Toyota, BMW, Mazda and Subaru agree to airbag deal
Washington/Tokyo — Four car makers agreed to a $553m settlement to address class-action economic loss claims covering owners of nearly 16-million recalled vehicles with potentially defective Takata airbag inflators, court documents filed on Thursday showed.
Toyota’s share of the settlement costs is $278.5m, followed by BMW at $131m, Mazda at $76m and Subaru at $68m.
While the settlement does not mean an end to legal headaches faced by Takata or its car maker clients, the resolution could help the embattled Japanese airbag maker’s efforts to search for a financial sponsor by removing one litigation uncertainty.
Shares of Takata, which was not named as a plaintiff in the case, jumped 20% in Tokyo on Friday. Takata has been searching for more than a year to find a financial sponsor to pay for costs to replace its inflators, which are at the centre of the car industry’s biggest-ever recall.
US car components maker Key Safety Systems (KSS) and private equity fund Bain Capital are trying to strike a rescue deal worth about ¥200bn with Takata’s steering committee and its car maker customers.
The settlement highlights the knock-on effect of the recalls, which began around 2008 and covers about 100-million inflators around the world used in vehicles made by 19 car makers.
Takata’s inflators can explode with excessive force and unleash metal shrapnel inside cars and trucks, and are blamed for at least 16 deaths and more than 180 injuries worldwide.
"This is a settlement between us and our customers," said a Tokyo-based spokesperson for Mazda.
Lawsuits against Honda, Ford and Nissan had not been settled, lawyers said.
Takata declined to comment on the settlement.
The four car makers who settled said in a joint statement that they agreed to the deal "given the size, scope and severity of the Takata recall", but did not admit fault or liability. The car makers said the settlements, if approved by a Florida judge, would be overseen by a court-appointed administrator.
The settlement includes an outreach programme 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 programme for repairs and adjustments, including an extended warranty.
In January, Takata agreed to plead guilty to US charges of criminal wrongdoing and to pay $1bn to resolve a federal investigation into its inflators. The majority of the airbag-related fatalities and injuries have occurred in the US.
Car makers have recalled 46-million Takata airbag inflators in 29-million US vehicles. By 2019, car makers would have recalled 64-million to 69-million US inflators in 42-million vehicles, regulators said in December. Most inflators have not been fixed.