Toyota’s $1.2 billion Payout Due to People with Two Left Feet?
Today, just as things are heating up for General Motors following their decade-long recall scandal, Toyota has reached a settlement with the U.S. Department of Justice over an unintended acceleration issue to the tune of $1.2 billion. You know, just petty cash.
Toyota’s $1.2 billion payout means that the automaker has successfully evaded prosecution. Already, however, Toyota has spent $1.6 billion+ to car owners, another $16.375 million in federal fines in 2010, and still another $17.35 million in fines in 2012, according to USA Today.
The settlement was reached after Toyota was investigated for claims it made about its unintended acceleration issue.
According to U.S. Attorney General Eric Holder, “Today we can say for certain that Toyota intentionally concealed information and misled the public about the safety issues behind these recalls. Put simply, Toyota’s conduct was shameful.”
Pretty strong words, but I don’t completely buy into them. Toyota had claimed that the issue came from sticky accelerator pedals, as well as faulty floor mats, while critics argued that the issue was electronic. However, the resultant federal investigation disproved these claims. In reality, it looks like most of the instances of unintended acceleration were caused by “pedal misapplication.” In other words, the drivers mistook the accelerator for the brake. And for that mistake, Toyota now owes the government $1.2 billion.
Of course, it’s not really that simplistic, but something sure smells fishy to me, and it’s not just because McDonalds is currently ramming its Filet-O-Fish down my throat every morning on Pandora.
Christopher P. Reynolds, the chief legal officer of Toyota Motor North America, spoke in an official statement from the company:
“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. In the more than four years since these recalls, we have gone back to basics at Toyota to put our customers first.”
Toyota’s $1.2 billion payout will be recorded in after-tax charges against earnings this fiscal year, ending March 31, 2014.
Timothy Moore takes his leadership inspiration from Michael Scott, his writing inspiration from Mark Twain, and his dancing inspiration from every drunk white guy at a wedding. When Tim is not writing about cars, he’s working on his novel or reading someone else’s, geeking out over strategy board games, hiking with his pooch, or channeling his inner Linda Belcher over beers with his friends. See more articles by Timothy.