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Carmakers to pay $553M to drivers of cars with flawed air bags

May 19, 2017 - 12:05am

The legal battle over the deadly flaws in Takata air bags moved a step closer to resolution on Thursday when four automakers agreed to compensate owners of recalled cars.

Under a proposed settlement in a class-action case, Toyota, BMW, Subaru and Mazda are to pay a total of $553 million to current and former owners and lessees of 15.8 million vehicles. The money is meant to reimburse them for car rentals or other expenses — like lost wages, towing charges or child care — incurred while waiting for their cars to be repaired.

The agreement, filed in U.S. District Court in Miami, is subject to court approval.

But the process of fixing the tens of millions of cars equipped with the rupture-prone air bags will drag on for years. Replacement parts remain in short supply, and many consumers have been unresponsive to recall notices.

Some of the money in the proposed settlement will be used to encourage consumers whose cars are under recall to bring them to dealers for repair. So far the air bags have been replaced in fewer than a third of the affected Toyota and Subaru vehicles and fewer than a fifth of those from BMW and Mazda.

“Many consumers are unaware of the dangers their vehicles pose,” Peter Prieto, a partner at the law firm Podhurst Orseck who served as the lead counsel in the class-action case, said in a conference call with reporters. “It will take years to complete the recalls.”

The inflaters developed by Takata use a compound known as ammonium nitrate that is supposed to fill air bags in a powerful but controlled explosion. When exposed to air or moisture over long periods of time, however, it can become unstable and explode more violently than intended. Takata air bags have been linked to at least 11 deaths and more than 180 injuries.

Under the provisionary settlement, Toyota agreed to pay $278.5 million, BMW $131 million, Mazda $75.8 million and Subaru $68.3 million. The automakers agreed to provide rental cars to owners most at risk, including those with older vehicles or living in humid areas like the Southeast or Hawaii.

The settlement will also provide funds for an effort to urge owners — through phone calls, email, social media and direct mail — to have their cars repaired.

It does not cover personal injuries claims related to the air bags.

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