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Toyota pays $1.2 billion after US investigation

Sticking point: A crash involving a Lexus ES350 helped to trigger a US investigation into Toyota-made vehicles.

‘Shameful’ conduct forces Toyota to pay record penalty over sticking throttles

20 Mar 2014

TOYOTA has struck a $US1.2 billion ($A1.3b) deal with the United States Attorney General’s office, concluding an investigation into claims that the Japanese car-maker misled the public over its communication of the “sticking” accelerator defect that prompted a massive recall in 2009-2010.

As a part of the deal – involving the largest criminal penalty paid by a car-maker in US history – Toyota will acknowledge wrongdoing, while the US government will effectively defer prosecution and dismiss the case.

Further conditions include allowing an independent monitor to review and assess Toyota’s policies and procedures relating to safety communications as well as its internal communication of safety issues and vehicle accident information.

The company acknowledged wrongdoing in the ruling, with Toyota Motor North America chief legal officer Christopher Reynolds saying Toyota accepted responsibility for the communications and decisions relating to the defects.

“At the time of these recalls, we took full responsibility for any concerns our actions may have caused customers, and we rededicated ourselves to earning their trust,” he said. “In the more than four years since these recalls, we have gone back to basics at Toyota to put our customers first.” Mr Reynolds said Toyota had made “fundamental changes” to its business to ensure it responds to issues and customer needs in a timely manner.

Toyota said it had taken “substantive actions”, including launching rapid response teams to investigate customers concerns quickly, coughing up $US50 million in funding to launch the Collaborative Safety Research Center in Ann Arbor, Michigan, with more than 16 universities partnering in the research.

US Attorney General Eric Holder said in a press conference that the payment would be the largest criminal penalty paid by a car-maker in US history.

He said the outcomes of the investigation were important as they would encourage changes in practice to the company and the wider auto industry.

“Our years-long criminal investigation examined the way the auto-maker disclosed complaints about problems of sudden acceleration associated with many of its most popular Toyota and Lexus models,” he said.

“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.

“And they concealed from federal regulators the extent of problems that some consumers encountered with sticking gas pedals and unsecured or incompatible floor mats that could cause these unintended acceleration episodes.

Mr Holder described Toyota’s behaviour as “shameful”, and slammed the company for protecting its business over protecting its customers.

“It showed a blatant disregard for systems and laws designed to look after the safety of consumers,” he said. “By the company’s own admission, it protected its brand ahead of its own customers. This constitutes a clear and reprehensible abuse of the public trust.” It has also extended the new vehicle development cycle by an extra four weeks to ensure safety and reliability and improved its quality control process.

The recall related to a fault with Toyota and Lexus branded models that had an accelerator that stuck causing injury and in some cases death.

In 2009, a highway patrolman and his family were killed after the accelerator of their Lexus ES350 stuck and they were unable to brake, causing them to crash.

The recall affected more than 10 million Toyota and Lexus vehicles globally and became one of the largest recalls by a car-maker in history.

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