Toyota to pay $1.2 billion penalty over safety issues
Toyota Motor Corp will pay a record $1.2 billion to resolve a criminal probe in to safety issues, in a deal that could serve as a template for how U.S. authorities approach a similar investigation into General Motors.
The settlement between the Justice Department and Toyota includes an admission by the auto manufacturer that it misled American consumers about two different problems that caused cars to accelerate even as drivers tried to slow them down.
The agreement comes as General Motors is also under investigation over its handling of an ignition switch failure linked to a dozen deaths. GM recalled more than 1.6 million vehicles more than a decade after first noticing the issue. Top officials said the Toyota settlement could serve as a template for similar cases.
“My hope and expectation is that this resolution will serve a model for how to approach future cases involving similarly situated companies,” Attorney General Eric Holder told a news conference on Wednesday, though he declined to discuss GM specifically.
The Toyota deal, which had been expected, resolves issues that have dogged the company since at least 2007 and have been linked to at least 5 deaths. The auto maker still faces hundreds of private lawsuits over the problems.
Prosecutors filed criminal charges against the company but agreed to defer and drop them if the company allows an independent monitor to review its safety practices and if it abides by the terms of the deal.
Toyota is “effectively on probation for three years,” U.S. Attorney Preet Bharara, whose office conducted the investigation, said at the news conference.
“It cared more about savings than safety and more about its own brand and bottom line than the truth,” Bharara said.
Toyota said it would take a $1.2 billion after-tax charge for the settlement in the fiscal year ending March 31.
“Entering this agreement, while difficult, is a major step toward putting this unfortunate chapter behind us,” Toyota’s North American legal chief Christopher Reynolds said in a statement.
