US files charge against Toyota, $1.2B penalty

[BenK]

FYI...no OEM is immune from bean counter management decisions...



US files charge against Toyota, $1.2B penalty

US files charge against Toyota, $1.2B penalty
By ERIC TUCKER and TOM KRISHER, Associated Press
Updated 11:20 am, Wednesday, March 19, 2014


WASHINGTON (AP) — The U.S. government announced a $1.2 billion settlement with Toyota Motor Corp. on Wednesday and filed a criminal charge alleging the company defrauded consumers by issuing misleading statements about safety issues in Toyota and Lexus vehicles. The penalty is the largest of its kind ever imposed on an auto company, the Justice Department said.

The action concludes a yearslong criminal investigation into the Japanese automaker's disclosure of safety problems, which focused on whether Toyota was forthright in reporting problems to unintended acceleration troubles.

The company admitted to misleading consumers and regulators in providing assurances that it had addressed the problems — which became public in 2009 following a car crash in San Diego that killed a family of four — through a limited safety recall of certain models. Toyota knew at the time that other models susceptible to the same acceleration problem had not been recalled and also took steps to conceal a separate acceleration problem related to a faulty pedal, according to the Justice Department.

"In other words, Toyota confronted a public safety emergency as it if were a simple public relations problem," Attorney General Eric Holder said at a news conference.

The company faces a criminal wire fraud charge in New York that prosecutors say they will move to dismiss in three years if Toyota complies with the terms of the deal. Under a deferred prosecution agreement, an independent monitor will review policies, practices and procedures at the company.

No Toyota executives were charged under the deal. U.S. Attorney Preet Bharara of the Southern District of New York, whose office brought the case, said he expected the agreement to be a "final resolution."

"As you might imagine, when you have a company with individuals who are responsible for unlawful conduct in other jurisdictions, there are problems of evidence and problems of proof," he said.

In a statement, Toyota said that at the time of the 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 of Toyota Motor North America.

"In the more than four years since these recalls, we have gone back to basics at Toyota to put our customers first," he said.

Toyota said it had "made fundamental changes to become a more responsive and customer-focused organization, and we are committed to continued improvements."

Starting in 2009, Toyota issued massive recalls, mostly in the U.S., totaling more than 10 million vehicles for various problems including faulty brakes, gas pedals and floor mats. From 2010 through 2012, Toyota Motor Corp. paid fines totaling more than $66 million for delays in reporting unintended acceleration problems.

The settlement continues a string of bad publicity for Toyota, which before the unintended acceleration cases had a bulletproof image of reliability. Since the cases surfaced, the company's brand image has been damaged and it has lost U.S. market share as competition has intensified.

Last year, Toyota agreed to pay more than $1 billion to resolve hundreds of lawsuits claiming that owners of its cars suffered economic losses because of the recalls. But that settlement did not include wrongful death and injury lawsuits that have been consolidated in California state and federal courts.

In December, Toyota filed court papers after a four-year legal battle saying that it's in settlement talks on nearly 400 U.S. lawsuits, but other cases aren't included in the talks.

The negotiations come less than two months after an Oklahoma jury awarded $3 million in damages to the injured driver of a 2005 Camry and to the family of a passenger who was killed.

The ruling was significant because Toyota had won all previous unintended acceleration cases that went to trial. It was also the first case where attorneys for plaintiffs argued that the car's electronics — in this case the software connected to a midsize Camry's electronic throttle-control system — were the cause of the unintended acceleration.

At the time, legal experts said the Oklahoma verdict might cause Toyota to consider a broad settlement of the remaining cases. Until then, Toyota had been riding momentum from several trials where juries found it was not liable.

Toyota has blamed drivers, stuck accelerators or floor mats that trapped the gas pedal for the acceleration claims that led to the big recalls of Camrys and other vehicles. The company has repeatedly denied its vehicles are flawed.

No recalls have been issued related to problems with onboard electronics. In the Oklahoma case, Toyota attorneys theorized that the driver mistakenly pumped the gas pedal instead of the brake when her Camry ran through an intersection and slammed into an embankment.

But after the verdict, jurors told AP they believed the testimony of an expert who said he found flaws in the car's electronics.

Toyota also had to pay millions for recalls, as well as a series of fines totaling $68 million to the NHTSA, the U.S. government's road safety watchdog, for being slow to report acceleration problems.

Still, the payments won't hurt Toyota's finances very much. In its last fiscal quarter alone, Toyota posted a $5.2 billion profit, crediting a weak yen and strong global sales.

