On Feb. 21, the U.S. Bankruptcy Court in Delaware confirmed the reorganization plan of Takata Corporation’s U.S. unit, TK Holdings, clearing the way for the Takata Airbag Individual Restitution Fund (IRF).
The $975 million Takata fund allocates $125 million to personal injury and wrongful death claimants – past, present, and future victims of Takata’s defective airbags, regardless of the vehicle in which the airbags were installed.
A History of Injury and Death
Problems with the airbags emerged in May 2004, when a driver’s side airbag ruptured in a 2001 Honda Accord in Alabama. Since then, at least 22 people have been killed by Takata airbag explosions and more than 230 have been injured. Most of the fatal explosions occurred in the U.S., with a handful of other known deaths in Malaysia and one in Australia.
Takata’s use of ammonium nitrate in its airbag inflator mechanisms has made the devices extremely unstable and dangerous. The highly volatile chemical degrades in heat and humidity, making the inflators hypersensitive and prone to deploy with violent force, blasting shrapnel from the airbag’s metal cannister toward vehicle occupants.
While many of those injured by Takata airbag explosions were seriously harmed, including some left partially or completely blinded, even those who suffered minor injuries as a result of the defective airbags are entitled to seek compensation from the Takata victims’ fund.
Honda, the automaker most affected by the airbag problems, initiated a small recall of about 4,000 vehicles in Nov. 2008. But it wasn’t until after the first Takata airbag death of 18-year-old Ashley Parham of Midwest City, Oklahoma, in May 2009 that Honda launched its first sweeping recall of vehicles with Takata airbags.
Takata airbag recalls have expanded numerous times since then to become, collectively, the largest automotive safety recall ever in the U.S. The National Highway Traffic Safety Administration (NHTSA) estimates that 50 million Takata airbags in 37 million U.S. vehicles are under recall. These numbers do not include the millions more vehicles recalled outside the U.S. Still more recalls that haven’t been scheduled yet will bring the total number of recalled units to 65-70 million by December 2019, according to NHTSA.
Takata’s faulty airbags have been used by more than a dozen global automakers, including BMW, Fiat Chrysler, Daimler, Ford, General Motors, Honda, Mazda, Mitsubishi, Nissan, Subaru, and Toyota. Many Takata airbag units that were salvaged from wrecked cars eventually ended up in other vehicles, further complicating the complex recall.
Civil and Criminal Penalties
Takata remained obstinate in its refusal to widen the airbag recall but the company faced increasing pressure as deaths continued to mount. In May 2015, the manufacturer acknowledged that some of its airbag inflators may be defective. The company then agreed to pay up to $200 million in penalties and consented to review by an independent compliance monitor.
After a series of federal investigations and hearings, Takata pleaded guilty to wire fraud in January 2017. The U.S. hit the company with $1 billion in criminal penalties for its fraudulent handling of the deadly airbag defect, which by then had gone on for a decade and affected millions of vehicles around the world.