Toyota Agrees to $1.2 Billion US Fine for Hiding Car Malfunctions

VOA News
19 March 2014 (11:44AM)

The world's biggest automaker, Japan's Toyota Motor Corporation, is admitting that it intentionally misled the public about deadly car safety problems several years ago and has agreed to pay a $1.2 billion fine to the United States to settle a criminal investigation.

U.S. Attorney General Eric Holder announced the resolution of the four-year case in Washington on Wednesday, calling the company's conduct "shameful."

Holder said Toyota was more worried about its corporate image than car safety.

"By the company's own admissions, it protected its brand ahead of its own customers. This constitutes a clear and reprehensible abuse of the public trust."

The investigation focused on the extent to which Toyota attempted to hide problems about unintended acceleration of some of its Toyota and Lexus models in 2009 and 2010. The malfunction led to deadly crashes as motorists were unable to control their vehicles when they suddenly raced to very high speeds.

Toyota recalled 10 million vehicles as the problem became known, but continued to blame drivers and misplaced floormats that trapped gas pedals for the unexpected acceleration. It previously paid more than $66 million to the U.S. transportation agency for delays in reporting the problem.

Hundreds of lawsuits have been filed against Toyota in connection with the acceleration problems and economic losses Toyota owners from the recalls. Toyota settled the economic loss cases for more than $1 billion and says it is in negotiations in nearly 400 other cases. Juries have mostly sided with the company in the death and injury cases.

Holder said the $1.2 billion fine is the largest ever levied by the U.S. against a car manufacturer.

The U.S. also filed a wire fraud charge against Toyota in the case, but deferred prosecution of the case for three years while it monitors Toyota's actions on safety issues.

Toyota says it has "made fundamental changes" to its operations to become "more responsive and consumer-focused."

Toyota's settlement of the case comes on the heels of two recent recalls by U.S.-based General Motors, the world's second biggest automaker, that totals more than 3 million vehicles.