Toyota's U.S. market share, however, has fallen more than 4 percentage points since unintended acceleration came to the forefront in August of 2009, when a California Highway Patrol officer and three others were killed in a fiery crash. The officer's runaway car was traveling more than 120 mph when it crashed and burst into flames. One of his family members called police about a minute before the crash to report the vehicle had no brakes and the accelerator was stuck.

At the time, Toyota controlled 17.8 percent of the U.S. market. Gas prices were high, playing to Toyota's fuel-efficient small cars and hybrids. Detroit automakers were in serious financial trouble and had few fuel-efficient cars for sale.

By last month, though, Toyota's share fell to 13.3 percent, according to Autodata Corp., as the company faced intense competition in small and midsize cars from resurgent Detroit automakers and Korean brands Hyundai and Kia.

The Toyota criminal charge and settlement could foreshadow what's in store for General Motors. The same U.S. attorney's office is investigating the Detroit auto giant for its slow response to a faulty ignition switch problem in older compact cars that has been linked to at least 31 crashes and 12 deaths. NHTSA also is investigating whether GM withheld information about the problem and could fine the automaker $35 million.

__

Krisher contributed from Detroit

[Perrysburg_Dodg]

Spoon the article I linked didn't have that information and no I did not read the complete first story as I was at work and surfing RV.net between floor calls my bad. Some nights I'm very busy others not so much, kind of like you I would think.

As far as this officer goes here are some excerpts about him.

"Eventually he moved to his final Air Force commission in Sacramento, achieving the rank of Sergeant E4. He was well regarded amongst his friends and fellow soldiers.

Saylor's life of service didn't stop with the Air Force, however. He joined the California Highway Patrol after the Air Force, serving for 20 years.

He left the dealership at 9:35 in the morning, returned to work at the California Highway Patrol Special Duties School and finished his shift at 2:00 p.m. It being Friday, he was looking forward to spending time with his family.
That afternoon Saylor returned home to the family's residence in Chula Vista, where he picked up his wife, daughter and brother-in-law (Cleofe's brother, Chris Lastrella). Officer John Concepcion, Saylor's close friend at the CHP, said the family usually spent Friday evenings at Mahala's soccer practice. They were on their way to such a practice on Friday afternoon when their Lexus experienced problems."

He did not seem to be a stupid person IMO. Did he panic no one will ever know. You do not expect to see this behavior in a person trained to keep their emotions in check. But as you pointed out we all are human.

I now know why the accelerator pedal on my wifes 200 is so short.

Don

[spoon059]

Ric Flair wrote:
Just a question:

Since this forum section is for "Tow Vehicles", and considering Toyota doesn't make one, shouldn't this thread be moved to a different section?

😛

I think he is trying to be cute and make the comment that since Toyota doesn't make a 1 ton truck, its not a real tow vehicle. Of course I would hate to burst his bubble and point out that in the grand scheme of things, there is very little difference between a 8000 lbs GVWR vehicle and a 10,000 lbs GVWR when you compare it to a 33,000 lbs GVWR.

[Perrysburg_Dodg]

Ric Flair wrote:
Just a question:

Since this forum section is for "Tow Vehicles", and considering Toyota doesn't make one, shouldn't this thread be moved to a different section?

😛

Tundra and Tacoma come to mind, along with their SUV's and mini vans.

Don

[Bumpyroad]

Ric Flair wrote:
Just a question:

Since this forum section is for "Tow Vehicles", and considering Toyota doesn't make one, shouldn't this thread be moved to a different section?

😛

I guess my Highlander that tows my TT isn't actually a toyota?
bumpy

[Ric_Flair]

Just a question:

Since this forum section is for "Tow Vehicles", and considering Toyota doesn't make one, shouldn't this thread be moved to a different section?

😛

[spoon059]

45Ricochet wrote:
I certainly wouldn't pay out $1.2 BILLION if I had a slim case. No case guess I'd pay up. It's pretty oblivious big T had no case because of the facts. Chi* happens with all of them, it's how the corporation reacts to a known problem. That speaks volumes. Step up, own up, fix it and move on. Sweeping it under the rug is just asking for high dollar suits to get involved.

freudian slip?

[spoon059]

Perrysburg Dodgeboy wrote:
Last point, this vehicle was a loaner car from a Lexus Dealership and was loaned out days before. The car was reported to have had a uncontrolled acceleration. The driver reported this to the dealership. But the person did not say the mat or mats were stuck under the peddle.

Don, did you actually read the linked article? This is an exact quote from the article...

article wrote:
Bernard noticed the floor mat had become stuck under the accelerator pedal. After he cleared the mat, he drove normally, although likely a little shaken.

When Bernard returned the vehicle to Bob Baker Toyota/Lexus on the evening of August 25, he reported the problems to the receptionist.

