What Toyota’s $1.2 billion settlement means for the auto industry

28 Мар 2015 | Author: | No comments yet »

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Safety advocates delay in recall by General

Toyota’s safety record as recall widens

LaHood on ‘I Think That They Safety Deaf’

GWEN Four years after a criminal investigation of Toyota, the wrapped up its case today by a major settlement, in which the admitted criminal wrongdoing for safety concerns.

ERIC Attorney General: Today, we can say for that Toyota intentionally information and misled the public the safety issues behind recalls.

GWEN IFILL: In a worded statement, Attorney Eric Holder announced the $1.2 billion settlement morning. Toyota, the federal said, purposely concealed it knew about the full of unintended acceleration issues, them to faulty brakes, gas pedals and tangled floor

ERIC HOLDER: Toyota a public safety emergency as if it simply a public relations Put simply, Toyota’s conduct was It showed a blatant disregard for and laws designed to look the safety of consumers. By the company’s own it protected its brand ahead of its own


GWEN IFILL: Recalls in 2009, and ultimately spread to than 10 million Toyota Company sales plunged, but since rebounded.

In a news today, Toyota USA’s legal officer, Christopher insisted the auto giant has more responsive since

He said, “This agreement, difficult, is a major step putting this unfortunate behind us.”

But Holder the case also serves as a to others in the auto industry.

HOLDER: Other car companies repeat Toyota’s mistake. A may damage a company’s reputation, but your customers makes damage far more lasting.

GWEN IFILL: That’s a reference to General Motors, now its own federal investigation over its of faulty ignition switches. The finally recalled 1.6 million last month, amid it had known of the problem since

Another 1.7 million vehicles recalled for different problems on GM says there have 13 deaths, but a study for the Center for Safety found the real could total more 300, a number GM disputes.

In a posted to GM’s Web site new CEO Mary Barra promised the is completely focused on the problem.

BARRA, General Motors: And we are the consumer first, and that is every decision we make.

IFILL: Yesterday, Barra saying she’s very for the loss of life tied to the The GM probe could last As for Toyota, federal prosecutors say will dismiss a criminal fraud charge in three if the company fully complies the settlement.

Some further now on today’s settlement and what it for the auto industry. David covers it for The Detroit News. And Claybrook is a past president of Citizen and she served as chief of the Highway Traffic Safety under Jimmy Carter.

How this, David, compare to settlements we have heard

DAVID SHEPARDSON, The Detroit The Toyota settlement is by far the biggest This was a huge blow to the from the attorney general.

You see this type of language I mean, shameful, cover-up, and that Toyota, during the time frame, knew it had and not only did it opt not to do anything, but it canceled a fix. So this is as strong as the — as the government could be and finally an admission of wrongdoing from which it had steadfastly refused to do for years.

GWEN IFILL: For the record, we representatives from Toyota and GM to us tonight, and they declined.

How big does this seem to be to you in experience following these Joan Claybrook?

JOAN Former President, Public I think it wants huge.

huge because the National Traffic Safety Administration have criminal penalty And so it depends on the Justice Department to do they never have And it’s also suggests, the that they’re going to do more with General and they’re putting out a warning to all the

I think that the chief of every single auto around the world is taking a look at their defect and what they have not and what they should reported. This is going to them to behave and act in the consumer

GWEN IFILL: Often, in kinds of business settlements, the — the affected company says, I’m not wrongdoing, but I’m willing to settle so it doesn’t go to court.

Reading the of fact that Toyota agreed to, they admit wrongdoing.

DAVID SHEPARDSON: They’re not — they’re going to this deferred prosecution so they’re not pleading guilty. But was something the Justice Department wanted in these negotiations have gone on for a long

They didn’t want to simply write a check. wanted them to admit they had done wrong. But on the hand, Toyota has turned the like other companies. now recalling vehicles a lot faster. The has changed dramatically since but they are still paying the from what happened

GWEN IFILL: Is that Joan Claybrook, that are already learning the lessons of the and threats and investigations?

