Toyota slapped with $1.2-billion fine in US for hiding safety issues

Carmaker calls it 'agreement' with government
Mar 21, 2014
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Toyota Motor Corporation

Top Japanese automotive company Toyota Motor Corporation has been ordered to pay $1.2-billion in the United States related to an investigation initiated in February 2010, in which the carmaker was made to "address potential sticking accelerator pedals and floor mat entrapment." Yes, that industry-shaking case that stemmed from allegations of "sudden unintended acceleration."

And depending on who's delivering the announcement, it is either a mutual agreement or a criminal penalty.

If you ask Toyota (as stated in its press statement):

"Toyota has reached an agreement with the US Attorney's Office to resolve its investigation initiated in February 2010 into the communications and decision-making processes related to the company's 2009-2010 recalls. Under the agreement, the government agrees to defer prosecution and then dismiss its case, as long as Toyota makes the required monetary payment, abides by the terms of the agreement and continues to cooperate with the government.  The agreement also provides for an independent monitor to review policies and procedures relating to Toyota's safety communications process, its process for internally sharing vehicle accident information, and its process for preparing and sharing certain technical reports."

If you ask US attorney general Eric H. Holder Jr. (as quoted by The New York Times):

"Other car companies should not repeat Toyota’s mistake. A recall may damage a company's reputation, but deceiving your customers makes that damage far more lasting."

Toyota says it "took full responsibility for any concerns our actions may have caused customers, and we rededicated ourselves to earning their trust." The US attorney general, on the other hand, calls Toyota's action of "hiding safety defects from the public" at the height of the issue "shameful and a blatant disregard for the law."

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"Entering this agreement, while difficult, is a major step toward putting this unfortunate chapter behind us," declared Toyota Motor North America chief legal officer Christopher Reynolds. "We remain extremely grateful to our customers who have continued to stand by Toyota. Moving forward, they can be confident that we continue to take our responsibilities to them seriously."

According to Toyota's press statement, the following are among the "substantive actions" the company has "voluntarily taken" since the recalls:

* Launching rapid-response teams to investigate customer concerns quickly;

* Committing $50 million in 2011 to launch Toyota’s Collaborative Safety Research Center in Ann Arbor, Michigan, to partner with more than 16 universities and institutions across North America on safety advances that will be shared to benefit the entire auto industry and society;

* Expanding its network of field quality offices to improve customer responsiveness;

* Enhancing regional autonomy, including naming the first American CEO of Toyota's North American Region as well as Chief Quality Officers for North America and other principal regions--all of whom have direct lines to Toyota Motor Corporation president Akio Toyoda;

* Improving its quality control process; and

* Extending the new vehicle development cycle by four weeks to help ensure reliability and safety.

With this development, how do you now feel toward Toyota Motor Corporation as a manufacturer of motor vehicles? Take our poll.

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