Toyota appears to be reaching a settlement with the National Highway Traffic Safety Administration regarding the unintended acceleration issues that have plagued the maker.
Toyota may soon write a check for more than $1 billion to settle a government investigation related to its sudden acceleration problems, avoiding the possibility of criminal prosecution.
Several media outlets, including the Wall Street Journal and the Detroit News, are citing “unnamed sources familiar with the negotiations” to describe what appears to be a deal that would end a four-year investigation by the U.S. Department of Justice. The government had been looking into the possibility that Toyota had intentionally misled federal regulators about possible defects involving its vehicles.
Starting in late 2009, Toyota ordered a series of recalls covering more than 14 million vehicles worldwide for various problems that could potentially cause them to surge out of control. Up to that point, more than 3,000 complaints had been received by both the maker and federal regulators, the National Highway Traffic Safety Administration (NHTSA) linking the problems to at least five deaths.
Among the internal company documents released during government hearings in early 2010, one celebrated the fact that Toyota saved millions of dollars by convincing the NHTSA to drop plans for an earlier recall.
But the issue ultimately became a costly one for the world’s largest automaker.
The federal safety agency eventually fined Toyota about $70 million for failing to respond to potential safety issues in a timely manner, as required by law.
Meanwhile, Toyota has paid $29 million to settle charges by 29 state attorneys general that it knew about, but failed to act on, safety-related problems. That settlement also prevents Toyota from advertising the safety of its vehicles without having engineering data to back up its claims.
The maker reached a $1 billion civil settlement, the largest ever for the auto industry, to cover claims related to the sudden acceleration issue in December 2012. And it has settled a number of other individual legal claims since then – though it has also fought a number of lawsuits involving owners who claimed to have been injured in crashes related to sudden acceleration problems, winning a number of them.
Several investigations initiated by NHTSA, including one conducted by NASA, found no clear evidence of the mysterious electronic gremlins some owners alleged could cause Toyota vehicles to surge out of control.
(Toyota teams up with Daytona International Speedway. For more, Click Here.)
The Toyota recalls to date have focused on sticky accelerator pedals and so-called “carpet entrapment,” where loose floor mats could become tangled with accelerator pedals making it difficult to slow a vehicle down. The first recall, in October 2009, was triggered by a case in which an off-duty California Highway Patrol officer and several family members were killed when a Lexus he was driving raced out of control due to carpet entrapment.
Along with the recalls, Toyota has assigned key executives to new posts monitoring safety-related issues, but it has continued to face problems. While final data for 2013 hasn’t been compiled, the Japanese maker had more vehicles covered by recalls in the U.S. market during four of the previous five years than any other manufacturer.
(Click Here for the disagreement between Toyota and Ford execs over trade, currency issues.)
Just last month, Toyota ordered dealers to temporarily stop selling a wide range of products because of a defect related to their seat heaters. During an interview last week, Toyota’s second-ranking U.S. executive, Bob Carter, described the problem as “inconsequential,” though he also acknowledged that NHTSA may yet order the recall of vehicles already in the hands of consumers.
A settlement in the sudden acceleration case could be announced over the next few weeks, according to sources, though they caution a deal is not finalized yet. Along with the fine, Toyota would likely accept a deferred prosecution agreement putting it on probation for a number of years.
(To see what kind of year Toyota’s Bob Carter expects in 2014, Click Here.)
“Toyota continues to cooperate with the U.S. Attorney’s Office in this matter,” company spokesman Ed Lewis said in a statement. “In the nearly four years since this inquiry began, we’ve made fundamental changes to become a more responsive, customer-focused organization, and we’re committed to continued improvements.”
I have no problem with fines for not disclosing safety defects to NHTSA in a timely manner but to fine any car maker a BILLION dollars when no one has EVER proven that unintended acceleration ever existed, is outrageous. Instead of holding the proper entity responsible for their actions – that would be the DRIVER, instead the Feds are punishing the car maker for the incompetence of the driver.
This action is a DISGRACE and it sets a terrible precedence of injustice by NHTSA and the U.S. AG. This is as ignorant as the jackpot justice in the U.S. judicial system where people become millionaires for dumping hot coffee on their crotch so a siren chaser can sue. It’s complete abuse of the judicial system and rewards those who act irresponsibly endangering themselves and others.
Jorge,
You’re missing the story. First, Toyota acknowledged it DID have TWO real issues with sudden acceleration: carpet entrapment and sticky accelerator pedals. These are very different from the mysterious electronic gremlins many drivers claimed but which were never proven — in many cases, evidence showing crashes were, indeed, the result of driver error. The carpet issue was involved in a number of crashes, including the CHiP officer and his family killed in a Lexus crash. Meanwhile, there was a thick folder of evidence indicating Toyota knew it had a potential problem that it failed to respond to in a proper, prescribed manner. You’ll recall the notorious memo in which the maker boasted it saved millions by convincing NHTSA not to order a recall. That appears to have been just one of many damning internal documents.
