Current Events in February 2017

The ink had not yet dried on a judge's order fining airbag-maker Takata $1 billion for wire fraud when a class-action lawsuit was filed in Florida charging that Ford, Honda, Nissan, and Toyota had installed the defective airbags in cars for years while knowing they were dangerous.

“For over a decade, Takata lied to its customers about the safety and reliability of its ammonium nitrate-based airbag inflators,” said Acting Assistant U.S. Attorney General Blanco after a Detroit federal court judge imposed the fine Monday. “Takata abused the trust of both its customers and the public by allowing airbag inflators to be put in vehicles knowing that the inflators did not meet the required specifications."

The Florida lawsuit charges that it was not only Takata that knew of the hazards presented by the faulty airbag inflators. It alleged that automakers knew of the dangers but kept pressuring suppliers to keep costs down and continued using Takata airbags even though they knew they were prone to explode and spew deadly shrapnel into the passenger compartment.

At least eleven people have died in the U.S. and more than 100 have been injured by the airbags, and automakers have staged a massive recall of more than 70 million airbags in 42 million vehicles.

The Florida suit was filed by attorney Kevin Dean, who objected to the Takata plea deal and charged that documents filed with the court showed that automakers were not victims of a Takata cover-up but accomplices.

Judge George Caram Steeh approved the settlement anyway, saying that Dean's objections could be handled in a separate civil suit.

Honda strongly denied the allegations in the Florida suit, saying it "reasonably believed" they were safe. 

The financial crisis, which deepened an existing recession, was a major blow to the U.S. economy.

Since then, the nation has been on a slow path toward recovery. Today, many consumers are feeling a lot better than they did a few years ago. Baby Boomers, however, are among the least likely to feel that way.

A study commissioned by the Bankers Life Center for a Secure Retirement found only 2% of middle income Boomers think the economy has fully recovered. Sixty-five percent don't think they have benefited at all from the recovery.

And while nearly all the Boomers in the survey said they expect to retire one day, the study found a near universal adjustment to just what form retirement will take.

Savings and earnings have fallen

Here are a couple of reasons why: among the group saying it has not benefited from the recovery, more than half say their money in savings is less than before the crisis. Four out of ten say they are earning less money than they did a decade ago.

Back then, 45% of middle income Boomers said they expected to have no debt in retirement, living in a home with no mortgage. Today, only 34% have that expectation.

Boomers contemplating retirement are also planning to be more dependent on Social Security income. Ten years ago, 40% of Boomers said they expected their retirement savings would be their primary income source. Today, it's 34%.

It's no surprise, then, that many Boomers appear to be reconsidering plans to stop working. The study shows nearly half of Boomers -- 48% -- plan to expect to hold down a full or part-time job after they reach retirement age. Before the financial crisis, it was just 35%.

"Ten years ago, Baby Boomers had a clear vision of what a personally satisfying retirement looked like," said Scott Goldberg, president of Bankers Life. "But today, many are realizing they will not be as financially independent in retirement as they once expected."

What to do

If you are in your 50s or 60s, you don't have the luxury of a lot of time to build wealth for your golden years. But there are steps you can take now to become better prepared. They involve cutting expenses and increasing savings.

First, AARP suggests defining what you want retirement to be. And be specific. If you want to travel, for example, think about what kind of travel. And it should go without saying, you need to be practical.

Next, add up your assets, both financial and personal. If you have developed a skill over the years related to a favorite hobby, maybe that can be a source of income after you quit your day job.

Decide when you want to start collecting Social Security. The monthly payments will be a lot larger if you can put it off until age 70.

Analyze your budget, looking for ways to trim spending. Just a little each month can add up to growing savings.

Lakeview Cheese and Bashas’ Family of Stores are recalling various types of Colby cheese that may be contaminated with Listeria monocytogenes.

No illnesses have been reported to date.

The following nine Colby cheese products, including fixed-weight and bulk- cut, random-weight items, are being recalled:

The recalled products, manufactured by Guggisberg Cheese and by Deutsch Kase Haus, were distributed by Lakeview Cheese to Bashas’ Family of Stores, and sold in Bashas’ and Food City supermarkets’ Arizona meat departments under the grocery brands’ private label.

What to do

Customers who purchased the recalled products between September 1, 2016, and February 21, 2017, may return them to the place of purchase for a full refund.

Consumers with questions may call Bashas’ Family of Stores’ customer service department at 480-883-6131.

Takata has reportedly agreed to set up a fund to compensate victims of its faulty airbags, which have been blamed for 11 deaths and hundreds of injuries in the United States. The $125 million fund is part of a plea deal expected to be aired in a federal courtroom in Detroit on Monday.

More than 70 million of the defective airbags have been recalled because their inflator can explode and send deadly shrapnel into the passenger compartment.

The recall process has been seen as painstakingly slow by consumers, although regulators and automakers say they have been working as quickly as possible to remove and replace the defective units.

Last December, the National Highway Traffic Safety Administration (NHTSA) issued an order that set deadlines for when automakers must have replacement parts available for customers. 

“NHTSA is doing everything possible to make sure that there are no more preventable injuries or deaths because of these dangerous airbag inflators,” said then-NHTSA Administrator Dr. Mark Rosekind. “All vehicle owners should regularly check their vehicles for recalls at SaferCar.gov and go get them fixed at no cost as soon as replacement parts are available.”

It's not that easy, of course. Consumers and dealers alike have been frustrated by a lack of parts. Some automakers have asked dealers to make loaners available but most have not, leaving consumers with little choice but to drive around with a lethal explosive device just inches from their face. 

The fund is said to be similar to the one General Motors set up in 2014 to deal with the deaths and injuries that resulted from faulty ignition switches on some of its smaller sedans. Press reports in the Wall Street Journal and elsewhere say the fund will be administered by Kenneth Feinberg, who also ran the GM fund and handled compensation for victims of the Sept. 11, 2001, terrorist attacks.

$1 billion total

The fund is part of what's expected to be $1 billion that Takata will pay as part of an agreement to plead guilty to criminal wire fraud for allegedly providing false safety reports to automakers. Much of the remaining amount will be used to reimburse automakers for the expenses they have incurred in conducting the recalls. 

Takata had earlier turned aside a plea by Sen. Richard Blumenthal (D-Conn.) that it establish a fund to compensate victims, saving them the expense and trauma of pursuing legal action against the company. He said Takata only agreed to the action "because they had a gun to their head."

Blumenthal noted that General Motors had set up its fund just months after recalling millions of cars with defective ignition switches, and he called the $125 million "paltry" compared with the automakers' fund.

Settling the court case is thought to be the last hurdle in Takata's attempt to find a buy for the troubled company, which would otherwise likely face bankruptcy.