{"id":1717,"date":"2014-03-19T16:10:08","date_gmt":"2014-03-19T23:10:08","guid":{"rendered":"https:\/\/cjnotebook.com\/?p=1717"},"modified":"2014-03-19T23:00:39","modified_gmt":"2014-03-20T06:00:39","slug":"toyota-pay-record-1-2-billion-fine-misleading-consumers-vehicle-defects","status":"publish","type":"post","link":"https:\/\/cjnotebook.com\/?p=1717","title":{"rendered":"Toyota to Pay Record $1.2 Billion Fine for Misleading Consumers About Serious Vehicle Defects"},"content":{"rendered":"

\u201d[box type=”info” font=”georgia” fontsize=”20″]”…companies that make inherently dangerous products must be maximally transparent, not two-faced. That is why we have undertaken this landmark enforcement action. And the entire auto industry should take notice.\u201d – U.S. Attorney Preet Bharara [\/box]<\/p><\/blockquote>\n

NEW YORK<\/strong> –Toyota Motor Corp. admitted to misleading consumers and U.S. regulators about two safety issues affecting its cars \u00a0– a sticky pedal and floor mats – that caused the vehicles to unintentionally accelerate, the U.S. Justice Department said.<\/p>\n

Toyota will pay a $1.2 billion fine, which is the largest penalty of its kind ever imposed on an automotive company, \u00a0officials said.<\/p>\n

In one accident, a car with a \u00a0family of four inside were killed because the driver wasn’t able to stop the accelerating vehicle, the U.S. Justice Department said today.<\/p>\n

The Justice Department agreed to postpone the prosecution of Toyota.<\/p>\n

The federal government charged \u00a0Toyota with defrauding consumers in the fall of 2009 and early 2010 by issuing misleading statements about safety issues in Toyota and Lexus vehicles, federal officials said.<\/p>\n

Toyota will be required to have an independent monitor review its safety policies and practices, federal officials said.<\/p>\n

\u201cRather 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,\u201d said Attorney General Eric Holder. \u201cWhen car owners get behind the wheel, they have a right to expect that their vehicle is safe…\u00a0Other car companies should not repeat Toyota\u2019s mistake: a recall may damage a company\u2019s reputation, but deceiving your customers makes that damage far more lasting.”<\/p>\n

\u201cToyota stands charged with a criminal offense because it cared more about savings than safety and more about its own brand and bottom line than the truth,\u201d said U.S. Attorney Preet Bharara for the Southern District of New York. \u201cIn its zeal to stanch bad publicity in 2009 and 2010, Toyota misled regulators, misled customers, and even misstated the facts to Congress.’<\/span><\/p>\n

Bharara said the tens of millions of drivers have a right to expect a car to be truthful about serious safety issues and are not “slow-walking safety issues” and “not playing games with their lives.”<\/p>\n

Adding,\u00a0“companies that make inherently dangerous products must be maximally transparent, not two-faced. That is why we have undertaken this landmark enforcement action. And the entire auto industry should take notice.\u201d<\/p>\n

A Defective Car Caused an Accident That Killed a Family<\/strong><\/p>\n

Following an Aug. 28, 2009 car accident in San Diego, Toyota issued misleading statements and took steps to conceal the safety problem during a time of intense public concern and scrutiny over the safety of Toyota’s vehicles, said federal officials.<\/span><\/p>\n

The accident killed a family of four after a Lexus dealer improperly installed an incompatible all-weather floor mat into the Lexus ES350. The mat entrapped the accelerator and put it at full throttle, officials said.<\/p>\n

\u00a0A 911 emergency call made from the out-of-control vehicle, which was speeding at over 100 miles per hour, reported, \u201cWe\u2019re in a Lexus . . . and we\u2019re going north on 125 and our accelerator is stuck . . . there\u2019s no brakes . . . we\u2019re approaching the intersection . . . Hold on . . . hold on and pray . . . pray,\u201d according to officials.<\/span><\/p>\n

The call ended with the sound of the crash that killed everyone in the vehicle.<\/span><\/p>\n

The San Diego accident was not the first time that Toyota had faced a problem with floor-mat entrapment.<\/span><\/p>\n

Toyota Aware of the Problems with Toyota and Lexus Models in 2007<\/strong><\/p>\n

In 2007 before the San Diego accident and following a series of reports alleging unintended acceleration in Toyota and Lexus vehicles, \u00a0the\u00a0National Highway Traffic Safety Administration\u00a0\u00a0opened a defect investigation into the Lexus ES350 model and several other Toyota vehicles that might also be defective.<\/span><\/p>\n

But authorities allege Toyota said that it didn’t need to recall any of its vehicles, conducting its own internal investigation in 2007, which showed that there were safety issues including the entrapment of the gas pedal by an all-weather floor mat. But Toyota didn’t share the results of its investigation with the Traffic Safety Administration, officials said.<\/span><\/p>\n

Toyota ended up recalling \u00a055,000 mats but no vehicles, a move that was touted internally by Toyota employees as a major victory:<\/p>\n

\u00a0\u201c…had the agency . . . pushed for recall of the throttle pedal assembly (for instance), we would be looking at upwards of $100 million + in unnecessary costs,\u201d Toyota had stated.<\/span>\u00a0<\/span><\/p>\n

Shortly after Toyota announced its 2007 mat recall, company engineers revised internal design guidelines to provide for, among other things, a minimum clearance of 10 millimeters between a fully depressed gas pedal and the floor.<\/p>\n

But Toyota decided those revised guidelines would only apply to certain \u00a0car models.<\/p>\n

As a result, even after the revised guidelines had been adopted internally, many new vehicles produced and sold by Toyota \u2013 including the Lexus ES350 involved in the 2009 San Diego accident \u2013 did not comply with \u00a0Toyota’s 2007 guidelines.<\/p>\n

