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In a week in Detroit that is supposed to celebrate all that's good and grand about cars at the North American International Auto Show, the federal government put on its own show, dropping some serious bombs on three different days.
Earlier in the week, the Justice Department announced criminal charges against Volkswagen and six employees for cheating on emissions. On Thursday, the. Environmental Protection Agency on formally accused Fiat Chrysler of cheating on diesel exhaust. The firm adamantly denies the allegations.
And on Friday, the Justice Department announced in Detroit that Tokyo-based Takata Corporation, one of the world’s largest suppliers of automotive safety-related equipment, agreed to plead guilty to wire fraud and pay a total of $1 billion. It also announced the indictment of three Takata executives.
The allegations against the company and the executives stems from the company’s fraudulent conduct in relation to sales of defective airbag inflators.
“For more than a decade, Takata repeatedly and systematically falsified critical test data related to the safety of its products, putting profits and production schedules ahead of safety,” said Justice Department Fraud Section Chief Andrew Weissmann in a statement.
“Automotive suppliers who sell products that are supposed to protect consumers from injury or death must put safety ahead of profits,” said Detroit U.S. Attorney Barbara McQuade in a statement.
Takata's website plays up its safety focus.
We are dedicated to protecting human life. We began by developing seat belts utilizing the technology found in parachutes. Since then, we continue to develop the newest safety technology and make it available globally. This has been our objective since the beginning and we will remain committed to it. Our dream is to reduce the number of fatalities of traffic accidents to zero.
A statement from the feds counters some of those claim:
According to the company’s admissions, in the late 1990s, Takata began developing airbag inflators that relied upon ammonium nitrate as their primary propellant. From at least in or around 2000, Takata knew that certain ammonium nitrate-based inflators were not performing to the specifications required by the auto manufacturers. Takata also knew that certain inflators had sustained failures, including ruptures, during testing. Nevertheless, Takata induced its customers to purchase these airbag systems by submitting false and fraudulent reports and other information that concealed the true condition of the inflators.
This fraudulent data made the performance of the company’s airbag inflators appear better than it actually was, including by omitting that, in some instances, inflators ruptured during testing. Takata employees – including a number of key executives – routinely discussed the falsification of test reports being provided to Takata’s customers in email and in verbal communications. Even after the inflators began to experience repeated problems in the field – including ruptures causing injuries and deaths – Takata executives continued to withhold the true and accurate inflator test information and data from their customers.
In addition, Takata took no disciplinary actions against those involved in the falsification of test data until 2015, despite the fact that senior executives had been made aware of the fraudulent conduct years earlier.
