Car Companies Settle Takata Airbag Lawsuit for $553 Million

Four carmakers will pay $553m to settle claims over Takata airbags
Toyota, Subaru, Mazda and BMW settle suit over Takata air bags

20 May, 2017

Four automakers agreed to a $553 million settlement to address class-action economic loss claims covering owners of almost 16 million recalled vehicles with potentially defective Takata airbag inflators, court documents filed on Thursday showed. Four automakers including Toyota and BMW agreed yesterday to pay US$553 million (RM2.39 billion) to settle a U.S. lawsuit over the defective Takata airbags blamed for 11 deaths in the United States alone. The settlements will be supervised by a court-appointed administrator, if approved by a Florida-based judge. The company agreed to pay $1 billion in penalties, including funds for people injured as a result of the air bags, which have been linked to at least 16 deaths globally. By 2019, auto makers would have recalled 64-million to 69-million U.S. inflators in 42-million vehicles, regulators said in December. Given the size, scope and severity of the Takata recall, these automakers are the first to agree to a settlement structure to fund consumer outreach, rental car/loaner programs and out-of-pocket cost reimbursement. Additionally, compensation will be provided to class members who suffered economic losses as a result from the Takata airbag recall, such as auto rentals.

The settlement and the case will help Takata's potential buyer to assess potential liabilities, and could help facilitate other carmakers sued in class actions to reach similar agreements.

BMW, Mazda, Subaru and Toyota (the automakers) today announced agreements to resolve economic loss claims in the Takata multidistrict litigation (MDL) in the United States.

Between the four automakers, approximately 15.8 million vehicles were fitted with the Takata airbag systems. The automakers agreed to provide rental cars to owners most at risk, including those with older vehicles or living in humid areas like the Southeast or Hawaii.

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Owners of almost 16-million vehicles made by Toyota, Subaru, BMW and Mazda are eligible for compensation.

The potentially defective airbags, which can spray shrapnel into occupants, are on more than 42 million vehicles worldwide. Ford, Honda and Nissan have yet to reach similar agreements. Honda at the time said the allegations made false assertions that it and other auto makers behaved irresponsibly despite Takata admitting to deceiving the Japanese auto maker and other vehicle companies.

In January, Takata agreed to plead guilty to US charges of criminal wrongdoing and to pay $1 billion to resolve a federal investigation into its inflators.

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