[delta5]

In a largest of its kind in the auto industry, Toyota motors has settled with the US Department of Justice for a whopping US$ 1.2 billion. This is related to the cases of unintended acceleration, caused by floor mats and sticky acceleration pedal.

Under the settlement, supposedly Toyota has admitted that it misled consumers by making deceptive statements regarding the two issues that caused sudden acceleration.

The settlement resolves a four-year investigation by U.S. authorities, but the problems date back to at least 2007, when the National Highway Traffic Safety Administration opened an inquiry into the Lexus ES350 model after reports of unintended acceleration by the vehicle, which is made by Toyota.

The problems gained public attention in 2009, when a highway patrolman and his family were killed in a Lexus ES350 in San Diego.

A 911 emergency call made from the car recounts the family's last minutes: "We're in a Lexus ... and we're going north on 125 and our accelerator is stuck ... there's no brakes ... hold on and pray ..." The call ends with the sound of it crashing, prosecutors said.

The problem prompted Toyota to recall millions of vehicles, beginning in 2009.

But Toyota's statements about the recall misled the public because it didn't recall all the cars susceptible to the problems, caused by faulty floor mats, prosecutors said.

A Toyota engineer concluded that the top-selling Corolla was among the worst vehicles for potential floor-mat entrapment, but the model wasn't included in the recall.

The company also concealed from the public and regulators another type of unintended acceleration caused by pedals getting stuck, officials said.

The company had canceled a design change to address the issue in the wake of the San Diego accident, prosecutors said.

"Idiots! Someone will go to jail if lies are repeatedly told. I can't support this," one Toyota employee said after a meeting with regulators, according to a statement of facts filed with the settlement.

No individuals were charged as part of the settlement.

Last year, Toyota received approval on a settlement valued at $1.6 billion to resolve claims from Toyota owners that the value of their cars dropped after the problems came to light. It is also negotiating with hundreds of customers who say they have been injured.

News sources:
Reuters
Fox Business

[Traveller Nayak]

Originally Posted by delta5

In a largest of its kind in the auto industry, Toyota motors has settled with the US Department of Justice for a whopping US$ 1.2 billion. This is related to the cases of unintended acceleration, caused by floor mats and sticky acceleration pedal.

This is big money. Will sure have impact on Toyota. Pity that India will have to wait few years (some may even say many years) before such things are taken seriously by the regulators here in India.



--
Nayak // Sent from my iPad using Team-BHP

[deetjohn]

Its great to read about the strict laws in the US to protect the customers. We can only dream of things like this here. Where is that case on Chevrolet violating emission regulations with the Tavera?

Though USD 1.2 Billion is huge, Toyota is very cash rich and can easily deal with this. Looking at the details, I think Toyota got off better here.

Investigators discovered internal Toyota documents that acknowledged serious problems with its vehicles. They matched those documents with the company’s public statements, which played down the problems, according to one federal law enforcement official who spoke on condition of anonymity.

“That’s when we knew for sure that this was a criminal fraud case,” the official said. “That’s what you’d call a smoking gun.”

Source

In addition to the $1.2 billion fine, which will go into the government’s coffers, Toyota faces nearly 400 wrongful-death and personal-injury lawsuits. It has settled at least seven lawsuits in the past few months.

[carheadbanger]

Its not about money, Toyota have to pay for the settlement. Toyota might need to shell out more than $1.2 billion to fix the broken trust, as incidents like this are enough to make U.S customers go wary and to loose some extra billions due to poor sales figures.

[Traveller Nayak]

Originally Posted by carheadbanger

Its not about money, Toyota have to pay for the settlement. Toyota might need to shell out more than $1.2 billion to fix the broken trust, as incidents like this are enough to make U.S customers go wary and to loose some extra billions due to poor sales figures.

Well put. Its more than money. Broken trust and that too involving loss of family members and friends will take a long time for Toyota to make amends.

[IshaanIan]

As someone mentioned, us Indians can only dream of such consumer rights and protection. Nice to see Toyota having to shell out over a billion bucks for such an outrage no doubt they will loose the American customer's trust as well as investors and I think their stock prices ought to be on the fall already for this.

[Traveller Nayak]

Originally Posted by deetjohn

Its great to read about the strict laws in the US to protect the customers. We can only dream of things like this here. Where is that case on Chevrolet violating emission regulations with the Tavera?

Originally Posted by IshaanIan

As someone mentioned, us Indians can only dream of such consumer rights and protection.

While it is true that in India an action like this is not expected in near future, at the same time we should not lose sight of the fact that the US or other similarly developed economies have had these issues as they were maturing as an economy and these developed over a period of time.

The gap as I see is between our expectation of being able to behave /act as a developed economy but unconsciously not realizing that we have made progress only during the past 20-30 years. Whereas, the US or European countries never were tagged as ‘Third World’ or ‘Developing Economy’. We should take pride that we have made good progress over the past few decades, shed the third world tag and are now ‘one of the promising developing economy in the world’.

I am sure these issues will get their own space within the regulatory framework over the coming years. Tavera issue can also be seen as an example where at least action was initiated. Few years ago, no one would have paid any attention to emission. Have faith and everything will fall in place. Eventually.

[delta5]

In a bigger and longer duration cover up than that of Toyota, the GM ignition recall is going to blow up bigger right on its face. The US regulation states that when a manufacturer comes to the knowledge of vehicle safety defect, the NHTSA needs to be informed within 10days. Despite having very strong Consumer protection rules and well defined Recall procedures, these scams are happening in the Great US of A. No wonder the GM India ex-management thought they could get away with the Emission Magic in India, where sab-chalta-hai.

GM currently faces NHTSA, two congressional committees and the Justice Department investigating its actions in recalling the older-model vehicles for faulty ignition switches. The automaker, according to reports, knew as early as 2003 that the switches could unexpectedly shut down car engines and cause drivers to lose control. But the vehicles – ranging from 2003-2007 model-years – were not recalled until last month.

I have hard time understanding how people in big places of big companies, think they could hide a dead body under the living room carpet and can get away with it, Sooner or later the stink is gonna come out. You'd dont even have to be a Economic model expert to come up with a outcome which is less disastrous to the company, a back-of-the-napkin listing of pros and cons would suffice. I mean you find a fault that could crash your cars/kill people, come out with it in the open, face some bricks and bats, fix the issue, repair some reputation dents and move on. To quote a great genius, "How hard can it be?" Or am I being plain naive and missing a huge point here?

When strong regulations protecting consumers rights is not deterrent for such Auto Giants, can you imagine how Indian auto makers' Internal safety audit reports would be considered? I cant imagine how many of such hidden fault reports are playing out on the Indian roads, adding to the most dangerous in the world title.

P.S.: How come this news is not listed in our Team-BHP news column, is this considered irrelevant to Indian market? If I am not mistaken some of Toyota Prius and Lexus were affected in Indian market as well.

D.

[CrAzY dRiVeR]

Update: Customers receive cheques for a paltry sum of $21 each!

http://m.wsj.com/articles/BL-LB-49904