Honda has announced it will pay $484 million to settle consumer claims in connection with the recalled Takata airbags.
About $285 million of the settlement will be used to compensate customers for out-of-pocket losses stemming from the recall.
The settlement covers owners of 16.5 million Honda and Acura vehicles with faulty Takata air bag inflators. Despite repeated calls, emails and texts, Honda officials have not commented on how the settlement could impact local operations.
, Senior Vice President of
Parts, Service and Technical Operations for
American Honda Motor Co., Inc., said Honda has confirmed 11 deaths and more than 190 injuries in the U.S. related to ruptures of Takata airbag inflators.
“Honda sincerely apologizes to all individuals impacted by this issue, and extends our deepest, heartfelt sympathies to the families of those who have lost loved ones,” Smith wrote.
The air bags can malfunction, sending shards of metal at drivers and passengers, and are linked to at least 17 deaths worldwide through a variety of carmakers.
Consumers originally sued automakers and Takata claiming they had to pay for vehicle rentals and incurred other economic losses while waiting for the air bags to be replaced. They also said the automakers and Takata weren’t recalling and replacing defective air bags quick enough.
The total value of Friday’s settlement was $605 million, but the plaintiffs agreed to a 20 percent discount, about $121 million, as credit for rental cars Honda provided for customers who had to wait for parts. Friday’s settlement must be approved by a judge in Miami and doesn’t cover personal injury claims related to faulty Takata airbags.
“In reaching this agreement, Honda, to its credit and the benefit of its customers, has complemented and enhanced its ongoing industry-innovative efforts to remove the defective Takata airbags from its vehicles,” according to a statement from Peter Prieto, a lead lawyer for the consumers bringing the cases. “This agreement will not only expand awareness of the Takata recalls and improve driver safety by accelerating the removal of defective airbags from our roads, but will provide compensation to affected Honda consumers.”
Honda, which was Takata’s biggest customer, was hit especially hard by the recall, which has encompassed millions of vehicles made by numerous companies and has been linked to at least 17 deaths and more than 100 injuries worldwide.
Honda was Takata’s largest customer and is the sixth manufacturer to settle litigation since May.
As part of the settlement announced Friday, Honda will create a nearly $200 million fund to expand efforts to contact owners who have not been located or have not responded to recall notices to have their cars fixed.
As part of that effort, Honda decided to expand a unique door-to-door outreach effort to reach the owners of certain older model vehicles.
In the announcement of the program, Smith told the story of a “Honda Recall Pit Crew” that showed up at a customer’s garage sale. The man owned a 2001 Honda Civic with an “Alpha” inflator.
“Within a few hours, our team had taken the vehicle to an authorized Honda dealer, where it was quickly repaired and then returned to the customer before the yard sale was finished,” Smith wrote.
Smith said that after more than 100 million attempts to reach affected customers by conventional means such as first class mail, email, phone calls and social media, Honda decided to pilot the outreach effort.
Smith said decisions about the program and its expansion are, “based on learnings from this pilot program.”
He said Honda officials are working to repair every Honda and Acura vehicle impacted by the recall.
“But our particular focus is on a smaller subset of about 130,000 of these vehicles where there is a greater sense of urgency to complete the free recall repairs,” Smith wrote.
He said “Alpha” inflators were originally installed in certain 2001 – 2003 Honda and Acura models and have an alarming rupture rate of as high as 50 percent in a crash, according to the National Highway Traffic Safety Administration (NHTSA) and Takata, the maker of the inflators.
Smith wrote that in addition to the manufacturing defects, passage of time and exposure to hot and humid conditions makes these older inflators at higher risk of rupture.
“The only place an ‘Alpha’ vehicle should be driven is to an authorized dealer for repair,” Smith wrote. “This repair is free – there is no cost to the owner. If the driver is uncomfortable or unable to drive their car in for repair, we will pay to tow it (even a non-running vehicle) to the nearest dealer for free.”
Takata paid a $1billion criminal penalty in connection with the recall and filed for bankruptcy.
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