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Toyota To Pay $1.2 Billion Fine in Sudden Acceleration Inquiry

By Brian Chase on March 20, 2014 - No comments

toyota recallsToyota has struck a $1.2 billion deal with the U.S. Department of Justice, which will put an end to a four-year criminal probe into whether the company deliberately misled investigators and the public about a sudden acceleration problem that caused injuries and fatalities. According to a report in The New York Times, the fine is the largest paid by a car manufacturer, which included an admission of wrongdoing by the company – an acknowledgement that is unprecedented.

Toyota Misled Regulators and Consumers

U.S. Attorney General Eric H. Holder Jr. called Toyota’s conduct “shameful.” He said other car companies should not repeat Toyota’s mistake. The agreement stems from the sudden and unintended acceleration issue caused by sticky gas pedals and faulty floor mats. These vehicle defects led to 10 million Toyota vehicles, including several popular models, being recalled.

Toyota initially denied publicly and in conversations with federal regulators that it knew about the defect, but an FBI inquiry yielded internal memos and records, which showed clearly that the automaker knew about the sudden acceleration issues and deliberately concealed them from investigators and consumers. There is no question in this case that Toyota put profits over people, its customers, many who were injured or killed as a result of these dangerous and defective vehicles.

GM Refuses to Take Responsibility

It is ironic that this announcement comes on the same day when General Motors CEO Mary Barra announced that although GM did not move quickly enough on the ignition switch fault, but said she could not promise that the automaker will “accept responsibility” for the deaths, injuries and damages. The faulty ignitions triggered the recall of 1.6 million cars and were blamed for 12 deaths in 31 crashes.

Barra’s reasoning for this appalling announcement? Barra tells USA Today that the deaths, injuries and damages relating to the auto defect happened before the government bailout in 2009 when the automaker went through government-supervised bankruptcy reorganization. Essentially, this bankruptcy deal freed the “new GM,” which was formed in July 10, 2009, from product liability and other claims for incidents before that date. Barra says the company will “fix our process” and that they are “very sorry.” But, she said, she can’t promise that the automaker will establish a victims’ fund or otherwise have GM take responsibility for pre-bankruptcy accidents.

It is interesting that Barra says she “can’t promise” to take care of the victims. There is no question that she or GM could absolutely do that if they had the will to do it. GM could do the right thing and fairly compensate these victims and their families.  Instead, victims and families of deceased victims will have to go through the litigation process and watch GM as they deny any wrongdoing or defects.

Holding Automakers Liable

It’s evident that GM is going through the same route that Toyota took just a few years ago. Have these corporations learned nothing from the Toyota fiasco? GM has admitted that they “moved slowly” and that they messed up when it came to issuing a safety recall. They had known about this serious safety issue for a decade, but did absolutely nothing about it. And now, they expect to get away with an apology?

Toyota still continues to fight lawsuits filed by devastated families as they use a high-powered legal defense team to deny problems with their vehicles. What would it take for these automakers to admit fault, fix the problem, pay the damages and learn from their experiences rather than deny, cover up and deceive? What’s it going to take for them to do the right thing?

GM believes they should get a free pass after at least 13 people have died due to their defective vehicles because of the bankruptcy. What they forget is that it was the taxpayers who bailed them out. It is shameful they are using that as an excuse to shirk responsibility. Their words and actions now are nothing but a slap in the face of the very same taxpayers who bailed them out.

 

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