In a controversial plea agreement announced today, the U.S. Department of Justice said that Toyota Motor Corporation now admits to lying to consumers and U.S. safety regulators about unintended acceleration in its cars during the fall of 2009 and early 2010 by issuing “misleading statements” about safety issues in Toyota and Lexus vehicles.
Toyota admits that it made concealing and deceptive statements about two safety issues affecting its vehicles, each of which caused unintended acceleration. At least 89 deaths and hundreds of lawsuits were the result of Toyota’s inaction.
Under the plea bargain, the Government agrees to defer prosecution and then dismiss its case, if Toyota makes the required payoff, abides by the terms of the agreement and continues to cooperate with the Government.
The charge is that Japan’s largest automaker defrauded consumers. No Japanese executives who promulgated what was then the largest safety defect cover-up in U.S. history were named or charged. No U.S. Toyota executives were charged either.
This appears to be ‘cash register justice’ at its worst. Toyota is buying its way out of its blatantly illegal behavior where people died, and former Toyota employees working at NHTSA, the U.S. safety regulator, stalled an investigation and needed recalls for years.
The deal also has negative implications for General Motors shareholders in its ongoing defective ignition switch and failed air bag scandal. (Where’s the Independent Investigation of NHTSA for Failure to act on Deadly GM Switches? GM Recalls More Vehicles, Some for Airbag Failures CAS Says GM Ignition Switch Airbag Failure Caused 303 Deaths Political Grandstanding begins over GM Ignition Switch Fatalities)
“My hope and expectation is that this resolution will serve as a model for how to approach future cases involving similarly situated companies,” U.S. Attorney General Eric Holder told a news conference in Washington D.C. on Wednesday. Holder, who is always quick to use TV cameras to advance the political aims and messages of the Obama Administration, declined to discuss the GM matter, though. For the record, and before Holder appeared at the press conference, the investigation was actually led by the U.S. Attorney’s office in Manhattan, the same office now probing GM’s conduct.
The Toyota deal, which is subject to almost certain court approval, I think, requires Toyota to pay a $1.2 billion financial penalty, which is the largest penalty of its kind ever imposed on an auto company. It also requires an independent monitor to review and assess policies, practices and procedures relating to Toyota’s safety-related public statements and reporting obligations.
Toyota agreed to pay the penalty under a Final Order of Forfeiture in a parallel civil action also filed today in the Southern District of New York. Toyota will record $1.2 billion in after-tax charges against earnings in the fiscal year ending March 31, 2014 for costs.
See AutoInformed on:
- Toyota Adds 150,000 Lexus Models to Deadly Floor Mat Recall. NHTSA Says Filing Lacks Required Info. Another Cover-up?
- Toyota Recall Study Finds Adversarial Relationship with NHTSA
- Toyota Wins Unintended Acceleration Case
- Toyota to Pay Record $17.35 Million for Lexus Safety Cover-Up
- Toyota Settles Lawsuits for $1.1 Billion and Will Modify Millions of Vehicles with Electronically Controlled Gas Pedals to Stop Runaways
