Takata Airbag Recall: US Prosecutors In Talks With Manufacturer Amid Increasing Recalls

The Department of Justice is in talks with Takata Corp. to resolve criminal wrongdoing allegations against the Japanese airbag manufacturer. Over the last few months, Takata has issued massive recall orders across the world because of its defective inflators that have caused multiple deaths.

The company’s airbag inflators contain ammonium nitrate that can deteriorate over time when exposed to moisture and high temperatures. The defective airbags lack a chemical drying agent that prevents them from getting damaged. Excessive internal pressure in the defective airbags can cause the inflators to burst, causing metal fragments from inside to puncture the airbag and the spray of metal pieces leading to injury or death.

The defective airbags have been linked to at least 14 deaths and more than 100 injuries have been reported worldwide.

People familiar with the matter told the Wall Street Journal that prosecutors are awaiting a proposal from the company on how to resolve an anticipated criminal case. There is no exact time frame available for a settlement to be reached, they added.

Even though the airbag manufacturer is expected to face a financial penalty under the settlement, no amount has been ascertained and the sources said that prosecutors will keep in mind that Takata is already under great financial pressures from the recalls.

The National Highway Traffic Safety Administration fined Takata $70 million in November for failing to issue an alert to the regulators regarding the defects in time.

While almost 70 million Takata airbags have been recalled in the U.S. alone, the number across the world stands at around 100 million. In the latest round of recalls, South Korea announced Wednesday recall of about 110,000 vehicles from 13 companies including Honda, Toyota, BMW and Audi, Reuters reported.

The country’s transport ministry said a total of 221,870 vehicles have faulty Takata airbags. Four automakers, including General Motors and Mercedes-Benz, are yet to announce their respective recall plans across the world.

At the same time, Takata is looking at private-equity firms or automotive suppliers for a cash infusion that will help the company achieve a surer financial footing as it tackles the mounting recall costs.