Ford Agrees to Pay $299.1 Million to Resolve Air-Bag Lawsuit

By Micah Maidenberg 

Ford Motor Co. has agreed to pay at least $299.1 million to resolve a class-action lawsuit over its use of defective Takata Corp. airbag inflaters in more than 6 million vehicles.

The proposed settlement was reached after several weeks of negotiation, said Peter Prieto, the lead counsel for the plaintiffs in the case, owners and lessees of Ford vehicles that included the Takata airbag inflaters. Drivers sued Takata, Ford and other car makers over the faulty parts more three years ago. The plan must be approved by Judge Federico A. Moreno of the U.S. District Court for the Southern District of Florida in Miami.

The proposed settlement covers only economic issues discussed in the class-action lawsuit; it doesn't resolve personal injury or property damage claims, or those brought by auto recyclers.

Most of the money Ford agreed to spend would go to drivers of affected vehicles, who would be able to submit claims for reimbursement to an administrator for review. Eligible costs include towing or storing affected vehicles, transportation expenses related to the recall and wages lost during the recall process.

The car maker also agreed to fund a rental-car program to cover the costs of loaner cars for drivers whose vehicles were recalled and are awaiting repairs or replacement parts. Ford would also pay attorney fees and other costs related to the settlement.

"Safety is our priority. We remain focused on working with our customers to get their vehicles repaired," a Ford spokeswoman said in an email.

If Judge Moreno agrees with the deal, class members will be notified and will have a chance to approve or deny it, Mr. Prieto said. Should class members approve the settlement, the judge will schedule a hearing to approve or reject the agreement.

"We expect...virtually the entire class will approve the deal and we hope the court will approve it, just like it did in six prior settlements" related to the Takata airbag inflaters, Mr. Prieto said. Toyota Motor Corp., BMW AG, Mazda Motor Corp., Subaru Corp., Nissan Motor Co. and Honda Motor Co. have also settled Takata-related class-action suits against them.

Shares in Ford dropped 1.2% Monday to close at $10.85.

Car manufacturers have issued recalls for at least 42 million vehicles in the U.S. that used faulty Takata airbag inflaters that can explode and even hit drivers with shrapnel when deployed.

Write to Micah Maidenberg at [e-mail]

(END) Dow Jones Newswires

July 16, 2018 18:57 ET (22:57 GMT)

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