Car Companies Settle Takata Airbag Lawsuit for $553 Million

Posted May 19, 2017

Toyota, along with Subaru, Mazda and BMW, reached the settlement with current and former owners and lessees of 15.8 million vehicles to address lagging repairs and financial losses associated with the air bags, the paper said, citing documents filed Thursday in a Miami federal court.

According to the settlement terms, BMW of North America LLC will pay $131 million, Mazda North American Operations will pay $75,805,050, Subaru of America Inc. will pay $68,262,257 and Toyota Motor Corp., $278,500,000. The rental car/loaner program will provide rental or loaner vehicles upon request to eligible customers for whom recall fix parts are not available within 30 days. Safety regulators have tied 11 deaths in the USA and about 180 injuries to ruptured Takata airbag inflators.

Part of the settlement money will be used to encourage consumers whose cars are under recall to bring them to dealers for fix.

"The low number of recalls to-date demonstrates the need for a settlement of this type, and we look forward to accelerating the removal of defective Takata airbags from the roads", said Peter Prieto, the court-appointed chair lead counsel, who helped negotiate the settlement.

To help raise that rate, NHTSA's launched expanded efforts to notify owners and prompt them to get repairs.

Of the $553 million, automakers will use about $50 million to provide rental cars. The issue is critical because the huge recall covers more than a dozen automakers, and NHTSA expects that it will affect 64 to 69 million inflators in 42 million vehicles by 2020. USA safety regulators have determined that older cars are at the highest risk, since a chemical Takata used in its air bags can break down over time when it's exposed to humidity.

Takata earlier this year pleaded guilty to criminal wrongdoing for providing misleading testing reports to automakers on the air bags and agreed to pay US$1 billion in penalties.

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.