Product Liability

Takata Whistleblowers Split $1.7 Million Award

Takata airbag image source alexauto321 wikicommons Takata Whistleblowers Split $1.7 Million AwardThree whistleblowers who were instrumental in alerting U.S. authorities to the risks of Takata’s deadly airbag inflators will share an award of $1.7 million, a sum that could grow substantially larger once legislators determine the mechanics of a new auto whistleblower law passed in 2015.

The whistleblowers were all former employees of Takata Corp., the Japan-based automotive supplier that manufactured tens of millions of airbags with highly unstable inflators. The dangerously defective airbags were installed in cars, trucks, and SUVs made by 19 automakers

Lawyers for the three whistleblowers said the men provided extensive assistance and information that prompted the largest automotive recall in history and helped the U.S. government pursue a criminal case against Takata, which ended with the company pleading guilty to one felony count of wire fraud and agreeing to pay a $1 billion criminal penalty.

According to Reuters, the whistleblowers sought awards under the Motor Vehicle Safety Whistleblower Act, which Congress passed in 2015 amid General Motors’ ignition switch debacle and a series of other scandals that shook the auto industry.

The law allows auto-industry employees who report serious violations of federal vehicle-safety laws to collect between 10 and 30 percent of any monetary sanctions over $1 million that the government recovers as a result of the tips the whistleblower provided.

Congress directed the National Highway Traffic Safety Administration (NHTSA) to craft the rules of the new law by June 2017. But a year after that deadline the agency’s work on the legislation remains unfinished.

One of the whistleblowers resigned from his position at Takata as a top-level engineer in 2001 and “turned over evidence to the government showing Takata knew as early as 1999 that its airbags could be deadly and provided emails and designs,” according to Reuters.

Another of the whistleblowers provided information to the government that Takata “falsified data, subverted testing procedures, and concealed reports its airbags were prone to failure,” Reuters reported, quoting the whistleblower’s lawyer.

Because NHTSA has not completed rules on paying whistleblower rewards under the new whistleblower act, Takata agreed in bankruptcy court to pay the whistleblowers out of a reserve fund created during the company’s restructuring.

Of the 50 million airbag inflators recalled in the U.S., 21 million (42 percent) have been repaired, NHTSA reported last week.

The faulty inflators can cause the Takata airbag to inflate with deadly force, blasting fragments of the device’s metal container at the occupants of the vehicle. Takata airbags have been blamed for at least 22 deaths and about 200 injuries.