We see with the sudden acceleration issue that Toyota will settle where it thinks it has a problem and fight where it can win. It clearly knows that not only did it not obey the letter of the recall laws but that it knowingly skirted the laws in a manner that could rightly be construed criminal behavior.
This is, if anything, a major, positive action by the DoJ to ensure that manufacturers don’t cut corners and look for ways to ignore safety laws. It sends the appropriate warning to the industry and should be hailed, not booed.
Paul A. Eisenstein
Publisher, TheDetroitBureau.com
No Paul Toyota did NOT admit it had sudden acceleration or “unintended acceleration” because it never did. It admited it had some sticky accelerator pedals.
Yes it also had issues with some drivers pushing the floor mat under the accelerator. That is a DRIVER issue NOT sudden acceleration where the vehicle takes off on it’s own. The sticking accelerator is a mechanical issue and it too is NOT sudden acceleration. It is a mechanical defect and Toyota has corrected the issue. Ford and Chrysler who also purchase accelerators from the same vendor also had issues and they corrected them but they were not fined a BILLION dollars. Long before computer controls and drive-by-wire we had sticking accelerators with carbs and throttle cables but no BILLION dollar fines…
No one should be issued a driver’s license if they don’t know how to apply the brakes and stop the vehicle after they push the floor mat under the accelerator peddle. This is a DRIVER issue and trying to make it a auto maker issue is typical of the siren chasers because they profit from these bogus lawsuits – just like the lawsuits for people pouring hot coffee on their crotch. Personal responsibility in the U.S. went out the window with that bogus lawsuit and the siren chasers have been cashing in ever since.
It’s a disgrace and abuse of the judicial system for jackpot justice.
As I said I am all for fining auto makers who do not report safety defects promptly. That however is NOT what this DOJ action is about. It’s about punishing an auto maker for incompetent drivers.
You keep using the totally incorrect term: “sudden acceleration” when not once was this the case. These incidents were driver induced acceleration by them either pushing the floor mat under the accelerator pedal or from them pushing on the accelerator pedal and it not returning all the way to idle. There has NEVER been a documented case of “unintended acceleration”. Using the term sudden acceleration in this story implies that there was unintended acceleration which is precisely what the siren chasers want the general public to believe when it never existed. This is a very important point because most people don’t understand the difference between driver induced problems and a ghost taken control of the car and it racing down the roadway out of control – which is the foolish belief of many clueless people.
Toyota settled because that’s the best they can do at this point. Of course they saved money by stopping an initial NHTSA investigation. They paid many times over however in this punitive decision. The DOJ action sends a VERY bad message that auto makers should be punished for incompetent drivers who should not be operating a motorized vehicle. If an operator doesn’t know how to apply the brakes, shut-off the ignition or shift the trans into neutral – they most definitely should NOT be operating any motorized vehicle.
Thanks to the siren chasers the U.S. judicial system has gone off the tracks so that the unscrupulous can financially profit.
Jorge,
The DoJ investigation has focused on the fact that Toyota knew it had several safety-related issues that it was required by law to take action on and, it appears, knowingly avoided acting upon. Let’s drop the reference to sudden acceleration or unintended acceleration. It could have been something as potentially “inconsequential” (to use EVP Bob Carter’s word) as the wrong material in heated seats. The point is that Toyota simply sidestepped the law to save money. FYI, the carpet issue is not as simple as you make it. We can discuss that another time.
This sends a very GOOD message that the law is the law and makers must provide information to NHTSA and then they can discuss/debate what, if any action is needed. In fact, the latest stop-sale is a very good example of what COULD have happened. It is not clear if NHTSA will require a recall. However, Toyota reported something that could be very minor and by doing so they are both in compliance and gaining the benefit of the doubt with both consumers and NHTSA.
Oh, and FYI, be careful when you cite examples of our supposedly litigious society run amok. (FYI, to some degree I agree, but…)
In the case of the woman who sued McDonald’s, first of all, as in almost all cases of large jury verdicts the numbers were drastically reduced upon appeal.
But here’s the full back story, and it is very different from the anecdotal one. It turns out that the reason the woman received THIRD DEGREE burns was that McDonald’s used to use a high-pressure coffee making system that saved a significant amount of time in the brewing process (though it also resulted in the coffee being lousy tasting). The temperature it came out at was significantly hotter than any of its competitors. That might not seem a big issue…except that the company had received 1000s of complaints about the temperature of its coffee, not just from consumers but from franchise owners who wanted McD’s to switch to alternative brewing systems. The restaurant owners had been reporting for years that customers were being scalded, some quite badly. Worse, in the discovery process, the old woman’s lawyers found reams of internal documents that said, in a nutshell, “yeah, we know we’re producing a product that is regularly injuring our customers…but the trade-off is worth it because we can produce coffee faster with less equipment.” The jury later explained that the large verdict was a respond to that…in effect, we are now making it more expensive for you to willingly hurt the public. As noted, the verdict was reduced, but an embarrassed McDonald’s finally changed its brewing process and has 1) fewer injuries and 2) ironically, it now has markedly better coffee allowing it to challenge Starbucks!
Paul E.