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May 30, 2017

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Toyota to pay US$1.2 billion over attempt to cover up deadly defect

WASHINGTON--Toyota Motor Corp. will pay US$1.2 billion to settle U.S. criminal charges that it lied to safety regulators and the public as it tried to cover-up deadly accelerator defects.

The Japanese auto giant eventually recalled 12 million vehicles worldwide in 2009 and 2010 at a cost of US$2.4 billion as the scandal over sudden, unintended acceleration spread and tarnished its once-stellar reputation.

Dozens of deaths were blamed on the defects that caused vehicles to speed out of control and fail to respond to the brake.

"Toyota's conduct is shameful," Attorney General Eric Holder said in announcing the settlement Wednesday.

"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," Holder said.

"In other words, Toyota confronted a public safety emergency as if it were a simple public relations problem."

In reaching the settlement, Toyota admitted that it lied when it insisted in 2009 that it had addressed the "root cause" of the problem by fixing floor mats that could trap the accelerator.

As part of the cover-up, Toyota scrapped plans to fix the "sticky pedal" defect in the United States and instructed employees and its parts supplier not to put anything about the design changes in writing.

Lying to Public, Regulators

Toyota eventually revealed the sticky pedal problems and recalled millions of affected vehicles.

But it continued to try to cover its tracks by lying to the public, safety regulators and even a U.S. congressional hearing about when the problem was discovered, the settlement agreement said.

Perhaps most disturbing for the families of those who died is the fact that Toyota knew about the floor mat problems as early as 2007 but did not think it was serious enough to fix until affected models received a "full redesign" — something that happens only every three to five years.

Internal documents showed that Toyota employees celebrated saving more than US$100 million in "unnecessary costs" by convincing safety regulators investigating defect reports in 2007 that only the mats had to be fixed. It hid from regulators evidence that the pedals were also problematic because they sank too close to the floor.

Toyota said it has made "fundamental changes" to improve its handling of safety issues and consumer complaints and is "committed to continued improvement in everything we do to keep building trust in our company, our people and our products."

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