Toyota to Pay $1.2 Billion in Settlement with Justice Department
Largest Fine Paid by Car Company in U.S. History
General Motors’ unusually proactive and candid approach to its latest recalls appears to be a textbook case of deliberately and meticulously avoiding the missteps made by Toyota, which today was officially fined by the Justice Department in the order of $1.2 billion, the largest judgment against an automaker in U.S. history. Attorney General Eric Holder did not mince words in his statement about the case and settlement, saying Toyota "intentionally concealed information and misled the public about the safety issues behind these recalls." He went on to say Toyota's conduct was "shameful" and showed a "blatant disregard for systems and laws."
In response to its scathing rebuke by the Justice Department, Toyota is launching rapid-response teams to investigate customer complaints more quickly, committing $50 million to launch the Toyota Collaborative Safety Research Center in Ann Arbor, Michigan, to partner with multiple universities and institutions on vehicle safety research to be shared with the automotive industry, and enhancing regional autonomy and improving internal quality processes.
Under the terms of the agreement with the DOJ, the department will defer prosecution and dismiss the case provided that Toyota meets the terms of its monetary settlement, and continues to cooperate with regulators and an independent monitor to review policies and procedures related to Toyota's safety communications process. Based on the release Toyota issued in response to the DOJ ruling, it will make a lump-sum payment that will be reflected in a $1.2 billion charge against its earnings for the fiscal year ending March 31, 2014.
Among the models involved in the floormat and accelerator pedal recalls were the 2008-2010 Highlander, 2005-2010 Tacoma, 2007-2010 Tundra, and 2009-2010 RAV4 and Venza models.
Source: U.S. Department of Justice, Toyota Motor Sales, U.S.A.