Honda Agrees To $85 Million Settlement Over Takata Airbags

Honda (HMC) will pay $85 million as part of a multistate settlement over allegations it concealed airbag safety issues in certain Honda and Acura vehicle models sold in the U.S. The settlement agreement was announced by District of Columbia Attorney General Karl A. Racine.

In the lawsuit, the attorneys general of 48 states allegedthat Honda failed to inform regulators and consumers the frontal airbags in their Honda and Acura vehicles had the risk of rupture, which could send metal fragments into passenger compartments, causing injury and death.

The faulty airbags from Takata caused at least 14 deaths and more than 200 injuries in the U.S., the attorney general’s office said.

As part of the settlement, Honda is required to implement “fail-safe” features so that future airbag systems will have a safety system if a failure or other problem occurs.

As part of the $85 million settlement, the District of Columbia will receive $2 million, with additional monies going to South Carolina, Arkansas, Connecticut, Florida, Georgia, Maryland, New Jersey, Oregon, South Dakota, Texas, Alabama, Alaska, Colorado, Delaware, Guam, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New York, North Carolina, North Dakota, Northern Mariana Islands, Ohio, Pennsylvania, Rhode Island, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Wyoming.

“This settlement with Honda makes clear that companies, large and small, will face serious consequences when they put profits over protecting the safety of their customers,” Racine said. “Our coalition of attorneys general is pleased that, as a result of this multistate investigation, Honda will now improve vehicle safety for drivers and passengers and implement policies companywide that will help prevent future deaths and injuries.”

The airbags that were part of the lawsuit included ammonium nitrate, which could burn “aggressively,” causing the inflator to burst. The lawsuit accused Honda engineers of knowing the ammonium nitrate could pose a risk and said the automaker delayed warning consumers and safety officials despite making recalls in 2008 and 2009. The lawsuit also alleged Honda continued to tell consumers its vehicles and airbags were safe.

Honda has recalled 12.9 million Honda and Acura vehicles over airbag concerns since 2008. More than 40 million U.S. vehicles have been equipped with Takata airbags that have been recalled because the inflators can rupture during a crash, the National Highway Traffic Safety Administration said.

Worldwide there have been at least 25 deaths and nearly 300 injuries linked to the Takata airbags, which have been recalled by 19 major automakers, Reuters reported.

Shares of Honda were trading at $25.47 as of 2:53 p.m. EDT, up 30 cents of 1.19%.