Toyota agreed last week to pay a record $1.2 billion criminal penalty for misleading consumers and the government about unintended acceleration in its vehicles. This safety defect and others have resulted in numerous injuries and deaths. Over 10 million Toyota vehicles have been recalled so far.
This is the largest criminal penalty ever imposed on a car manufacturer. As part of the agreement, the Justice Department charged Toyota with wire fraud but deferred the criminal charge for three years while the company submits to government monitoring.
We have been reading about Toyota’s safety defects for many years now, along with the more important violation of trust: the Japanese automaker repeatedly failed to warn the public about safety problems. CNN reported last week that the company “at one point boasted internally about saving $100 million in costs by avoiding a full safety recall.”
To date, Toyota has paid out more than $66 million in fines for not immediately reporting defects. Several of these fines have been record-breaking. In 2010, the National Highway Traffic Safety Administration fined the company a record $16 million for its delayed response in notifying the government about defects. In 2012, the NHTSA fined the company an additional $17.4 million.
The company has faced numerous injury and wrongful death lawsuits. In addition to sticky pedals and unintended acceleration, unsecured floor mats and other equipment have caused safety hazards. Last October, an Oklahoma jury decided that defective electronics were to blame for a car accident which killed a woman and seriously injured another person. Toyota was ordered to pay $3 million in damages.
As for Toyota, U.S. Attorney General Eric Holder told the Detroit Press: “Put simply, Toyota’s conduct was shameful. It showed a blatant disregard for systems and laws designed to look after the safety of consumers. By the company’s own admission it protected its brand ahead of its own consumers.”
Still, consumers have continued to buy Toyota. The company was the top-selling automaker in 2012 and 2013, selling 9.98 million vehicles in 2013.