$553 Million Accord for US Drivers Over Takata Air Bags

Fernando Stephens
May 19, 2017

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

The settlement will compensate people who own or lease vehicles affected by the air bag recall in a variety of ways, from providing rental cars to those who are deemed to be at the greatest risk to "a possible residual distribution payment of up to $500".

Four automakers including Toyota (NYSE:TM) agree to pay $553M to settle claims stemming from rupture-prone Takata (OTCPK:TKTDY) air bags, in the latest legal settlement in a long-running safety crisis linked to 11 deaths and ~180 injuries in the US alone.

Takata's inflators were blamed for at least 16 deaths and more than 180 injuries around the globe.

The automakers said the settlements, which are subject to approval by a Florida judge, will be overseen by a court-appointed administrator.

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The airbags are blamed for 11 deaths and more than 150 injuries, though further cases are now under review. These costs can include rental cars, child care, lost wages, or any other reasonable costs associated with bringing in a vehicle for repairs.

Under the terms of the agreement, the automakers will fund outreach programs with the goal of "significantly increasing" recall completion rates. The plaintiffs filed papers to settle their claims against the companies Thursday, saying the deal covers almost 16 million vehicles. 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. Owners could also be compensated if they paid for a rental auto or for vehicle storage while they were waiting for a auto to be repaired.

Just over 30 percent of Toyota and Subaru vehicles have been fixed, and that number is under 20 percent for Mazda and BMW, according to the National Highway Traffic Safety Administration.

News of the proposed settlement comes months after Takata agreed to pay $1 billion over air bag fraud; three of the company's executives were also criminally charged.

Other reports by BadHub

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