The U.S. Attorney's Office fined Toyota $1.2 billion on Wednesday because it lied about two incidents that led to unintended acceleration in its vehicles in 2009 and 2010.
The fine, the largest that the U.S. Department of Justice has ever levied against an automaker, is subject to judicial review. The DOJ deferred prosecution against Toyota after the company admitted that it misled U.S. consumers about defective floor mats and sticky pedals.
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“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,” Attorney General Eric Holder said in a press release.
The issue became public in August 2009 after an accident in San Diego, Calif., killed a family of four. A Lexus dealer had improperly installed an all-weather floor mat into a Lexus ES350. The mat entrapped the gas pedal, accelerating the car at full throttle. The incident occurred after the National Highway Traffic Safety Administration (NHTSA) had opened a defect investigation into the ES350 over that issue in 2007 and identified other Lexus models that might be similarly defective.
Toyota launched its own internal probe of the issue that year identifying the issue, but didn't share those results with the NHTSA. The company recalled 55,000 mats in 2007, but not any vehicles. The company then revised internal guidelines for a minimum clearance of 10 mm from a fully depressed gas pedal to the floor. However, the guidelines weren't applied to all vehicles — and not to the ES350 involved in the San Diego accident. As a result, despite knowing the vehicles had a potentially fatal defect, Toyota kept producing them to the same specifications.
Meanwhile, Toyota was also hiding a second problem with its vehicles that led to unintended acceleration: a sticky pedal. That defect was based on a plastic material that could cause gas pedals to stick in a partially depressed position. Such pedals, manufactured by a U.S. company known as A-Pedal Co., were installed in the Camry, Avalon and Corolla in the United States.
Although Toyota informed European distributors about the issue and instituted an informal recall (if a customer complained, he could receive a new pedal installed for free), Toyota failed to notify U.S. regulators. Toyota execs in the U.S. identified the problem around the same time of the San Diego accident in 2009. The company then opted to implement a design change addressing the problem. However, it left no paper trail of this change. In November 2009, while negotiating a floor mat recall with the NTHSA, Toyota failed to mention the sticky pedal problem.
Publicly, Toyota also lied about its knowledge of the sticky pedal problem. On Nov. 25, 2009, the company's U.S. subsidiary offered the following statement: “The 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.”
A Toyota rep also told the press, “We’re very, very confident that we have addressed this issue.”
Though public awareness of the issue in late 2009 was relatively low, it became front-page news the following January as Toyota recalled 5.2 million vehicles for the floor mat issue and another 2.3 million vehicles for sticky accelerator. It recalled another 1.8 million vehicles for both issues, bringing the total to a whopping 9.3 million cars worldwide.
The recalls, which are blamed for more than 37 deaths, caused a sharp drop-off in the public perception of Toyota. Four years later, the issue has faded from public consciousness. However, the latest disclosures may change that.
In a statement addressing the disclosure, Christopher P. Reynolds, the chief legal officer of Toyota North America, said:
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. [...] Entering this agreement, while difficult, is a major step toward putting this unfortunate chapter behind us.
The news comes as General Motors is grappling with its own recall, which affects more than 3.1 million vehicles worldwide. That recall, which has affected some Buick Enclave, GMC Acadia, Chevrolet Traverse and Saturn Outlook models over the past decade, covers a glitch in which the ignition switch in certain models can shut off while the car is running, disabling air bags and power steering. So far, this issue has been linked to 12 deaths. GM CEO Mary Barry has issued a public statement on the matter: "Something went wrong with our process in this instance, and terrible things happened."
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