Senator slams Takata for refusing to establish compensation fund

Senator slams Takata for refusing to establish compensation fund
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A Democratic senator is criticizing Japanese auto parts company Takata for falling to establish a compensation fund for victims of car crashes related to faulty airbags involved in a recall that has affected 34 million vehicles. 

Lawmakers have pressured the firm to start a fund for people who encounter the company's defective airbags in crashes, similar to a move made by General Motors in 2014 when 2 million of its cars were recalled for having faulty ignition switches. 

Takata has refused to establish the fund, saying it would prefer to discuss settlements with specific people who file claims. 


Sen. Richard Blumenthal (D-Conn.) said Friday that he is taken aback by the company's decision. 

"I am astonished and deeply disappointed by Takata's refusal to establish a victim’s compensation fund — even after 100 injuries and eight deaths attributed to its defective airbags, numbers almost certain to rise," said a statement from Blumenthal, who has pushed hard for the establishment of the compensation fund. 

"Takata is apparently unwilling to acknowledge its responsibility for these tragic deaths and injuries, or do justice for victims and their loved ones," Blumenthal continued. "I will press Takata to reconsider this callous misjudgment, and do right by the innocent victims of its harm.”

Takata has come under fire since issuing a recall in late 2014 of about 8 million cars with faulty airbags that could explode when deployed in humid conditions. The defective airbags were used in cars manufactured by companies including Honda, Lexus and Chrysler.

The recall was later expanded to include another 17 million cars after federal regulators put pressure on Takata.

The company said in a letter to Blumenthal that it is working compensate people who are injured due to its faulty airbags without the establishment of a payment fund and working quickly to repair cars that contain the defective part. 

"As I stressed at the hearing on June 23, we deeply regret each instance in which one of our products did not perform as intended and someone has been injured or killed," Takata Vice President Kevin Kennedy wrote in the July 7 letter. 

"Because it is unacceptable to us for even one of our products to fail to perform as intended, we are doing everything in our power to address the safety concerns raised by airbag ruptures," he continued. 

Kennedy said the company considered Blumenthal's request to establish a compensation fund but decided it was not necessary at this time. 

"Takata’s senior management has given the idea of a compensation fund careful consideration, and we will continue to evaluate the possible benefits of such a mechanism in relation to the personal injury lawsuits involving airbag ruptures and the multi-district litigation proceedings now pending in federal court in the Southern District of Florida," he wrote.

"As you may know, Takata has already resolved a number of claims involving airbag ruptures, and we intend to continue to discuss settlement of claims in appropriate cases going forward," Kennedy continued. "At the present time, given the limited number of claims filed and the MDL procedures in place that permit the efficient coordination."