Whether it was natural disasters, cyberattacks, corporate crises, political uncertainty or terrorist activity, risk events made high-profile and often sobering headlines in 2017. Although by no means exhaustive, the following review of the year in risk can help risk professionals learn from the past so that they can better prepare for future threats.
Volkswagen to Pay $4.3 Billion in Additional Penalties for Emissions Fraud
As a result of Volkswagen’s long-running practice of cheating on mandatory emissions tests in order to sell diesel vehicles in the United States, the U.S. Department of Justice announced that the automaker will plead guilty to three criminal felony charges, including conspiracy to commit fraud, obstruction of justice, and making false compliance statements. The automaker will pay a $2.8 billion criminal penalty and $1.5 billion in civil penalties to settle various environmental and financial charges. Last year, the company paid almost $15 billion to settle civil actions with consumers and regulators.
Takata Agrees to $1 Billion Airbag Settlement
Japanese auto parts company Takata pled guilty to U.S. fraud charges and agreed to pay a $1 billion settlement to compensate automakers and victims affected by defective airbags it manufactured. At least 16 deaths and 180 injuries have been attributed to exploding Takata airbags, resulting in recalls of some 42 million vehicles across dozens of brands— one of the largest recalls in U.S. history. Three company executives were also charged with falsifying crash data and, in June, Takata filed for Chapter 11 bankruptcy. Later in the year, Toyota, Subaru, Mazda and BMW also agreed to pay a combined $553 million to compensate car owners affected by the airbag recall, while Nissan settled a class action lawsuit of its own for $97.7 million and Honda agreed to a $605 million settlement.