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Honda agrees to pay more than $605m in compensation for defective Takata airbags

ABR Staff Writer Published 04 September 2017

Japanese automaker Honda Motor has agreed to pay a compensation of $605m related to the Takata airbag issue in the US.

The settlement covers more than 16.5 million vehicles in the country, for installing potentially faulty airbag inflators in its cars.

The compensation will cover for the extra costs that car-owners had to incur over defective or low quality airbag inflators.

About 18 deaths and 180 injuries from the low quality airbag systems were reported in a few years of time. Honda has agreed to replace the airbag inflators.

Reuters reported that about 42 million vehicles have been recalled till now and 125 million from all over the world will be recalled eventually. This recall is believed to be one of the largest recalls in the history of automotive industry.

Presently, Honda’s settlement will include 11.4 million vehicles and later on, the remaining 5.1 million vehicles shall be covered. Honda will pay about $484m after it has received a discount of 20% for the effort the automaker has been putting, stated a Wall Street Journal report.

The outlay has a fund of $200m which aims to expand Honda’s efforts to reach out to customers and encourage them to visit dealerships to get the airbags in Honda and Acura vehicles replaced.

Honda is one among the other automakers around the world including Nissan, Toyota, Subaru, Mazda and BMW to have installed Takata’s airbag inflators. These automakers have also reached similar agreements with their customers, early this year, for a total compensation of more than $650m.

The airbags could explode with excessive force, while ripping apart a metal canister inside and shooting out shrapnel causing serious injuries and even death, in some cases, either to the driver or the passenger sitting beside the driver.

Last year, the Japanese airbag manufacturer pleaded guilty and has agreed to pay a compensation of $1bn. In June, the airbag-maker Takata filed for bankruptcy protection and is facing billions of dollars in recall costs.


Image: Honda agrees to pay $605m to compensate for Takata airbags. Photo: Courtesy of American Honda Motor Co., Inc.