Takata Pleads Guilty-Agrees to Pay $1 Billion

Airbag manufacturer Takata Corp. is reportedly going to plead guilty today to wire fraud and to pay about $1 billion to resolve a U.S.Justice Department probe in connection with Takata’s defective air bags. The wire fraud charge stems from Takata falsifying data in air-bag testing reports that it gave to auto manufacturers.

The $1 billion is expected to be used as follows: $25 million to pay criminal penalties; $850 million in restitution to auto makers; and $125 million to establish a victim compensation fund for people harmed or killed by the defective air bags.

The plea deal is not set in stone and could change, but preliminary reports indicate that Takata is trying to secure financial backing that will allow it to come up with the $1 billion within a year.