Toyota to Pay $1.1 Billion in Unintended Acceleration Cases
Toyota has announced it has reached an agreement to settle outstanding lawsuits in the US related to the automaker’s previous recalls for unintended acceleration.
In one of the largest lawsuits of its kind, the Japanese automaker will reimburse owners of up to 16-million cars resulting in a one-time, $1.1 billion pre-tax charge against its fourth quarter earnings. Also, under the agreement, Toyota will install a brake-override system in cars where the floor mats got stuck.
In addition, the automaker is setting up a fund of $250 million to be paid to former Toyota owners who sold their vehicles from September 1st, 2009 to December 31st, 2010. A separate fund of $250 million will also be established to compensate current owners whose vehicles are not eligible for the new brake-override system.
All 16-million owners involved in the class action lawsuit will also get a new customer care plan, providing warranty on certain parts tied to unintended acceleration for between three to 10 years.
“This agreement marks a significant step forward for our company, one that will enable us to put more of our energy, time and resources into Toyota’s central focus: making the best vehicles we can for our customers and doing everything we can to meet their needs,” said Christopher P. Reynolds, group vice president and general counsel, Toyota Motor Sales, U.S.A, and chief legal officer, Toyota Motor North America. “In keeping with our core principles, we have structured this agreement in ways that work to put our customers first and demonstrate that they can count on Toyota to stand behind our vehicles.”
While seen as an admission of guilt, Toyota’s settlement legally does not mean as much, with Reynolds adding, “This was a difficult decision — especially since reliable scientific evidence and multiple independent evaluations have confirmed the safety of Toyota’s electronic throttle control systems. However, we concluded that turning the page on this legacy legal issue through the positive steps we are taking is in the best interests of the company, our employees, our dealers and, most of all, our customers.”
Jason Siu began his career in automotive journalism in 2003 with Modified Magazine, a property previously held by VerticalScope. As the West Coast Editor, he played a pivotal role while also extending his expertise to Modified Luxury & Exotics and Modified Mustangs. Beyond his editorial work, Jason authored two notable Cartech books. His tenure at AutoGuide.com saw him immersed in the daily news cycle, yet his passion for hands-on evaluation led him to focus on testing and product reviews, offering well-rounded recommendations to AutoGuide readers. Currently, as the Content Director for VerticalScope, Jason spearheads the content strategy for an array of online publications, a role that has him at the helm of ensuring quality and consistency across the board.
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Am I doing my math right? $62.5 per person?
I wonder how many of these incidents were just people stepping on the wrong pedal. It can happen to anyone and I especially to older people. It has happened to my father once as well when he was really nervous and tired.