|Lawyers for victims and their families suing air bag maker Takata Corp. and five automakers allege the car companies knew Takata’s air bags were dangerous yet continued to use them for years because the devices were inexpensive and they had a desire for uninterrupted revenues in the billions.
“They were focused on the low price of Takata’s inflators and concerned that if they stopped using (them), they might not have a sufficient supply, which would prevent them from selling vehicles and generating billions of dollars in revenue,” said a status report filed Monday in Miami by lead plaintiff attorney Peter Prieo.
The allegations against Honda, Toyota, Nissan, Ford and BMW were made on the same day the Japanese auto supplier will be in a Detroit courtroom to plead guilty to wire fraud and pay $1 billion in criminal penalties stemming from the company’s fraudulent conduct related to sales of defective air bag inflators.
In the court filing, Prieo cited specific examples of evidence from Honda, Toyota, Ford, Nissan and BMW, including an allegation that Ford chose Takata’s inflators over the objections of Ford’s own inflator expert.
The federal court in Miami is handling pretrial evidence-gathering in dozens of lawsuits against Takata and the automakers. The filing says the allegations are partly based on auto company documents.
Earlier, the automakers had contended that Takata was the problem because it admitted to covering up the defective inflators, which can blow apart and hurl shrapnel into drivers and passengers. In the court filing, plaintiffs lawyers allege that the automakers were “far from innocent” in the case, and that they had independent knowledge that Takata’s air bag inflators were unsafe before putting them in millions of vehicles.
“The automotive defendants were aware that rupture after rupture, both during testing and in the field, confirmed how dangerous and defective Takata’s air bags were,” the attorneys allege in the court document, called a “status report.”
Messages were left Monday morning for all five automakers. Toyota declined to comment.
Takata’s air bag inflators can explode with too much force, hurling shrapnel into drivers and passengers. The inflators are blamed for at least 16 deaths worldwide and more than 180 injuries. The problem touched off the largest automotive recall in U.S. history involving 42 million vehicles and 60 million inflators.
Unlike most other air bag makers, Takata uses the explosive chemical ammonium nitrate to inflate air bags instantly in a crash. But the chemical can deteriorate when exposed to prolonged airborne moisture.
Federal prosecutors in Detroit reached a settlement with Takata — one of the world’s largest suppliers of automotive safety equipment — after a 25-month international investigation into the Tokyo-based company’s faulty air bags that have been linked to at least 17 deaths.
Three former Takata executives have been indicted on wire fraud charges. The indictments are part of a criminal resolution between U.S. regulators and the Japanese air bag maker.
Takata has agreed to implement rigorous internal controls, retain a compliance monitor for three years and cooperate fully with the department’s ongoing investigation.
Under the terms of the plea agreement, $125 million of the fine will be used for injured individuals who haven’t reached separate settlements while $850 million will be made available to automakers for air bag recall and replacement costs.
The remaining $25 million is a fine in the case. A court-appointed special master will oversee administration of the $975 million in restitution funds. Both sides agreed to recommend Ken Feinberg to serve as special master.
That appointment will need judicial approval by U.S. District Court Judge George Caram Steeh.
Closure with the Justice Department wraps up the criminal portion of Takata’s auto safety recall, which was the largest in history, and allows it to proceed with its hunt for a buyer.
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