Capping an extraordinary week for corporate crime busting, on Friday Takata plead guilty to fraud charges and agreed to pay a whopping $1 billion fine. And three Takata executives were criminally charged for their part in the deadly cover-up. The indictment accuses the three executives of falsifying test data that resulted in at least 11 deaths — two of whom were Texans — and over 100 injuries, many serious.
Takata airbags in 42 million vehicles sold in the U.S. from 2002 have exploded and sent deadly medal shards shooting into the car’s interior and into the driver’s or passenger’s face, neck, or chest.
Furthermore, on Wednesday six VW executives were indicted and the German company was fined a staggering $4.3 billion for lying about its emission ratings. This brings the total cost it will have to pay, including lawsuit settlements to consumers, to an astonishing $20 billion, the largest amount in history.
After eight years of coddling giant companies, the Obama Administration is certainly going out with a bang.
Since 2004, three enormous corporations in particular — General Motors, Trinity Industries, and Takata — had been producing deadly vehicles or highway guardrails. And company executives knew about the defects and covered up damning evidence, even though they could have recalled their products and saved dozens of lives.
What had been the cost? Not that much. While they were fined millions of dollars and a huge verdict was taken against Trinity Industries, they continued to make excessive profits. G.M. raked in a whopping $43 billion and earned almost $3 billion — just in its most recent quarter — yet fought tooth and nail to avoid paying its victims.
All in all, the consequences for knowingly creating seriously dangerous vehicles and roadside barriers were relatively minor. Until last week.
All too often, executives are allowed to hide behind what is called the corporate veil, a legal concept that limits liability of the people who work for a corporation. This is why no person had been prosecuted for hiding the defect in General Motors’ ignition switch that disabled the engine or in Trinity’s lethal guardrails.
Shockingly, Takata and GM chose to save a measly $2.00 per car by using a cheaper propellant and part. Even more frightening, executives learned early on that that tiny savings came at the cost of life but chose to ignore it, then covered it up. One of the executives even stated in an internal email that he had no choice but to manipulate the test results that showed the design was defective.
The defect was only discovered after lawsuits were filed after several people died and were seriously injured by the metal shrapnel. The largest automobile recall in American history ensued.
If you haven’t already checked to see if your vehicle is affected, you should do so immediately. Here’s a good site with more information about this massive recall where you can learn more. Up to 69 million airbags are affected, so the recall may very well affect your vehicle and make you decide not to continue driving it.
According to the Justice Department, more Takata executives may be charged as the investigation continues. After all, a cover up of this magnitude likely involved more than three people.
Hopefully the new Attorney General will continue to advocate for the rights and safety of motorists and consumers.
I’ll continue to monitor highway and vehicle safety issues that affect drivers’ rights.