May 26, 2017

Toyota, 3 other automakers settle suit over Takata air bags

19 May 2017, 08:46 | Marlene Myers

Toyota, Subaru, Mazda and BMW settle suit over Takata air bags

Four carmakers will pay $553m to settle claims over Takata airbags

Toyota Motor Corp. will be on.

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.

Plaintiffs' lawyers earlier this year alleged in court documents that some automakers for years equipped millions of vehicles with Takata air bags to save money despite knowledge the devices could endanger motorists. The $553m settlement does not cover personal injury claims relating to the airbags. The deal is now in the hands of a federal court in Miami.

The settlement includes an outreach program to contact owners; compensation for economic losses including out-of-pocket expenses; a possible residual distribution payment of up to $500; rental cars for some owners; and a customer support program for repairs and adjustments, including an extended warranty. Ford, Honda and Nissan have yet to reach similar agreements. NHTSA says only 32 percent of Toyota owners, 31 percent of Subaru owners, 18 percent of Mazda owners and 16 percent of BMW owners had completed the repairs.

Auto makers will also reimburse some expenses such as for transportation, storing or towing charges, child-care bills and lost wages during vehicle repairs. The court must still approve the settlement.

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The settlement covers 15.8 million vehicles, with Toyota having the biggest share, at 9.2 million.

Defective Takata airbags have been blamed for rupturing and sending risky debris into vehicle cabins. The safety defect has prompted recalls worldwide of about 100 million inflators by more than a dozen major automakers.

Automakers have recalled 46 million Takata air bag inflators in 29 million USA vehicles.

With the criminal settlement and penalties set in the United States, where most of the air bag-related fatalities and injuries have occurred, Takata is continuing its search for a buyer or financial backer, a process that has dragged on for a year. That total included $125 million that's earmarked as restitution to people who are physically injured by defective air bag systems.

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