JOAN They are, because the companies have been to keep a lot of this information

And the National Highway Traffic Administration has not had a lot of transparency. It’s that we’d like to see So it’s very hard for the They may write a letter, but it no place. And so here these have been unmasked. very embarrassing. It means going to change, they’re to more responsive, reactive.

And I that certainly all of them are to be more responsive to consumer and lawsuits, because that’s a of information about problems on the

GWEN IFILL: A billion is a lot of money, $1.2 billion, but have been a lot of lawsuits, state, civil lawsuits, I assume are still out there?

SHEPARDSON: The legal bills for GM — for total — will top at least $3 There’s a $1.6 billion with over 10 million of Toyotas for various reasons. have settled with attorney generals.

There are claims for crashes. So when you all the costs up for Toyota, it will be over $3 billion. But, for this year, Toyota to make about $19 billion in about half — double they made the year and 30 percent of the revenue comes the U.S. So, their…

GWEN This hasn’t affected bottom line?

DAVID SHEPARDSON: Well, a little bit, but certainly one out of $19 is still significant.

But what is really about Toyota getting past this, this is a very profitable And the more they can do to show that they have the lesson, that they’re way this, the better, since making a lot of money here.

IFILL: Now, David, you and I here just last talking about the General recall. And I wonder whether rings a bell for you, Claybrook, that this is — you’re Mary Barra, the new GM that you’re looking at and thinking, oh…

GWEN IFILL: …

JOAN CLAYBROOK: Oh, General is definitely next. And there’s been a cover-up of the General problem. The campaign knew.

IFILL: Do we know that

JOAN CLAYBROOK: Oh, absolutely. The found it on the testing ground in They sent out bulletins to dealers in 2005 and 2006 in they identified what the and what the fix was.

They had a with the Department of Transportation in where the Department of Transportation had an where the investigators said the air didn’t inflate, and, by the the ignition switch was on accessory, means it wouldn’t operate the but you could play the radio, but it inflate the air bag.

And so it was clear way then. And I think that the of Transportation has completely failed in its here. And General Motors has the public terribly. And I think are going to be many more and injuries that are going to up. Now that the public is aware of they’re calling General They have all these 50 who are answering the phones, and you’re to hear a lot more about…

GWEN IFILL: If it is true there’s handwriting on the wall what strategy is General using to respond to try to get out ahead of it?

SHEPARDSON: I think Mary publicly apologized this said they are going to care of the victims, although haven’t explained how.

But I do there’s a lot of questions left Yes, the chronology that GM has out shows that they did of significant problems with over 10 years. We don’t the e-mails, the memos that and NHTSA are seeking to know. did they know, when did know it, did GM really think was a serious problem, or was it, as someone suggested, a failure to connect the

So I think there are still a lot of We don’t know if what to GM rises to the same level as But that’s what Congress and are going to get to the bottom of. And that’s GM has got to be worried about. Is this — are going to take the same relations hit?

GWEN Let’s end this by talking government’s role, because was very strong language we from the Justice Department not just from the attorney but also from the secretary of the investigator from the FBI.

So does that say about a in attitude maybe in the federal towards these kinds of

DAVID SHEPARDSON: Isn’t interesting that NHTSA, as said, can only impose of about $60 million on Toyota. And the Department said, no, we are going to you $1.2 billion for all the vehicles you that we believe fraudulently sold.

So that basically means, they can fine GM or any other company, sky is the limit, if they they broke the law. And every auto company has got to be nervous and checking their very carefully.

GWEN Briefly, do you think it’s a in the federal government’s approach?

CLAYBROOK: We need new legislation. We criminal penalties at NHTSA, they don’t have. We higher civil penalties. We more transparency at that

Yes, it’s sort of don’t ask, don’t No one asked, they didn’t And they should have. And so I that there are a number of including more submission of and data. And they need a budget. Their budget is million for the whole auto program for the entire United Totally insufficient.

GWEN Joan Claybrook, Public of course, is how we know you, and Shepardson of The Detroit News. you both very much.

CLAYBROOK: Thank you.

SHEPARDSON: Thanks, Gwen.

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