Toyota Motor Corp will pay $1.2 billion to resolve a criminal probe into the way in which they handled consumer complaints regarding safety issues, the U.S. Justice Department said Wednesday.
It is “the largest criminal penalty imposed on a car company in the history of the United States,” Attorney General Eric Holder said, and is merited by “shameful” conduct on the company’s part. In addition to paying the penalty, Toyota will “fully admit wrongdoing,” the attorney general added.
Toyota admitted it misled American consumers by concealing and making deceptive statements about two safety issues, each of which caused a type of unintended acceleration, the Justice Department said.
The settlement resolves a four-year investigation by U.S. authorities.
Toyota faces hundreds of lawsuits over the acceleration problems that gained public attention following the deaths of a California highway patrolman and his family, which were reportedly caused by unintentional acceleration of his Toyota Lexus.
The faulty acceleration prompted Toyota to recall millions of vehicles, beginning in 2009.
Last year, Toyota received approval on a settlement valued at $1.6 billion to resolve claims from Toyota owners that the value of their cars dropped after the problems were brought to light. It is also negotiating with hundreds of customers who said they had been injured.
“Toyota has cooperated with the U.S. attorney’s office in this matter for more than four years,” Toyota spokeswoman Carly Schaffner said Wednesday. “During that time, we have made fundamental changes to become a more responsive and customer-focused organization, and we are committed to continued improvements.”
As The Associated Press reminds readers, until now, “Toyota has blamed drivers, stuck accelerators or floor mats that trapped the gas pedal for the acceleration claims that led to the big recall of Camry’s and other vehicles. The company has repeatedly denied its vehicles are flawed.” But, as reported earlier, it also has settled some previous claims.
As the ‘statement of facts’ says, the potential problem with Toyota’s vehicles first drew the nation’s attention in the fall of 2009:
“After a widely-publicized Aug. 28, 2009, accident in San Diego, Calif., that killed a family of four. A Lexus dealer had improperly installed an unsecured, incompatible rubber floor mat (an ‘all weather floor mat’ or ‘AWFM’) into the Lexus ES350 in which the family was traveling, and that AWFM entrapped the accelerator at full throttle. A 911 emergency call made from the out-of-control vehicle, which was speeding at over 100 miles per hour, reported, ‘We’re in a Lexus…and we’re going north on 125 and our accelerator is stuck…there’s no brakes…we’re approaching the intersection…Hold on…hold on and pray…pray.’ The call ended with the sound of the crash that killed everyone in the vehicle.”
Over the next year or so, the statement continues, the company knew it had a problem but misled the public, the National Highway Traffic Safety Administration and Congress.
Perhaps if Toyota did not keep these serious problems under wraps, many fatalities could have been prevented. This settlement amounts to more than one third of Toyota’s $3.4 billion profit in 2013.
Toyota is not the only automaker in the news this week due to safety issues. General Motors has recalled more than 3 million vehicles in recent days because of various problems, and CEO Mary Barra has issued an apology for “the loss of life that has occurred.” A defect in some GM vehicles’ ignition switches has been linked to at least 12 deaths.
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