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Toyota, Feds Settle Unintended Acceleration Case for $1.2B

March 19, 2014

Photo courtesy of Toyota.
Photo courtesy of Toyota.

As part of a legal settlement with the U.S. Department of Justice, Toyota has agreed to pay a $1.2 billion penalty and acknowledge that in 2009 and 2010 the company misled the public and federal regulators about vehicles susceptible to "sticky pedal" — a problem in which accelerators get stuck in partially depressed levels — and floor mat entrapment.

In turn, the Department of Justice agreed to defer prosecution and dismiss its case against the automaker, as long as Toyota complies with terms of the agreement that include submitting to an independent monitor who will review the company's policies and procedures for safety communications, internal sharing of vehicle accident information, and preparation and sharing of certain technical reports.

"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 2009 and 2010, Toyota recalled millions of Toyota and Lexus vehicles to address claims of unintended acceleration. The federal probe focused on the company’s communications and decisions associated with those recalls.

"Under the terms of the criminal information filed today, Toyota will also be charged with wire fraud," Holder said in a press conference Wednesday morning. "The department will defer prosecution of Toyota for three years — provided that Toyota complies with the agreement in every respect and continues to fully cooperate with federal authorities." 

The $1.2 billion penalty represents the largest fine imposed on an automaker.

"This is appropriate given the extent of the deception carried out by Toyota in this case," Holder said of the fine. "Put simply, Toyota's conduct was shameful. It showed a blatant disregard for systems and laws designed to look after the safety of consumers."

In a statement released by Toyota, Christopher P. Reynolds, chief legal officer for Toyota Motor North America, said the recalls and resultant investigation have led to fundamental changes within the company.

"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," Reynolds said. "Specifically, we have taken a number of steps that have enabled us to enhance quality control, respond more quickly to customer concerns, strengthen regional autonomy and speed decision-making."

Toyota cited the following measures the company has taken since the recalls:

  • Launching rapid-response teams to investigate customer concerns quickly.
  • Committing $50 million in 2011 to launch Toyota's Collaborative Safety Research Center in Ann Arbor, Mich., to partner with more than 16 universities and institutions across North America on safety advances that will be shared to benefit the auto industry and society.
  • Expanding its network of field quality offices to improve customer responsiveness.
  • Enhancing regional autonomy, including naming the first American CEO of Toyota’s North American Region as well as chief quality officers for North America and other principal regions — all of whom have direct lines to President Akio Toyoda.
  • Improving its quality control process.
  • Extending the new vehicle development cycle by four weeks to help ensure reliability and safety.

With the settlement, Toyota hopes to take "a major step toward putting this unfortunate chapter behind us," Reynolds said.

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