WASHINGTON/TOKYO: Four automakers agreed to a $553 million settlement to address class-action economic loss claims covering owners of nearly 16 million recalled vehicles with potentially defective Takata airbag inflators, court documents filed on Thursday showed.
Toyota Motor Corp’s share of the settlement costs is $278.5 million, followed by BMW AG at $131 million, Mazda Motor Co at $76 million and Subaru Corp at $68 million.
While the settlement does not mean an end to legal headaches faced by Takata Corp or its car maker clients, the resolution could help the embattled Japanese air bag maker’s efforts to search for a financial sponsor by removing one litigation uncertainty.
Shares of Takata, which was not named as a plaintiff in the case, jumped 20 per cent in Tokyo on Friday. 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 centre of the auto industry’s biggest-ever recall.
US auto components maker Key Safety Systems (KSS) and private equity fund Bain Capital are trying to strike a rescue deal worth around 200 billion yen with Takata’s steering committee and its automaker customers.
The settlement highlights the knock-on effect of the recalls, which began around 2008 and covers around 100 million inflators around the world used in vehicles made by 19 automakers.
“This is a settlement between us and our customers,” said a Tokyo-based spokeswoman for Mazda.
Lawsuits against Honda Motor Co, Ford Motor Co and Nissan Motor Co have not been settled, lawyers said. Takata declined to comment on the settlement.
The four automakers who settled said in a joint statement they agreed to the deal “given the size, scope and severity of the Takata recall,” but did not admit fault or liability. The automakers said the settlements, if approved by a Florida judge, will be overseen by a court-appointed administrator.
The settlement includes an outreach programme 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 programme for repairs and adjustments, including an extended warranty.
— Reuters
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