Toyota, BMW, Mazda and Subaru agree to airbag deal

Otis Hoffman
May 20, 2017

Toyota, Subaru, Mazda and BMW have reached a proposed settlement that would compensate owners of 15.8 million vehicles for economic losses stemming from the massive recall of Takata air bags.

The latest development in the Takata airbag story arrived on Thursday and included four automakers, almost 16 million vehicles and more than $500 million in settlements. The settlements will be supervised by a court-appointed administrator, if approved by a Florida-based judge.

Takata airbag inflators have been linked to at least 17 deaths and more than 180 injuries worldwide. Safety regulators have tied 11 deaths in the USA and about 180 injuries to ruptured Takata airbag inflators. By 2019, auto makers would have recalled 64-million to 69-million United States inflators in 42-million vehicles, regulators said in December.

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The settlement includes an outreach program to contact owners; compensation for economic losses including out-of-pocket expenses; a possible residual distribution payment of up to $500; rental cars for some owners; and a customer support program for repairs and adjustments, including an extended warranty.

The settlement will also provide funds for an effort to urge owners - through phone calls, email, social media and direct mail - to have their cars repaired. The automakers agreed to provide rental cars to owners most at risk, including those with older vehicles or living in humid areas like the Southeast or Hawaii. 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 center of the auto industry's biggest-ever recall.

Further, a new independent outreach program that seeks to dramatically increase recall remedy completion rates will be established.

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These agreements cover the four automakers' vehicles already recalled or subject to any future recall for Takata PSAN inflators used in driver or front passenger airbag modules, * as described in NHTSA's 2015 Consent Orders and any amendments. The money is meant to reimburse them for vehicle rentals or other expenses - like lost wages, towing charges or child care - incurred while waiting for their cars to be repaired. Ford, Honda and Nissan have yet to reach similar agreements.

The settlement comes in the wake of mass recalls of airbags produced by Japanese company Takata.

Takata agreed pleaded guilty to fraud in February after agreeing to pay a US$1 billion penalty.

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