Toyota Officially Avoids Prosecution With $1.2 Billion Payout To Feds

As the U.S. Department of Justice sets its sights on General Motors, they're closing the book on an investigation into another major auto manufacturer — and it will be an expensive one. Toyota will settle with the Justice Department to the tune of $1.2 billion.


As we reported in today's Morning Shift, this settlement was expected to happen, and now it's official. Toyota was under federal criminal investigation over claims that it misled consumers and made deceptive statements to the government about the unintended acceleration issue.

USA Today elaborates on the situation, which involved heavy criticism of the automaker's handling of the problem by U.S. Attorney General Eric Holder:

"Today we can say for certain that Toyota intentionally concealed information and misled the public about the safety issues behind these recalls," Attorney General Eric Holder said in announcing the settlement. "Put simply, Toyota's conduct was shameful," he said.


This investigation by the Justice Department was independent of the lawsuit settlement related to lost value of Toyota cars, as well as regulator and Congressional probes. It focused on whether Toyota provided false or incomplete statements to the National Highway Traffic Safety Administration and how it handled complaints.


Under the agreement, the feds agree to defer prosecution and then dismiss its case as long as Toyota makes the $1.2 billion payment. That will go into effect for the fiscal year ending in March.

Toyota has said the unintended acceleration issue in some of their cars from the 2000s was due to sticky accelerator pedals and faulty floor mats. Some critics have blamed electronic issues, but a federal investigation found no evidence of this. Most cases were found to be due to "pedal misapplication," or drivers confusing the brake with the accelerator.


Nonetheless, between this settlement and the earlier lawsuits, unintended acceleration proved to be an extremely expensive ordeal for Toyota. An official said in a statement that Toyota takes responsibility for the matter, has enhanced their safety since then, and is eager to put it behind them.

"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," said Christopher P. Reynolds, chief legal officer, Toyota Motor North America. "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. We remain extremely grateful to our customers who have continued to stand by Toyota. Moving forward, they can be confident that we continue to take our responsibilities to them seriously," Reynolds concluded.


When beige bites back, it bites back hard.

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