Japanese auto parts maker Takata pleaded guilty to fraud Monday and agreed to pay a $1 billion penalty for concealing a deadly defect in millions of its air bags.
Takata admitted hiding evidence that its air bag inflaters can explode with too much force, hurling shrapnel into drivers and passengers. The inflaters are blamed for at least 16 deaths worldwide — 11 of them in the United States — and more than 180 injuries. The problem touched off the biggest recall in U.S. automotive history, involving 42 million vehicles and up to 69 million inflaters.
Takata Chief Financial Officer Yoichiro Nomura entered the guilty plea on Takata’s behalf in federal court in Detroit. He also agreed that Takata will be sold or merge with another company.
The penalties include $850 million in restitution to automakers, $125 million for victims and families and a $25 million criminal fine.
Three former executives are charged separately with falsifying test reports. They remain in Japan.
Plaintiffs in dozens of lawsuits against Takata and five automakers allege the car companies knew the products were dangerous but continued to use them for years to save money.
— Associated Press
U.S. stocks ended slightly higher Monday and the Dow Jones industrial index closed at a record high for a 12th straight session as President Trump said he would make a “big” infrastructure statement Tuesday.
The Dow’s streak of record-high closes matches a 12-day run in 1987. The Standard & Poor’s 500-stock index also closed at a record. The energy sector gave the biggest boost to the S&P 500, with the energy index up 0.9 percent.
Trump also announced Monday that said he is seeking a “historic” increase in military spending of more than 9 percent in his first budget proposal. That would raise Pentagon spending by $54 billion.
Shares of U.S. defense companies, including Boeing, Raytheon, General Dynamics and Lockheed Martin, rose after Trump’s announcement.
The Dow was up 15.68 points, or 0.08 percent, to close at 20,837.44; the S&P 500 gained 2.39 points, or 0.10 percent, to 2,369.73; and the Nasdaq composite index added 16.59 points, or 0.28 percent, to 5,861.90.
● Johnson & Johnson said Monday that the average list price of its drugs had increased less than 10 percent each year since 2012 and said that the net price paid for the drugs, after discounts and rebates, was significantly lower. The company released a report with its price increase history in response to outcry over high U.S. drug prices. Johnson & Johnson, which makes Remicade for rheumatoid arthritis and the blood thinner Xarelto, said the average increase in list price for its drugs in 2016 was 8.5 percent, while the net price change was 3.5 percent.
● U.S. businesses boosted their orders for long-lasting manufactured goods in January by the largest amount in three months, but a key category that tracks business investment plans slipped. Orders for durable goods rose 1.8 percent in January after two months of declines, the Commerce Department said Monday, reflecting a big surge in demand for military and commercial aircraft. Excluding the transportation category, orders fell 0.2 percent. Demand in a category that tracks business investment plans fell 0.4 percent, the first decline since September.
● Fewer Americans signed contracts to purchase homes last month as rising prices, higher mortgage rates and a dwindling supply of available homes appeared to frustrate potential buyers. The National Association of Realtors said Monday that its seasonally adjusted pending home sales index fell 2.8 percent, to 106.4, the lowest level in a year. The pending home sales index in the West plunged 9.8 percent in January. Contract signings also fell in the Midwest but rose in the Northeast and inched up in the South.
● Facebook will begin launching a couple of flights a month of its Aquila drone, Jay Parikh, head of engineering and infrastructure, said Monday. The high-altitude drone, which has a wingspan wider than a Boeing 737 and is powered by four electric engines, had its first test flight in June. A report by the National Transportation Safety Board in November said the drone suffered a “structural failure” as it was coming in for landing.
— From news services
● 8:30 a.m.: The Commerce Department releases fourth-quarter gross domestic product.
● 9 a.m.: Standard & Poor’s releases S&P/Case-Shiller index of home prices for December.
● 10 a.m.: The Conference Board releases the Consumer Confidence Index for February.
● Earnings: Target.
— From news services