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]

As of January 28, 2010, Toyota had announced recalls of approximately 5.2 million vehicles for the pedal entrapment/floor mat problem, and an additional 23 million vehicles for the accelerator pedal problem. Approximately 1.7 million vehicles are subject to both. Certain related Lexus and Pontiac models were also affected. The next day, Toyota widened the recall to include 1.8 million vehicles in Europe and 75,000 in China. By then, the worldwide total number of cars recalled by Toyota stood at 9 million. Sales of multiple recalled models were suspended for several weeks as a result of the accelerator pedal recall, with the vehicles awaiting replacement parts. As of January 2010, 21 deaths were alleged due to the pedal problem since 2000, but following the January 28 recall, additional NHTSA complaints brought the alleged total to 37. The number of alleged victims and reported problems sharply increased following the recall announcements, which were heavily covered by U.S. media, although the causes of individual reports were difficult to verify. Government officials, automotive experts, Toyota, and members of the general public contested the scope of the sudden acceleration issue and the veracity of victim and problem reports. Various parties attributed sudden unintended acceleration reports to mechanical, electric, and driver error causes. Some US owners that had their recalled vehicles repaired still reported accelerator pedal issues, leading to investigations and the finding of improper repairs. The recalls further led to additional NHTSA and Toyota investigations, along with multiple lawsuits.Look a LINK unlike some people.

So let me get this right......it's our Australian friends contention that it was a Nort 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!

Don

[mobilefleet]

toyota is far and away better than the junk coming out of detroit these days. Best car I've ever owned

[camp-n-family]

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.

There's the answer for the whole fiasco. Toyota had just taken over as the worlds #1 auto maker and was a threat to domestics in some peoples eyes. One serious and unfortunate accident happened but the cause was never proven. The media blew it out of proportion and people jumped on the bandwagon hoping for new vehicles or a quick buck.

It was funny to see how quickly the number of reported accelerator problems escalated. These "problem" vehicles had been on the roads for years with thousands of miles on them without problems until 2 accidents with similar causes occurred. Once the media caught wind the numbers climbed into the hundreds, then thousands, within weeks as people panicked.

Every manufacturer is going to have issues, nobody is perfect. Some unfortunately will get picked on more than others in attempts to drive them out of fair competition.

ironically when the US Govt. sues GM for 1.4 billion $$$ they will just be getting their own money back or have to loan them the money to pay the fine.

Now that's funny.

[ktosv]

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

Wow, I think I would hate to live in your world were news 6 hours old is "old".

Also, that driver who died was a LEO. I have always struggled with understanding how someone who was probably near professional driver status couldn't get the car to stop.

I also saw a statistic that showed that Toyota had an alarming rate of increase of unintended acceleration complaints prior to this disaster. If I can find it I will post it. I guess they started putting floor mats in more cars?

[spoon059]

lbrjet wrote:
Unintended acceleration was never proven. NASA examined the electronics and couldn't find anything wrong period

What is wrong with you? You are ruining a perfectly good bashing session with common sense and truth... 😃

The fact of the matter is that dealers and/or end users were stacking floormats. The floormats would get underneath the pedals and prevent either full braking or would push the accelerator. It wasn't a design flaw, there was no mechanical problem with the Toyotas.

I've had the same exact problem with my work vehicle, a 2007 Ford Crown Vic. It has vinyl floors and I have vinyl all weather mats too. Sometimes the all weather mat gets up under the gas pedal and it sticks. To solve it, all I have ever done is drag the mat back towards my seat. Never failed, still haven't crashed or died yet.

Members of this forum tend to have an issue with Toyota's for some unknown reason. They sell less than 250K a year, I don't understand why it is such a threat to some people here. I guess I don't really care. In 2009 I researched all the half tons, test drove them all and compared models and prices. The Tundra was the best option for me at the time. I bought it and haven't regretted it for a second. Some people feel the need to justify their purchase by ridiculing the purchases of others. Thankfully my mommy hugged me enough that I don't feel the anger and need to lash out. Others... not so much.

[mich800]

That is a big fine. That must have the GM lawyers working overtime on their issues in light of this info.

[RobertRyan]

Perrysburg Dodgeboy wrote:
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

Seems more an issue with Toyota NA.These "issues" outside NA are few and far between. Toyota has been the model Corporate citizen.

ibrjet wrote:
Unintended acceleration was never proven. NASA examined the electronics and couldn't find anything wrong period. Our govt was in 100% control of GM during this period and went after Toyota with a vengeance. Toyota has gone above and beyond to address this fictitious issue and try to put it behind them

Seemed like some "unfair advantage" was being played out.The whole issue was blown out to the point of absurdity.

[lbrjet]

Unintended acceleration was never proven. NASA examined the electronics and couldn't find anything wrong period. Our govt was in 100% control of GM during this period and went after Toyota with a vengeance. Toyota has gone above and beyond to address this fictitious issue and try to put it behind them. My floor mat got stuck on my pedal on my F250 recently so I guess I should sue Ford. You Toyota haters have obviously never owned one. I have and it was the best car I ever had and now has been passed down to my daughter and grandson. Yes, it was one of those recalled cars. I never believed it and was proven right, even though that part of the story barely made a blip on our news media.

[Perrysburg_Dodg]

OK remove fes not sure why that is there. But I'm sure your smart guy and really knew what I was saying.

BTW I don't need to research links I didn't challenge someone's post you did. If you are going to do that you should provide an link to back up your statement.

Don

[Lyrikz]

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

Nah, you can find it yourself.

And i really have no idea what you asked for. Read what you posted.

[n7bsn]

A couple days ago, on the Echoboost thread that got deleted, someone asked why people were saying Toyota is just like the other auto-makers

Question answered

[Perrysburg_Dodg]

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

[Lyrikz]

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.

[Hannibal]

There's got to be a union somewhere we can blame! Think dang it! Think! :S

[Ron3rd]

Bad on Toyota.