Toyota To Pay $1.2-Billion Settlement in Criminal Probe Related to 2009-'10 Recalls | Edmunds

Toyota To Pay $1.2-Billion Settlement in Criminal Probe Related to 2009-'10 Recalls


Just the Facts:
  • Toyota will pay a $1.2-billion settlement in a criminal probe related to its handling of 2009-'10 vehicle recalls linked to unintended acceleration, the U.S. Justice Department announced on Wednesday.
  • "Rather than promptly disclosing and correcting safety issues about which they were aware, Toyota made misleading public statements to consumers and gave inaccurate facts to members of Congress," said Attorney General Eric Holder in a statement. "When car owners get behind the wheel, they have a right to expect that their vehicle is safe."
  • Toyota said it has since "gone back to basics at Toyota to put our customers first" in a statement explaining the settlement.

NEW YORK Toyota will pay a $1.2-billion settlement in a criminal probe related to its handling of 2009-'10 vehicle recalls linked to unintended acceleration, the U.S. Justice Department announced on Wednesday.

"Rather than promptly disclosing and correcting safety issues about which they were aware, Toyota made misleading public statements to consumers and gave inaccurate facts to members of Congress," said Attorney General Eric Holder in a statement. "When car owners get behind the wheel, they have a right to expect that their vehicle is safe."

Toyota said it has since "gone back to basics at Toyota to put our customers first" in a statement explaining the settlement.

"At the time of these recalls, we took full responsibility for any concerns our actions may have caused customers, and we rededicated ourselves to earning their trust," said Christopher P. Reynolds, chief legal officer for Toyota Motor North America, in a statement posted on the company's Web site on Wednesday. "In the more than four years since these recalls, we have gone back to basics at Toyota to put our customers first.

"We have made fundamental changes across our global operations to become a more responsive company — listening better to our customers' needs and proactively taking action to serve them."

Toyota said it has addressed what it calls the "sticky pedal and floor mat entrapment issues with effective and durable solutions."

The government said this is the largest penalty ever imposed against an automaker to settle a criminal probe. The government also said the action should serve as a warning to other automakers. The government's decision in the Toyota case is expected to have an impact on its handling of GM's deadly ignition-switch recall.

"Other car companies should not repeat Toyota's mistake," Holder said. "A recall may damage a company's reputation, but deceiving your customers makes that damage far more lasting."

Under the agreement, the government agrees to defer prosecution and then dismiss its case against Toyota, as long as Toyota makes the monetary payment.

The agreement also provides for an independent monitor to review policies and procedures relating to Toyota's safety communications process, its process for internally sharing vehicle accident information and its process for preparing and sharing certain technical reports.

The criminal investigation looked into whether Toyota provided false or incomplete statements to the National Highway Traffic Safety Administration and how it handled complaints.

Toyota has already paid $1.6 billion to car owners in civil cases linked to the recalls and paid approximately $34 million in federal fines in 2010 and 2012 for delays in safety-defect reporting.

Toyota recalled more than 10 million vehicles for problems related to unintended acceleration in 2009 and 2010, including the 2009-'10 Toyota Corolla.

Edmunds says: Toyota pays a costly fine and serves as an example to other automakers.

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