After the fatal \u00a0San Diego accident, Toyota agreed to recall eight of its models, including the ES350, for floor-mat entrapment susceptibility.<\/p>\n

Thereafter, as part of an effort to defend its brand image, Toyota began issuing public statements assuring customers that this limited recall had \u201caddressed the root cause of unintended acceleration\u201d in its U.S.-sold vehicles.<\/p>\n

As Toyota knew from internal testing it had completed by the time these statements were made, the eight-model recall had not in fact \u201caddressed the root cause\u201d of even the floor-mat entrapment problem.<\/p>\n

Models not recalled \u2013 and therefore still on the road \u2013 bore design features rendering them just as susceptible to floor-mat entrapment as those within the recall population, according to federal officials.<\/p>\n

One engineer working at a Toyota facility in California had concluded that the Corolla, a top-selling car that had not been recalled, was among the three \u201cworse\u201d vehicles for floor-mat entrapment.<\/p>\n

In October 2009, federal officials said Toyota \u00a0engineers in Japan circulated a chart showing that the Corolla had the lowest rating for floor-mat entrapment under their analysis. None of these findings or this data were shared with Traffic Safety Administration at the time.<\/p>\n

Toyota’s Sticky Pedal Problem and Misleading the Public and Congress<\/strong><\/p>\n

Federal officials say what is more misleading was at the time Toyota said that the “root cause” of the unintended acceleration had been fixed by the 2009 eight-model-floor mat recall, Toyota hid another serious problem from the Traffic Safety Administration – a sticky pedal<\/p>\n

The defective sticky pedal was manufactured by A-Pedal Company and installed in many Toyota vehicles in North America and Europe, including Camry, the Matrix, the Corolla, and the Avalon.<\/p>\n

The sticky pedal problem surfaced in Europe in 2008.<\/span><\/p>\n

European reports reflected instances of \u201cuncontrolled acceleration\u201d and unintended acceleration to \u201cmaximum RPM,\u201d and customers were concerned that the condition was \u201cextremely dangerous.\u201d<\/span><\/p>\n

In early 2009, Toyota told its European dealers information about the sticky pedal problem, instructing them how to address the problem. This was to identify the issue as “sudden RPM increase\/vehicle acceleration due to acceleration pedal sticking,” \u00a0federal officials said.<\/p>\n

Toyota \u00a0instructed the dealers to replace it and not use the pedals manufactured by A-Pedal<\/p>\n

Internal Toyota documents describe the sticky pedal problem as a \u201cdefect\u201d that was \u201c[i]mportant in terms of safety because of the possibility of accidents,\u201d according to federal officials.<\/p>\n

But Toyota didn’t inform federal agencies of the sticky pedal problem or conduct a recall, say officials.<\/p>\n

\u00a0Instead, beginning in the spring of 2009, officials said Toyota quietly directed A-Pedal Company to change the pedals in new productions of affected models in Europe, and to plan for the same design changes to be rolled out in the United States – where the same problematic pedals were being used — beginning in the fall of 2009. <\/span><\/p>\n

The design change was to substitute the plastic used in the affected pedal models with another material and to change the length of the friction lever in the pedal, say federal officials.<\/span><\/p>\n

After the August 2009 fatal floor-mat entrapment accident in San Diego, several articles critical of Toyota appeared in U.S. newspapers, including accusing Toyota of hiding \u00a0defects related to unintended acceleration, said officials,.<\/p>\n

On Nov. 25, 2009, Toyota, through a U.S. subsidiary, announced its floor- mat entrapment resolution with the Traffic Safety Administration.<\/span><\/p>\n

In a press release, Toyota assured its customers:\u00a0\u00a0\u00a0\u201cThe safety of our owners and the public is our utmost concern and Toyota has and will continue to thoroughly investigate and take appropriate measures to address any defect trends that are identified.\u201d A spokesperson for the subsidiary stated during a press conference the same day, \u201cWe\u2019re very, very confident that we have addressed this issue.\u201d<\/span><\/p>\n

In truth, federal officials said the issue of unintended acceleration had not been \u201caddressed\u201d by the remedies announced.<\/p>\n

Officials said A-Pedal Company pedals which could experience stickiness were still on the road and still, in fact, being installed in newly-produced vehicles.<\/p>\n

And the best-selling Corolla, the Highlander, and the Venza \u2013 which had design features similar to models that had been included in the earlier floor-mat entrapment recall \u2013 were not being \u201caddressed\u201d at all.<\/p>\n

Again, on Dec. 23, 2009, Toyota, feeling the pressure issued more misleading statement:\u00a0\u00a0\u201cToyota has absolutely not minimized public awareness of any defect or issue with respect to its vehicles. Any suggestion to the contrary is wrong and borders on irresponsibility. We are confident that the measures we are taking address the root cause and will reduce the risk of pedal entrapment.\u201d<\/p>\n

In fact, \u00a0federal officials said Toyota had \u201cminimized public awareness of\u201d both sticky pedal and floor-mat entrapment.<\/p>\n

Further, the measures Toyota had taken did not \u201caddress the root cause\u201d of unintended acceleration, because Toyota had not yet issued a sticky pedal recall and had not yet recalled the Corolla, the Venza, or the Highlander for floor-mat entrapment.<\/p>\n

In early 2010, Toyota finally had safety recalls but provided the public, the Traffic Safety Administration and the Congress an inaccurate timeline of events. Toyota said it learned about the sticky pedal problem in October 2009 and then promptly fixed \u00a0the problem within 90 days.<\/p>\n

In fact, \u00a0federal authorities said Toyota began its investigation of sticky pedal in the United States no later than August 2009.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

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