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Class action lawsuits seek economic loss for air bag debacle

On the heels of the massive air bag recall, auto manufacturers are now facing class action litigation.

According to the new lawsuits, car makers were aware of defects in Takata air bags, but proceeded anyway because Takata was cheaper that less volatile alternatives. If the allegations are true, the decision was both dastardly and short-sighted.  What did they know and when?

Largest recall in history triggers massive class action

Takata air bags were used in millions of cars manufactured by virtually all of the major car companies. But the bags are prone to exploding improperly or without warning, especially if exposed to high temperatures or humidity. At least 22 people have been killed and nearly 200 injured by hot shrapnel and/or the force of the inflating air bags.

The blame was previously laid on Takata for defective design and manufacturing of air bag inflators. The class action lawsuits contend General Motors knew of the defect as far back as 2003, and was informed of continuing problems and actual air bag injuries at multiple points before it finally issued a recall in 2014. Likewise, red flags about Takata inflators were alleged raised - and ignored - at all the automakers named in the lawsuits.

What do the class action lawsuits seek?

The manufacturers are already replacing the defective Takata air bags, at no cost to those consumers. However, because the recall is unprecedented in size, it will take years to fix all of the affected vehicles. Manufacturers are prioritizing the oldest models and cars sold in hot and humid Southern states, hopefully to fix the air bags before they detonate and hurt anyone else.

In any lawsuit, you have to show damages. You can't sue because you might be hurt by a defective air bag. So the class action lawsuits against GM, Chrysler Fiat, Volkswagen and Mercedes-Benz take a different tack. Their suit assets that the cover-up and later recall caused car buyers to pay more for their vehicles than if the defects had been disclosed and dealt with earlier. If the lawsuits succeed, the economic loss award would be distributed to car owners as a direct payment, in addition to the recall repairs.

Similar class actions have already been settled by Toyota, Honda and other car makers. In all, the recalls involve an estimated 69 million inflators in 42 million vehicles made by 19 different car companies.

 

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