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Justice Department Set to Smack Takata With $1B Fine

New fine was impact recall efforts.

by on Dec.29, 2016

Takata appears to be ready to accept a $1 billion settlement on criminal charges from the Department of Justice.

Takata may be moving to close another chapter in its troubled history with defective airbags by agreeing to a $1 billion criminal settlement.

The deal with the Justice Department, according to the Wall Street Journal, would not halt the ongoing recall efforts. The Japanese supplier is expected to plead guilty to a variety of charges as part of the deal.

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It is part of the largest automotive recall in history, involving about 42 million vehicles and more than 64 million faulty airbags.

The devices will explode in certain conditions, sending shrapnel into the passenger compartment of vehicles. Its accounted for nearly a dozen deaths and 184 injuries.

(GM allowed to delay Takata airbag recall. For more, Click Here.)

Takata’s next step isn’t entirely clear. Its business is teetering on the precipice of bankruptcy, which is an option, as is being scooped up by another company. The supplier makes other safety devices, such as seat belts, in addition to airbags and inflators.

The company has already agreed to penalties of up to $200 million levied by the National Highway Traffic Safety Administration for rules violations. Additionally, NHTSA is pressuring Takata to speed up its recall efforts.

(Troubled airbag supplier may soon file for bankruptcy. Click Here for the story.)

The repairs are likely to take several years to finish, impacting about a quarter of all vehicles on the road.

The exact cause of the problem remains a topic of debate, though it is generally accepted that Takata airbags are prone to fail over time if used in warm, high humidity climates, such as Southern Florida.

(NHTSA reports showing hundreds of Takata airbags rupturing in testing. For more, Click Here.)

An industry-funded research panel this year also declared that Takata inflators using the explosive chemical ammonium nitrate were vulnerable to malfunction as they age, wherever they are operated.

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