as Corolla recall looms

After announcing a fourth recall of more than 7,300 2010 Camry vehicles, Toyota is now under U.S. federal investigation after the National Highway Traffic Safety Administration declared that an investigation might be forthcoming and necessary for 2009 and 2010 Toyota Corollas. More than 150 complaints have been registered about these late model vehicles having issues with uneven and shaky steering.






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