Toyota, 3 other automakers settle suit over Takata air bags

Dora Pope
May 20, 2017

Now, Toyota, Subaru, Mazda, and BMW have all agreed to pay a collective $553 million to former owners and lessees of affected vehicles as part of a class-action lawsuit, potentially setting the stage for other manufacturers to follow suit. The auto makers said the settlements, if approved by a Florida judge, would be overseen by a court-appointed administrator.

Takata's inflators were blamed for at least 16 deaths and more than 180 injuries around the globe. Safety regulators have tied 11 deaths in the US and about 180 injuries to ruptured Takata airbag inflators. By 2019, automakers will recall 64 million to 69 million USA inflators in 42 million vehicles, regulators said in December. Given the size, scope and severity of the Takata recall, these automakers are the first to agree to a settlement structure to fund consumer outreach, rental car/loaner programs and out-of-pocket cost reimbursement.

There is also a settlement that involves Takata itself, who will compensate automakers with $850 million, and that deal also created a $125 million fund to compensate injured individuals who have not already reached an agreement by January 2017.

More than nine million Toyota vehicles, 2.6 million Subaru vehicles, 2.3 million BMW vehicles and 1.7 million Mazda vehicles, are covered by the settlement, according to the plaintiffs.

Among the benefits provided for in the settlements is a new independent outreach program that seeks to dramatically increase recall remedy completion rates. Owners getting a recall can be reimbursed for lost wages, transportation and child care costs.

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Officials pointed out that economic loss claims pending against Ford, Honda and Nissan will continue to be prosecuted.

The settlement - by Toyota, BMW, Subaru and Mazda - covers 15.8 million vehicles equipped with rupture-prone air bag inflators. 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 vehicle industry's biggest-ever recall. The agreements don't constitute admissions of liability on behalf of the automakers and cover vehicles that have been, or will be recalled for Takata phase stabilized ammonium nitrate airbag inflators.

In January, Takata agreed to plead guilty to USA charges of criminal wrongdoing and to pay $1bn to resolve a federal investigation into its inflators.

Toyota would pay the most under the settlement, at $278.5 million.

The auto companies cite Takata's guilty plea and the settlement as a "game changer" maintaining they were not aware that the air bags were faulty when they installed them in their vehicles.

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