Lawsuit alleges automakers knew of deadly Takata airbag defects

Takata Corp.'s chief financial officer Yoichiro Nomura leaves federal court in Detroit. Photo / AP

Court documents filed today allege that five auto companies were aware of defects that caused Takata airbags to potentially harm or kill motorists, but continued to use them in order to save on costs.

The documents filed by lawyers representing victims and their families claim that Honda, Ford, BMW, Toyota and Nissan have known about the issues with the Japanese manufacturer's airbags for more than a decade but used the airbags anyway because Takata was cheaper than its competitors and could produce the bulk quantities the automakers needed, according to the court documents.

The allegations come as Takata entered a guilty plea in a federal courtroom as part of its agreement with the Department of Justice. That deal, reached last month in the final days of the Obama Administration, saw three Takata executives indicted on wire fraud charges and required the company to pay US$1 billion in fines and restitution.

The largest portion of the penalty, US$850 million, would be paid to automakers who incurred billions of dollars in expenses recalling vehicles and replacing airbags. The National Highway Traffic Safety Administration, which sets automobile safety standards, recalled more than 64 million airbags in 42 million vehicles, making the Takata recall the largest in US history.

Takata also agreed to set up a US$125 million fund for the families and individuals impacted by the faulty airbags as part of the Justice Department deal.

The device that inflates Takata airbags was found to explode in certain instances, sending shrapnel into the cabin of the car. The defect has been attributed to 11 deaths and roughly 180 injuries in the US, according to NHTSA, as well as others around the globe.

The allegations raise new questions about who should shoulder blame for the deaths and injuries the airbags caused.

The agreement reached last month with the Justice Department claims that Takata deliberately omitted or falsified data to make its airbags appear safer, then passed the doctored information on to automakers. Automakers have said that deception should exonerate them of liability.

But the documents filed today say automakers nevertheless had independent information that the airbags were faulty and chose to continue installing them in millions of vehicles.

"For the automotive defendants to call themselves victims insults the real victims here - hundreds of people who have been seriously injured or killed by a device that was support to protect them, and tens of millions of vehicle owners who have been force to bear the risk of such injury and incurred substantial economic damages," the documents state.

Toyota and Ford declined to comment on the accusations.

In court documents, lawyers allege that Honda was "intimately involved" with the design of Takata's airbags and that at least two airbag inflators ruptured during testing at Honda's facilities in 1999 and 2000. Honda used the airbags anyway, according to the court documents, and that at least 77 airbags ruptured on the road before the company implemented a nationwide recall.

Honda called the allegations that it used the airbags despite safety concerns "categorically false" and pointed to the Takata settlement as evidence that automakers were misled to believe the product met safety standards.

"The reality is that when Honda learned of the risks that these airbag inflators presented, Honda reacted promptly and appropriately by issuing safety recalls and replacing the affected Takata airbag inflators at no charge to its customers," the company said in a statement.