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Toyota has reached a deal with the Justice Department to settle a four-year criminal investigation into whether the company misled investigators and the public about a sudden-acceleration defect that has caused injuries and deaths, federal authorities announced on Wednesday.
The settlement - for $1.2 billion, among the largest ever paid by an automaker - included an unusual admission of wrongdoing by the company.
"Toyota's conduct was shameful," the United States attorney general, Eric H Holder Jr, said at a morning news conference announcing the deal. He added that the carmaker "intentionally concealed information and misled the public."
The settlement with Toyota could provide a template for the authorities pursuing a similar case against General Motors linked to a defect that caused GM vehicles to shut down unexpectedly.
Holder seemed to signal as much on Wednesday, saying that "other car companies should not repeat Toyota's mistake."
Toyota also agreed to cooperate with an independent monitor who will oversee Toyota's public statements and regulatory reporting about safety issues. The deal is subject to judicial review and includes a so-called deferred prosecution agreement, in which federal prosecutors would file criminal charges but dismiss them after three years if the company resolved its problems.
The agreement stems from the unintended acceleration of Toyota vehicles, a problem that had already cost the automaker billions of dollars. Toyota issued recalls for about 9.4 million vehicles over sticky accelerator pedals, as well as floor mats that could cause those pedals to become stuck.
It is rare for automakers to be held criminally liable for defects, and it is rarer still for such accusations to lead to a significant fine.
"The entire auto industry should take notice," said Preet Bharara, the United States attorney in Manhattan who led the investigation of Toyota.
At one point during the news conference, which was also attended by the transportation secretary, Anthony R Foxx, Bharara slipped up and said "General Motors" instead of "Toyota," prompting awkward smirks from government officials including Holder, who had just taken pains to avoid saying anything about whether General Motors was even under investigation.
Toyota initially denied publicly and in conversations with federal regulators that it knew about the defect, but a Federal Bureau of Investigation inquiry found that internal company records showed that the automaker knew the problem was deepening, two people briefed on the matter said.
"Toyota put sales over safety and profit over principle," George Venizelos, the FBI assistant director in charge of the New York field office, said in a statement on Wednesday. "The disregard Toyota had for the safety of the public is outrageous."
Toyota is separately in talks to settle state and federal lawsuits filed against it, claiming wrongful death and personal injury.
In a statement, Christopher P Reynolds, Toyota's chief legal officer in North America, said the company took "full responsibility" for its actions. "Entering this agreement, while difficult, is a major step toward putting this unfortunate chapter behind us," Reynolds said.
Toyota said it had given more autonomy to regional officers in issuing recalls, and would spend an extra four weeks on developing new models to make sure the designs were safe.
The company had won three lawsuits over sudden acceleration, but was dealt a setback in October when a jury in Oklahoma found that the Toyota Camry's electronic throttle system was defective and that Toyota had acted with "reckless disregard" despite reports of problems with the cars.
The jury found Toyota liable for a crash that killed one woman and injured another. It awarded $1.5 million to the families of each of the women, determining that the 2005 Camry they were riding in suddenly accelerated through an intersection and hit an embankment in 2007. A day after the verdict, Toyota reached a separate undisclosed settlement with the families of the two women.
Legal analysts said at the time that the verdict most likely spurred Toyota to pursue a broad settlement of its remaining cases.
Separately, in February, Toyota voluntarily ordered a global recall of nearly 2 million gas-electric Prius vehicles because of a programming error that could cause the engine to shut down. The speed and extent of the recall was seen as an attempt to prevent the regulatory and public scrutiny of the sudden-acceleration problem.
©2014 The New York Times News Service
