Volkswagen's (OTC: VWAGY) U.S. branch has become the seventh automaker to agree to a settlement regarding the recall of vehicles equipped with the potentially hazardous Takata airbag inflators. The $42 million settlement agreement was filed in the U.S. District Court for the Southern District of Florida, Miami, and covers roughly 1.35 million VW vehicles.
The suit was filed by the owners of affected vehicles against VW of American, Inc., and Audi of America, LLC., along with their affiliates.
"We are pleased that after three years of hard-fought litigation we have reached a settlement with Volkswagen that will bring significant monetary and other relief to more than a million class members," Peter Prieto, legal representation for the vehicle owners, told reporters.
"This agreement will not only expand awareness of the Takata recalls and improve driver safety by accelerating the removal of defective airbags from our roads, but will provide compensation to affected VW and Audi consumers," Prieto continued.
The defective airbag inflators may explode after long-term exposure to heat and humidity, blasting metal debris through the air. Since 2009, the faulty airbag inflators have been blamed for over 400 injuries and the deaths of 19 people in the U.S., though there may be more cases that have not yet been identified.
So far, settlements regarding the Takata inflators have cost automakers $1.5 billion, most of which has gone towards the recall efforts. According to Reuters, the Takata recall, covering tens of millions of vehicles, is the largest automotive recall in history.
Worldwide, Takata airbag inflators have been linked to at least 28 deaths. The global recall effort has included 19 major automakers covering 100 million faulty inflators, 67 million from the U.S.
Among other similar settlements are a $605 million civil settlement from Honda, a $299.1 million settlement from Ford, and a $131 million settlement from BMW (OTC: BMWYY). Each of these settlements was made between the automakers and the owners of the vehicles covered in the recall.
The funds are meant to cover the cost of rental cars, lost wages, childcare costs, and any other out-of-pocket expenses that the vehicle owner may have accrued due to the recall, specifically the process of seeking repairs.
According to the court filing, more than a third of the VW and Audi vehicles covered in the Takata recall have yet to be repaired. Some automakers also have yet to reach settlement agreements with vehicle owners.
"We will continue to vigorously prosecute our claims against Mercedes Benz (OTC: DMLRY), General Motors (NYSE: GM) and FCA (NYSE: STLA) to ensure that our clients obtain the relief they deserve," Prieto said.