Toyota to pay $1.2 billion settlement

The United States has reached a $1.2 billion settlement with Toyota Motor Corp., concluding a four-year criminal investigation into the Japanese automaker's disclosure of safety problems, Attorney General Eric Holder announced Wednesday.

In prepared remarks, Holder said Toyota misled Congress and the public over the sudden, uncontrollable acceleration of Toyota cars. He said the company concealed information for the sake of its brand.

“Put simply, Toyota's conduct was shameful,” Holder said. “It showed a blatant disregard for systems and laws designed to look after the safety of consumers. "The $1.2 billion payment represents the largest criminal penalty imposed on a car company in U.S. history. This is appropriate given the extent of the deception carried out by Toyota in this case. " 

Toyota will have to "fully admit wrongdoing" as part of the deal, Holder said.

But the penalties are not expected hurt Toyota's finances in the long term. In the last fiscal quarter, the automaker posted $5.2 billion in profits, crediting a weak yen and strong global sales.

In a statement on Wednesday, Toyota said it has "cooperated with the U.S. Attorney's office in this matter for more than four years" and had "made fundamental changes to become a more responsive and customer-focused organization. We are committed to continued improvements."

The criminal investigation focused on whether Toyota was forthright in reporting problems related to unintended acceleration troubles.

From 2010 through 2012 Toyota paid fines totaling more than $66 million for delays in reporting unintended acceleration problems.

The NHTSA never found defects in Toyota cars’ electronics or software, which had been targeted as a possible cause.

“The Justice Department settlement with Toyota is a complete game changer," Clarence Ditlow, executive director of the Center for Auto Safety, said in a statement. “Until today, auto makers faced insignificant fines and no criminal penalties under the Vehicle Safety Act."

The settlement continues a string of bad publicity for Toyota, which before the acceleration cases had a strong image of reliability. Since the cases surfaced, the company's brand image has been damaged and it has lost U.S. market share as competition has intensified.

In 2009 Toyota issued massive recalls, mostly in the U.S., totaling more than 10 million vehicles and involving various problems, including faulty brakes, gas pedals and floor mats.

In 2013 the company agreed to pay more than $1 billion to resolve hundreds of lawsuits claiming that owners of its cars suffered economic losses because of the recalls. But that settlement did not include wrongful death and injury lawsuits that have been consolidated in California state and federal courts.

Last year an Oklahoma jury awarded $3 million in damages to the injured driver of a 2005 Camry and to the family of a passenger who was killed.

The ruling was significant because Toyota had won all previous unintended acceleration cases that went to trial. It was also the first case in which attorneys for plaintiffs argued that the car's electronics — in this case, the software connected to a Camry's electronic throttle-control system — were the cause of the unintended acceleration.

At the time, legal experts said the Oklahoma verdict might cause Toyota to consider a broad settlement of the remaining cases. Until then, Toyota had been riding momentum from several trials in which juries found it was not liable.

Toyota has blamed drivers, stuck accelerators or floor mats that trapped the gas pedal for the acceleration claims that led to the big recalls of Camrys and other vehicles. The company has repeatedly denied its vehicles are flawed.

In the Oklahoma case, Toyota attorneys theorized that the driver mistakenly pumped the gas pedal instead of the brake when her Camry ran through an intersection and slammed into an embankment.

But after the verdict, jurors said they believed the testimony of an expert who said he found flaws in the car's electronics.

Al Jazeera and The Associated Press