Japanese auto parts maker Takata Corp has pleaded guilty to fraud and now has to pay a $1bn (£800m) penalty fine.
The company admitted to hiding evidence that its air bag inflators were liable to explode with too much force, resulting in pieces of shrapnel flying into passengers and drivers. The serious fault was blamed for at least 16 deaths around the world, with 11 in the US, as well as more than 180 injuries.
More than 42 million vehicles and 69 million inflators were recalled – the biggest in US automotive history, according to AP.
Yoichiro Nomura, Takata's chief financial officer offered the guilty plea on behalf of the car parts company in a Detroit federal court. He acknowledged that Takata will merge with another company or be sold off.
The details of the penalties include $850m (£683m) in reparation to carmakers, $125m (£100m) for victims and families and a $25m (£20m) criminal fine.
Three former Takata executives are charged with falsifying test reports. The Justice Department is trying to extradite the former employees from Japan so they can face criminal misconduct charges in the US.
Air bags were dangerously flawed
Takata's inflators utilise ammonium nitrate to set off a small explosion to activate the air bags in the event of a crash. If exposed to sustained high temperatures and humidity, the chemical can deteriorate and burn too quickly. This can cause a metal canister to explode.
Dozens of lawsuits taken against Takata and five carmakers allege that the car companies were aware that the products were dangerous but continued to use them to save on costs.
Takata is still facing many consumer and state-level lawsuits that could lead to the company paying out millions more in compensation.
Court documents stated: "For the automotive defendants to call themselves victims insults the real victims here — hundreds of people who have been seriously injured or killed by a device that was [supposed] to protect them, and tens of millions of vehicle owners who have been forced to bear the risk of such injury and incurred substantial economic damages."