Japanese supplier Takata plead guilty to fraud in Detroit today and agreed to pay a $1 billion fine to the U.S. government.
Takata, which provides automakers with airbags and other safety systems, used ammonium nitrate to infalte its airbags. However the substance can deteriorate when exposed to moisture and become more volatile, a fact employees of Takata knew as early as 2000.
Chief financial officer for Takata, Yoichiro Nomura, admitted that employees altered test data to hide the fact that its airbags may pose a threat to drivers in the event of an accident. It then sold its airbags to automakers – an easy proposition as the use of ammonium nitrate much helped Takata offer its airbags at a lower price than the competition.
“The conduct leading to today’s plea was completely unacceptable,” Nomura said. “I would like to sincerely apologize on behalf of Takata. The actions of certain Takata employees to undermine the integrity of the company’s testing data and reporting to customers were deeply inappropriate.”
“Takata knew certain inflators had sustained failures, including ruptures, during testing,” Nomura’s attorney added. “In order to deceive customers, Takata provided them with false information.”
The $1 billion fine will be split up to benefit those affected by the faulty airbags, which were linked to 16 deaths globally. The smallest chunk will go toward a $25 million criminal fine, with another $125 million to be put into a compensation fund for victims. The largest bit, $850 million, will be paid to the automakers Takata defrauded. The money for the victims fund will come out of Takata’s pocket, while the $850 million find will be funded through the sale of Takata to another company. Key Safety Systems Inc., located in in Sterling Heights, Michigan, is rumored to be interested in purchasing the embattled Japanese company.
The Fiat Chrysler vehicles with Takata’s faulty airbag include: 2007-2009 Chrysler Aspen, 2005-2012 Chrysler 300, 2006-2007 Chrysler Crossfire, 2005-2010 Chrysler SRT8, 2008-2012 Dodge Challenger, 2006-2012 Dodge Charger, 2005-2011 Dodge Dakota, 2004-2009 Dodge Durango, 2005-2008 Dodge Magnum, 2003-2009 Dodge Ram 1500, 2003-2009 Dodge Ram 2500 , 2003-2010 Dodge Ram 3500, 2008-2010 Dodge Ram 4500 chassis cab and 2008-2010 Dodge Ram 5500 chassis cab.