Honda on Hook for $84.2 Million to Settle State-level Airbag Probe

Matt Posky
by Matt Posky

Honda Motor Co. has agreed to pay $84.2 million to settle an investigation conducted by American states regarding its use of the famously defective Takata airbags — units linked to numerous deaths and hundreds of injuries.

Honda recalled about 12.9 million vehicles (some of them Acura models) equipped with inflation devices that ran the risk of accumulating moisture to the point where the propellant inside could destabilize, leading to an overly forceful explosion during an impact. Upon rupturing, these units could effectively spray shrapnel into the cabin area.

While Honda’s first major recalls were enacted in 2008, by 2013 millions of vehicles were in the process of being retracted by rival manufacturers that also used Takata as a supplier. And it just kept getting bigger until it was the largest recall in history, with Honda receiving the most ire due to the high number of fatalities suffered within its vehicles — and for having prior knowledge of the defects.

The company previously found itself in trouble for not-so-promptly notifying regulators of a Takata seat belt defect from several years earlier, further marring its image during the airbag fiasco. States are now claiming that Honda violated consumer protection laws and was intentionally deceptive by failing to make consumers aware of potentially deadly defects.

With Takata now bankrupt and rolled into Chinese-owned (but Michigan-based) Key Safety Systems, Honda has taken the brunt of the remaining abuse related to the airbag scandal. Yet it was hardly the only automaker involved; practically every name in the industry had at least a few steering wheel-mounted IEDs within their ranks. Honda just had the least plausible-sounding excuses, more direct involvement with the supplier, and a bit more blood on its hands than its rivals. Similar suits were issued against other manufacturers.

According to Reuters, American Honda Motor Co and Honda of America agreed to upgrade their product safety procedures related to frontal airbags to help reduce the risk of future tragedies. This includes the addition of fail-safe features to stop unintentional detonations, improved record keeping, better vetting of suppliers, and applying changes to quality control and risk management teams — among other changes.

From Reuters:

The Honda affiliates agreed to the consent order without admitting wrongdoing and to avoid the cost of further litigation. Court approval is required.

Honda confirmed it had reached civil settlements with 46 U.S. states, Washington, D.C. and three U.S. territories over the matter. It also said it has replaced more than 16 million defective Takata airbag inflators in its vehicles.

A multistate group of attorneys general had been investigating Honda’s use of Takata airbags since December 2015, according to the consent order.

Honda’s big payout results in each state getting a little less than $2 million apiece. That’s chump change compared to how much the recalls set back the affected automakers. GM estimated that it would need a minimum of $320 million to replace inflators in 2.5 million vehicles in 2017. Meanwhile, Toyota said it had $5.12 billion in receivables against Takata to cover the recall of some 27 million units worldwide. Honda’s recall was nearly twice that size. In 2016, Honda calculated that its selling, general, and administrative expenses increased by roughly $1.92 billion (year over year) as a direct result of recall-related expenses. Another $5 billion was set aside the following year.

Attorney General of Virginia Mark Herring said the settlement still represented a win for regulators, however.

“Virginians have a right to be protected from defective products and they deserve to know when they are driving a car with extremely dangerous airbags that could potentially hurt them,” He said on Tuesday. “This settlement sends a strong message to businesses that failure to disclose dangerous product defects will not be tolerated. My team and I remain committed to holding auto manufacturers accountable if they put unsafe vehicles on Virginia’s roads.”

[Image: Anastasiia Moiseieva/Shutterstock]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Carrera Carrera on Aug 25, 2020

    The not so funny thing about it is that the new airbags are good for about 5-6 years if you live in a hot and humid climate. So, I had my 2006 Pilot's changed in 2014 which means I am due again. At that time, someone in the know informed me that the replacements are the same airbags but fresh powder. Things that make you go hmm...Honda was counting and people not keeping their cars for too long. But is is a Honda...

  • NormSV650 NormSV650 on Aug 26, 2020

    Honda's Takata bloodshed continues...

  • CanadaCraig You can just imagine how quickly the tires are going to wear out on a 5,800 lbs AWD 2024 Dodge Charger.
  • Luke42 I tried FSD for a month in December 2022 on my Model Y and wasn’t impressed.The building-blocks were amazing but sum of the all of those amazing parts was about as useful as Honda Sensing in terms of reducing the driver’s workload.I have a list of fixes I need to see in Autopilot before I blow another $200 renting FSD. But I will try it for free for a month.I would love it if FSD v12 lived up to the hype and my mind were changed. But I have no reason to believe I might be wrong at this point, based on the reviews I’ve read so far. [shrug]. I’m sure I’ll have more to say about it once I get to test it.
  • FormerFF We bought three new and one used car last year, so we won't be visiting any showrooms this year unless a meteor hits one of them. Sorry to hear that Mini has terminated the manual transmission, a Mini could be a fun car to drive with a stick.It appears that 2025 is going to see a significant decrease in the number of models that can be had with a stick. The used car we bought is a Mk 7 GTI with a six speed manual, and my younger daughter and I are enjoying it quite a lot. We'll be hanging on to it for many years.
  • Oberkanone Where is the value here? Magna is assembling the vehicles. The IP is not novel. Just buy the IP at bankruptcy stage for next to nothing.
  • Jalop1991 what, no Turbo trim?
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