[JURIST] Japanese automobile parts manufacturer Takata [corporate website] pleaded guilty [DOJ press release] on Monday to wire fraud arising out of air bag defects that killed 16 people. Takata was sentenced to pay $1 billion in fines, victim compensation and compensation to the auto manufacturers for recall and replacement. Judge George Caram Steeh of the US District Court for the Eastern District of Michigan [official website] accepted the guilty plea, in which Takata admitted that it carried out a fraud scheme from 2000 to 2015 by “providing false and and manipulated airbag test data” that made the airbags appear to perform better than they really did. Takata admitted that executives withheld the truth about the test data from customers even after the airbags began rupturing and causing injuries with expelled shrapnel. The company and the US Department of Justice [official website] agreed [JURIST report] last month to this fine and the terms of the plea.

Auto manufacturers have continued to face punishment for issues with their vehicles and parts in the US. In July the National Highway Traffic Safety Administration determined [JURIST report] that Fiat Chrysler failed to provide a remedy and notices for 23 recalls related to malfunctions of their automobiles. In 2014 the US DOJ announced [JURIST report] a $1.2 billion settlement agreement with Toyota for misleading customers and US regulators. In November 2012 Toyota settled [JURIST report] a class action lawsuit for $35.5 million brought by its shareholders for failing to disclose vehicle quality issues. In 2010 Toyota agreed [JURIST report] to pay $32.4 million in fines following investigations by the National Highway Traffic Safety Administration. JURIST Guest Columnist Bruce Aronson in 2011 argued [JURIST op-ed] that the recent corporate scandals in Japan, including the Toyota recalls, highlight the need for reform of that country’s corporate governance structure.