"I think the mat caused it," he told the receptionist upon handing her the keys. "You need to tell someone."

FYI, Bernard is the name of the guy that used the same exact vehicle immediately before the CHP officer did.

Also, I am a police officer. I work with several idiots. I'm sure everyone here has either run into, or heard a story about a stupid cop. I don't know the CHP officer that died, I make ZERO representation about his level of training or intelligence. I am simply stating the fact that police officers are all human. In every subsection of human, you are going to find idiots. In my 12 years on the job, I have never received training in how to remove a stuck carpet from under the accelerator. People make the argument that this simply couldn't be the cause because he is a well trained cop. One has nothing to do with the other.

I potentially understand the reason he didn't turn off the car, you have to hold the button for 3 seconds. I can assume that he had driven the car before and turned it off before by holding the button for 3 seconds... but I don't know for certain. I do know that ANY vehicle can be placed in neutral (or clutch pushed in) and the vehicle can coast to a stop. Also, the braking action wouldn't be fighting the acceleration from the engine at that point.

Bottom line, I have heard ZERO factual evidence that there was anything other than misplaced floormats causing this accidents. Toyota's recall was threefold... They visually check every vehicle for improperly placed floormats and removed all non factory floormats. The shimmed the accelerator pedals to place them higher (further from the floormats) to prevent then from getting stuck under misplaced floormats. Finally, they installed a brake override feature that cuts the "drive by wire" input when the brakes are pushed.

All of these "fixes" were put in place to prevent problems with floormats. If the NHTSA had ANY proof at all that anything other then floormats caused this issue, why weren't there any other requirements of the recall? I have a 2010 Tundra and a 2008 Camry. They were both subject to these recalls and that is all that was "fixed".

[Fast_Mopar]

I really don't care if it was a Toyota or another manufacturer. I really don't care if it was a law enforcement officer driving or not. Floor mats or no floor mats, anyone with common sense should have been able to shift into neutral and gently slow the car down, maybe even using the handbrake if necessary, long before reaching 100 mph. But, I guess some people think it is better to just sue others since it is easier than working for your whole life.

[Perrysburg_Dodg]

DavinD wrote:

Here you go

From your link
"Back in August, a family of four crashed in a Lexus ES350 after the driver noticed he couldn't get the car to slow down. With a floor mat stuck underneath the accelerator pedal, the car traveled out of control, through busy intersections under its own uncontrollable power.

Traveling at a rate of over 100 MPH, the car finally came to a stop after it bounded through an intersection at a dead-end road, swiped another car, crashed through a fence, jumped over a dirt berm and landed into a riverbed below. All four people died from the injuries sustained in the crash and the ensuing fire. The driver of the other vehicle escaped with minor injuries."

From a different link:

According to the lawsuit filed by Mr Saylor's family, the Lexus accelerated on its own and hit speeds of more than 100mph before smashing through a fence and crashing.
A 911 emergency call made by Mr Lastrella after the crash blamed a stuck accelerator for the accident, according to the complaint.
Toyota said in a statement in December that a police report on the crash found 'that the cause was an incompatible all-weather floor mat from a Lexus SUV model that was installed incorrectly in the ES 350 sedan at the dealership', according to Bloomberg.
It concluded that the accelerator pedal had become trapped either in the grooves of the mat, which was larger than the correct model for the car, or underneath it.

The report also found that clips used to hold it in place were not fitted, possibly allowing it to slip forwards.
A statement from Toyota said: 'We're pleased the court has affirmed the private, amicable settlement that Toyota and the Saylor and Lastrella families reached in good faith through mutual respect and cooperation.'

Bob Baker Lexus, the San Diego dealership which had loaned the Lexus ES350, had objected to the settlement because it still faces negligence claims.
Larry Willis, representing Bob Baker Lexus, told Bloomberg that a subsequent investigation revealed the accident may have been caused by an electrical fault.
LINK

Point one, this car was driven by a CHP Officer, are they really trying to say a trained CHP Officer could not figure out how to dislodge a stuck floor mat? No really come on.

Point two, From the picture of the car it was totally burned with the whole interior burned out. So just how did they determine the floor mat or mats were the cause of the uncontrolled acceleration? Again this crash was one with a highly trained CHP Officer behind the wheel. All police officers are trained in high speed driving and crash avoidance. They are trained to stay calm under pressure! I will say this again, do you truly think if the floor mat was stuck under the peddle this guy would not reach down and yank it backwards? Not likely.

Last point, this vehicle was a loaner car from a Lexus Dealership and was loaned out days before. The car was reported to have had a uncontrolled acceleration. The driver reported this to the dealership. But the person did not say the mat or mats were stuck under the peddle.

