Takata Rejects U.S. Senator's Call For Compensation Fund
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Takata Rejects U.S. Senator's Call For Compensation Fund

Automotive company Takata has rebuffed a U.S senator's call to create a compensation fund for those affected by their defective airbags that have already killed 8 and injured over 100.

Monday, July 20, 2015 - Japanese automotive parts manufacturer Takata has rebuked a U.S. governmental effort to establish a compensation fund for those affected by the company's defective airbags. U.S. Senator Richard Blumenthal proposed the fund to Takata, which was fashioned much like funds set up by General Motors during their malfunctioning ignition switch multidistrict litigation. Takata has chosen not to set up a similar fund, claiming that it is not necessarily at the present moment but the option will be considered going forward.

The call for the compensation fund comes as multidistrict litigation against Takata builds after 8 deaths and more than 100 injuries have been connected to the projection of metal from the company's airbags. The malfunction occurs when humidity causes moisture to affect the propellants in the inflator and cause it to fire at dangerous speeds. The metals fired by the defective propellants exit through the airbag and have the ability to serious injure passengers in the vehicle. The company has acknowledged that these types of airbags are being replaced in more than 30 million vehicles.

The creation of a compensation fund was a move employed by General Motors to calm the negative attention cat on the large American automaker following a ignition malfunction that caused a number of deaths and injuries. Takata's vice president however has claimed that such a measure is not necessary for the company to make, stating that the lawsuits will continued to be settled on a case-by-case basis. GM's litigation does involve a much wider scope of affected parties as over 100 people were reported to have died from the ignition-switch malfunction. Takata claims that the small size of the affected parties in their litigation contributed to their belief that a compensation fund wouldn't be needed.

Senator Richard Blumenthal was upset with Takata's decision to forgo the compensation fund, claiming that the company is failing to take responsibility for the damaging affect their product has had on those who have suffered as a result of its defective deployment. The senator noted the death and injury tolls already recorded and pointed out that those numbers will likely continue to rise. The failure to set up a compensation fund means that those affected by the faulty airbags will not receive financial assistance until either their individual case or the MDL as a whole is settled, which could take years.

Takata first acknowledged its role in the defective qualities of the airbags in May when the company announced the recall on cars that included the product. Plaintiffs claim however that Takata knew of the airbag problems long before the litigation against them began to heat up. The allegations claim that Takata intentionally withheld the information from consumers in an effort to avoid the recall and backlash that is currently underway, and recklessly put the lives of those using the defective products at risk to do so.

The lawsuits were transferred into multidistrict litigation on February 5, 2015 to the Southern District of Florida before U.S. District Judge Federico A. Moreno.

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