3 Takata Executives Face Criminal Charges Over Exploding Airbags

by admin January 13, 2017 at 10:30 pm

The indictments are the latest moves by the outgoing Obama administration to extract guilty pleas from companies and to charge individual managers and executives. Federal prosecutors this week also charged six Volkswagen executives for their roles in an emissions-cheating scandal.

The efforts are seen as a departure from the years following the 2008 financial crisis, when not a single top Wall Street executive went to prison.

Takata’s executives are accused of especially egregious conduct.

According to the indictment, the executives were at the center of efforts to manipulate airbag safety data that continued for as long as 15 years. They knew as early as 2000 that the airbags’ metal inflaters could explode, prosecutors said.

But over the years, they routinely discussed falsifying those test results, discarding damaging information, an action referred to internally at Takata as “XX-ing” the data, the indictment said.

The executives, Shinichi Tanaka, Hideo Nakajima and Tsuneo Chikaraishi, were indicted by a grand jury in December. The accusations were unsealed on Friday. All three had worked for Takata until around 2015 in the United States and Japan, the indictment said.

“Takata will continue to cooperate fully with D.O.J. in connection with its ongoing investigation,” the company said in a statement, referring to the Justice Department.

The three executives could not be reached for comment, and it was unclear who was acting as their legal representative. Neither the Justice Department nor Takata would provide any contact information.

Mr. Nakajima’s name appears on various internal documents that have been unsealed as part of litigation against Takata, and he is often described as a liaison between Takata’s Japanese and American operations. He was formerly director of engineering at Takata’s research lab in Farmington Hills, Mich., the Automotive Systems Laboratory.

Mr. Tanaka, the highest ranking of the three, was formerly listed as an executive officer at Takata headquarters and the company’s chief director of procurement, as well as executive vice president of Takata’s global inflater operations.

The Airbag in Your Car Could Explode. This Is What You Should Do About It.

Defective airbags made by Takata have been tied to 11 deaths and more than 180 injuries in the United States alone. The ensuing recall — the largest in automotive history — has turned out to be messy, confusing and frustrating for car owners.


Mr. Chikaraishi also held various executive positions, including chief of airbag inflater operations for Japan and Asia. His name appears on numerous patent applications related to airbag technology filed in the United States.

Ms. McQuade stressed that investigations were still underway.

“We will continue to investigate and if we are able to identify additional individuals, we will charge them as well,” she said.

In recent months, Takata has cooperated with the investigation, Ms. McQuade said, including identifying culpable individuals. Prosecutors took that cooperation into account in pursuing penalties, she said.

Prosecutors said the three indicted executives were thought to live in Japan. If so, it is unclear whether they will face a court in the United States. Japan has an extradition treaty with the United States, but in practice the Japanese government has discretion over whether to comply with any extradition requests from the United States.

Takata, however, has previously cooperated with authorities in this regard.

In 2013, three other Takata executives agreed to plead guilty for their roles in a conspiracy to fix the prices of seatbelts sold in the United States. The executives also agreed to serve time in a United States prison.

Pointing to that precedent, Ms. McQuade said she thought that the chances for an extradition were “pretty good.” She added, “It’s not an automatic, but we’re going to work hard at it in this case.”

Even with the current administration’s newfound interest in going after corporate executives, criminal charges against individuals in a case involving automotive safety defects are rare.

Prosecutors can struggle to surmount high legal standards and gaps in the oversight of carmakers — gaps that stem from nearly five decades of hard lobbying from the auto industry to beat back efforts to strengthen criminal penalties. These gaps do not exist in some other industries like pharmaceuticals or food.

Senators Richard Blumenthal of Connecticut and Edward J. Markey of Massachusetts, Democrats who led congressional efforts to investigate Takata, called the Justice Department’s effort to hold executives accountable overdue. They also urged regulators to speed up efforts to fix affected cars.

“The message to corporate executives should be that fake safety tests and tragic deaths will result in stiff penalties, including prison,” they said in a joint statement. “This kind of criminal accountability is long overdue for lawbreaking corporate executives.”

“The effort to protect drivers from Takata’s wrongdoing does not stop here,” they continued. “We must recall every single vehicle with a Takata airbag,” they said, and the National Highway Traffic Safety Administration “must accelerate the recall of these dangerous airbags to prevent yet another unnecessary and tragic death.”

Takata’s airbag recall in the United State has affected nearly 70 million airbags in 42 million vehicles.

Takata also faces a class-action lawsuit filed by owners of cars fitted with Takata airbags, among other litigation.

“The risk they allowed is really reprehensible,” Ms. McQuade, the United States attorney, said. “We want auto suppliers to know they have to put safety ahead of profits. Cheaters will not be allowed to gain a competitive advantage.”

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