Honda to pay $605 million to settle Takata air bag lawsuit

Kyodo News

Posted at Sep 02 2017 05:05 PM

NEW YORK - Honda Motor Co. said Friday it has agreed to pay $605 million to settle a lawsuit filed by U.S. vehicle owners seeking compensation for economic losses related to recalls of Takata Corp. air bags.

With the settlement by Honda, the Japanese automaker which had sold the most vehicles carrying Takata air bags, six automakers from Japan and Germany will pay a total of more than $1.2 billion in compensation following the class action lawsuit.

The settlement will cover expenses including taxi fares incurred while the owners' cars are under repair as well as an outreach program to ensure air bags are replaced, according to Honda and a document regarding the lawsuit.

In the lawsuit, Toyota Motor Corp., Mazda Motor Corp., Subaru Corp. and BMW AG reached a settlement in May for payments totaling $553 million. In August, Nissan Motor Co. also reached a settlement with vehicle owners to pay at least $97 million.

Ford Motor Co. has yet to settle the lawsuit and plaintiffs will continue seeking a settlement, according to U.S. media.

Honda has started its own program to call on vehicle owners to replace air bags.

A Honda official said the payment is unlikely to have a major impact on the company's earnings as it has already factored in some of the expenses resulting from the settlement.

Takata air bags have proved liable to explosions in which metal fragments have been known to spray at drivers and passengers. The defective inflators could have led to 13 deaths in the United States, where a total of 42 million vehicles across 19 automakers are subject to recall.

Takata has filed for bankruptcy protection as part of a restructuring scheme to restore its business that has been badly battered by the global recall of its defective air bag systems.