Arizona and Honda Reach $5M Takata Air Bag Settlement

A $5 million Takata air bag settlement has been reached between the state of Arizona, American Honda Motor Company, Inc., and Honda of America Mfg., Inc. over allegations the automaker concealed safety risks associated with defective air bag systems.

The resolution in the vehicle defect suit brought by Arizona Attorney General Mark Brnovich involves certain Honda and Acura models manufactured between 2001 and 2016.

The Takata airbag settlement is to be broken down as follows:

• Up to $2.13 million in incentive gift cards so Arizona consumers can repair their vehicles for free
• Up to $1.65 million in restitution for eligible Arizonans who purchased a Honda vehicle with a Takata airbag currently subject to recall between September 1, 2012, and November 3, 2015
• $750,000 for outreach efforts to inform consumers about the recall and encourage them to replace the defective airbags
• A $500,000 payment to the state

The state alleged that Honda should have warned consumers about the airbag issues by September 2012, but consumers did not receive notice until November 2015, when federal regulators fined Takata $200 million.

Brnovich’s announcement said that despite Takata filing for bankruptcy, “the harm from its conduct is ongoing.”

Takata’s defective air bag systems are at risk of exploding and since 2000 have been blamed for 17 U.S. deaths and more than 200 serious injuries. All but two of the deadly explosions have taken place in Honda Civics produced in and around 2002. The most recent fatality occurred in Arizona in August.

Takata Air Bag Settlement Details

Per the terms of the Takata air bag settlement, $1.6 million in restitution payments will be split among more than 15,000 Arizona consumers who purchased a Honda or Acura with Takata air bags between September 1, 2012, and November 3, 2015. Each is slated to receive a $100 check.

The $2.13 million slated for the repair incentive program is meant to encourage affected vehicle owners to have the air bag system replaced. Millions of cars equipped with the defective air bag systems still have not been brought to authorized mechanics and dealerships to have the dangerous parts removed, and tens of thousands of vehicles registered in Arizona alone need to do so.

To get that accomplished, some 40,000 cash-equivalent gift cards will be automatically mailed to owners. The cards can only be activated after the car is taken to a Honda dealership for the free air bag replacement, according to Brnovich’s statement. The individual cards will be good for $150 or $50, depending on the specific type of air bag equipment originally installed.

“We are pleading with the owners to get their vehicles repaired immediately,” Brnovich told ABC News.

Honda admits no wrongdoing as part of the Takata air bag settlement.

Takata Air Bag Settlement Latest in the Nation

The deal negotiated between Arizona and Honda was finalized shortly after the attorneys general of 41 other states, Washington, D.C., Guam, and the Northern Mariana Islands collectively agreed to an $85 million settlement over the same allegations – that the automotive giant knew Takata air bag inflators posed a risk, but concealed it from the public.

New York Attorney General Letitia James, one of the lead prosecutors, revealed that investigators found that Honda engineers suspected the air bag propellant could burn aggressively and cause the inflator to burst, but delayed warning consumers or automobile safety officials.

Arizona officials chose not to participate in the multi-state Takata air bag settlement because it only included payments to the states, not injured consumers, and left out incentives for air bag replacement, Brnovich’s office said.

Takata’s Downfall

A total of 19 automakers installed Takata air bags in vehicles, all of which were ultimately subjected to a recall, “the largest and most complex safety recall in U.S. history,” according to the National Highway Traffic Safety Administration.

Once a hugely successful player in the global automotive supplies and parts market, Takata pleaded guilty in U.S. court to criminal wrongdoing related to the manufacture and sale of its defective air bags – specifically misleading clients with inaccurate safety test data on the air bag. The company agreed to pay $1 billion in fines before filing bankruptcy four months later.

In addition to air bags, Takata was a worldwide supplier of seat belt webbing, which has also come under recent scrutiny.

Joyson Safety Systems, a Chinese automotive supplier that took what was left of Takata after the bankruptcy, has said it uncovered inaccuracies in more than 20 years’ worth of testing data for seat belt webbing, “suggesting the numbers might have been altered intentionally,” NBC News reported.

Aware of Joyson’s findings, Japanese officials have put car companies on notice that a potentially massive recall —as many as 2 million vehicles —may be forthcoming, according to the Japanese financial newspaper The Nikkei.

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