What I would like to see is the actual police report not a reporters story.

BTW I have no vendetta against Toyota, but there are way to many bodies here to think there was not a problem. And yes I do agree that some cases were faked to try and make an easy payday. That is the sick and sad part.

Don

[RobertRyan]

DavidD wrote:
Interestingly, my wife's 07 Camry wasn't included in the recall because it was built in Japan, not NA.

The same supplier also contributed parts to GM vehicles which were replaced after a general recall.

[DavinD]

RobertRyan wrote:

Perrysburg Dodgeboy wrote:
So let me get this right......it's our Australian friends contention that it was a North American issue only right? My link seems to disprove that theory. He and others also whould want us to believe that this was blown way out of proportion. I bet the people that lost their lives may disagree with you...if they could. Still others in a round about way blame the drivers still holding on to their theory that ALL of the crashes are floor mat issues not something else. Talk about blinders good God people.

Toyota is a for profit company and has been cought liying and cheating their customers many times. I think the Toyota fans are even more loyal the the blue oval fan club!

Primarily Yes. Seems to be after ownership went from the US Government to GM, the complaints stopped. We get a lot of our Vehicles from Toyota Australia and Japan. They recalled some US built or parts sourced vehicles.None of the "Unintended Acceleration" hysteria you got in the US. The bulk of those "Global Vehicle recalls"
came from NA.

Approximately 1.7 million vehicles are subject to both. CCertain related Lexus and Pontiac models were also affected.

Primarily a NA problem.

A Lot of the Toyotas sold in Europe have parts sourced from NA.

Interestingly, my wife's 07 Camry wasn't included in the recall because it was built in Japan, not NA.

[RobertRyan]

Perrysburg Dodgeboy wrote:
So let me get this right......it's our Australian friends contention that it was a North American issue only right? My link seems to disprove that theory. He and others also whould want us to believe that this was blown way out of proportion. I bet the people that lost their lives may disagree with you...if they could. Still others in a round about way blame the drivers still holding on to their theory that ALL of the crashes are floor mat issues not something else. Talk about blinders good God people.

Toyota is a for profit company and has been cought liying and cheating their customers many times. I think the Toyota fans are even more loyal the the blue oval fan club!

Primarily Yes. Seems to be after ownership went from the US Government to GM, the complaints stopped. We get a lot of our Vehicles from Toyota Australia and Japan. They recalled some US built or parts sourced vehicles.None of the "Unintended Acceleration" hysteria you got in the US. The bulk of those "Global Vehicle recalls"
came from NA.

Approximately 1.7 million vehicles are subject to both. CCertain related Lexus and Pontiac models were also affected.

Primarily a NA problem.

A Lot of the Toyotas sold in Europe have parts sourced from NA.
No Unintended Claims in Australia.

Toyota Australia confirmed in 2010 that local models were unaffected by the unintended acceleration issue, due to a unique supply of the components affected in US models.

There have still been no reports of unintended acceleration relating to Toyota models in Australia.

[DavinD]

Perrysburg Dodgeboy wrote:

Lyrikz wrote:

Ron3rd wrote:
Bad on Toyota.

This is an old article. That happened awhile back. This isnt new.

Also, that family that died. They were in a lexus, loaner car, and the second set of floormats caused the pedal to jam when he mashed on the gas. The driver proceeded to not turn off the car, but instead pump the brakes until the booster blew out of the car. Tragic? Yes. Toyotas fault. No.
It was the dealers fault for double stacking those floormats. That had nothing to do with unattended acceleration.

You may want to do some reading up on this. Then come back and provide a fes links other Toyota links to support you post. Like GM this went on for a while and Toyota did the blame game. They have even admited to it just like GM has.


Greed and bean counter mentality will get them every time.

Don

Here you go

[45Ricochet]

I certainly wouldn't pay out $1.2 BILLION if I had a slim case. No case guess I'd pay up. It's pretty oblivious big T had no case because of the facts. Chi* happens with all of them, it's how the corporation reacts to a known problem. That speaks volumes. Step up, own up, fix it and move on. Sweeping it under the rug is just asking for high dollar suits to get involved.
Ask Paula Dean her advice :E
Having said this we had a 4runner for like 7 years, great vehicle.

[Targa]

I feel horrible for the families involved in all of this. I think the only difference between Toyota, GM, Chrysler/Fiat/Dodge/Ram (whatever it is that their going by now) and the rest of the manufactures out there is that it hasn't happened yet, not that they have any stronger business ethics than Toyota or GM, it just hasn't happened yet.