$1.2B Toyota penalty sends warning to auto industry | The Detroit News

23 Апр 2015 | Author: | No comments yet »
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$1.2B Toyota penalty warning to auto industry

Attorney Preet Bharara, and U.S. Attorney General Holder announce the settlement Bharara cautioned the entire industry to take notice, Holder adding, ‘a may damage a company’s reputation, but your customers makes damage far more lasting.’ Wong / Getty Images)

The billion criminal penalty Motor Corp. will pay to a four-year government probe sudden acceleration problems may be a for General Motors Co. and other facing growing scrutiny of handling of safety recalls.

It the largest fine levied an auto company in a U.S. probe. And that is sure to get the of automakers including GM, which is in the stages of a massive recall for an switch flaw that has linked to 12 deaths.

The lessons GM can from the case, industry say, are to move quickly, customers — with free cars and discounts off new cars, for — and when in doubt, recall that may become a problem.

record-breaking fine also up the biggest lesson of all: mislead regulators, Congress or the And that’s a lesson GM can put to work as it prepares to be called by Congress spring to explain its actions.

“GM now has a good idea of what it is to face,” said Peter a Wayne State University law and former SEC attorney. He believes GM is to face a criminal probe and tough questions in the months or to come, and says the government ultimately seek to impose a of more than $1 billion on GM.

said the Justice Department is a message to automakers that it use the “wire fraud” section of the law to big penalties against automakers mislead the public or regulators. are going to have make that there is nothing and ensure that GM has handled all of its appropriately.

With criminal and fines and settlements, the final to Toyota of the unintended acceleration is more than $3 billion.

agreed to three years of monitoring as part of an agreement to a criminal wire fraud that will be dismissed in if the Japanese automaker adheres to the

While safety recalls been the purview of the National Transportation Safety Administration in the the U.S. Justice Department got the act in the Toyota case.

At a press called Wednesday to announce the between the government and Toyota, General Eric Holder Toyota engaged in a cover-up to selling cars, even it knew it had problems.

The Justice Department released a of the facts that said one employee wrote in a 2010 “Idiots! Someone will go to if lies are repeatedly told. I support this.”

Holder the automaker’s behavior “shameful.”

“It a blatant disregard for systems and designed to look after the of consumers,” he said. “By the company’s own it protected its brand ahead of its own

Holder issued a warning to the industry: “Other car companies not repeat Toyota’s mistake: A may damage a company’s reputation, but your customers makes damage far more lasting.”

He confirm or deny the ongoing into GM.

U.S. Attorney Bharara, who shared the press podium with Holder, said “General Motors” of Toyota in describing the settlement — a of the tongue that didn’t go “The entire auto should take notice,” said.

Aided by the FBI, office in Manhattan investigated for four years. It ultimately a wire fraud statute to Toyota $1.2 billion — it deemed were the proceeds misleading regulators. The deputy of the office’s criminal division, Jonas, who led the Toyota investigation, is now the GM probe, according to lawyers who spoken with her.

“The Justice Department with Toyota is a complete said Clarence Ditlow, of the Center for Auto Safety. today, automakers faced fines and no criminal penalties. fine of $1.2 billion Toyota makes the $35 million fine that NHTSA can seem like chump

GM is undergoing the same kind of that Toyota did in 2010. The automaker disclosed last that it knew of 12 deaths and 31 linked to its recall of 1.62 older cars for faulty switches that inadvertently off the engine and disabled front air GM this month disclosed it learned of an ignition problem in a Saturn Ion in 2001, but opted not to the vehicles for a decade, despite of complaints of stalling and reports of crashes.

Like Toyota, GM is congressional hearings and has been to produce tens of thousands of of records to committees and NHTSA, is also investigating. GM CEO Mary is likely to face hostile before Congress — as a contrite Toyoda, head of Toyota, did in 2010.

Senate Commerce head Jay Rockefeller, D-W.Va. hearings on Toyota and plans on the GM case as well.

“The Department’s settlement with should put all automakers on notice: is absolutely no excuse for misleading the or concealing information from the Highway Traffic Safety he said. “Lives are at risk this happens. Safety always be the first priority for regardless of how it affects profit

Toyota admits wrongdoing

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In the of Toyota’s sudden acceleration the Japanese automaker hired a new of its Washington, D.C. office and many changes in how it handled safety matters. The company has altered how it handles recalls and has a much better relationship regulators.

Toyota issued a Wednesday saying it had taken for its mistakes — the first time it had wrongdoing.

“In the more than years since these we have gone back to at Toyota to put our customers first. this agreement, while is a major step toward this unfortunate chapter us,” said Christopher Toyota North America’s legal officer.

The $1.2 payment represents the largest penalty imposed on a car company in history. Toyota — which is on for record profits of nearly $19 for its fiscal year that this month — must the payment by Tuesday.

GM has shown and repeatedly apologized. But no one has yet been or disciplined.

GM’s lawyers — two outside firms — are racing to get to the of what might have the recall process. They to show that they are no stone unturned, said

“Building a defective product is not a But misleading regulators or the public can Henning said.


GM’s woes are in many different than Toyota’s. The GM is only for cars it long ago selling, while records that Toyota opted not to problems with vehicles were still in dealer Ultimately, Toyota was forced to stop selling about the vehicles at dealerships in early until it came up with a

But there are other similarities: GM CEO Barra named a new vice for global safety this Toyota named a series of new to handle safety matters in the and gave them the authority to vehicles without approval Japan.

Since the recall Toyota has redoubled its efforts to relations with Congress and In December 2012, Toyoda an unannounced trip to Capitol to meet with a key member of he went back to the committee where he had testified to take look.

Toyota sales in the aftermath of the recall crisis but since largely rebounded. analysts don’t believe GM see the same loss in sales.

But the Toyota saga could the massive costs GM could if the Justice Department finds wrongdoing. In addition to the $1.2 criminal penalty, Toyota $66 million in civil penalties for three separate recalls, the that NHTSA could (If the safety agency finds GM the recall, it could impose no than a $35 million fine.) class-action and private lawsuits, the cost to Toyota is more $3 billion.

The other fallout be new safety legislation. Many proposed in the wake of the Toyota crisis in 2010 were approved and could be resurrected — hiking maximum NHTSA to as much as $250 million.

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Toyota Fine N
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