Toyota is going to pay $1.2 billion to settle safety issues
Toyota Motor Corporation is going to pay $1.2 billion to resolve a criminal investigation in the way the company handled consumer complaints regarding safety issues, according to the U.S. Justice Department. Toyota acknowledged that it misled American consumers by concealing deceptive statements about two safety issues. One of the issues involved unintended acceleration. This is the largest penalty levied by the U.S. on an auto company.
Toyota was hit with criminal charges, but agreed to defer and drop them if the company allowed an independent monitor to review its safety practices. Toyota will be on probation for three years. Toyota will be taking a $1.2 billion after-tax charge for the settlement, according to Reuters.
“Entering this agreement, while difficult, is a major step toward putting this unfortunate chapter behind us,” stated Toyota’s North American legal chief Christopher Reynolds.
Toyota has been dealing with hundreds of lawsuits in regards to acceleration problems. Toyota was put in the spotlight after the deaths of a California highway patrolman and his family. The accident was caused by the unindented acceleration of a Lexus vehicle. This is why Toyota recalled millions of vehicles in 2009.
Toyota’s public statements about the recall apparently misled the public because the company knew it didn’t recall all the cars that were susceptible to the problems. The unintended acceleration was caused by faulty floor mats. Toyota also took steps to hide another type of unintended acceleration that was caused by pedals getting stuck from regulators. No individuals were charged as part of the settlement.
Toyota received approval on a settlement valued at $1.6 billion last year to resolve claims from Toyota owners that the value of their cars dropped after the problems were brought to attention. Toyota is also negotiating with hundreds of customers that said that they were injured.