Toyota reaches $1.1 billion settlement over 2010 recall issues(Read article summary)
Toyota has reached a $1.1 billion settlement stemming from a mass of recalls of Toyota and Lexis vehicles in 2010. Much of the settlement will be used to compensate Toyota and Lexus owners for the loss in resale value of their vehicles.
In 2010, Toyota was on the tip of everyone's tongue -- not because of some stellar new products or sky-high safety ratings, but because of massive Toyota and Lexus recalls affecting millions of vehicles across the country.
Those recalls stemmed from numerous complaints of unintended acceleration in Toyota vehicles. While many of those complaints were later found to be the result of "driver error" -- and at least one was an out-and-out hoax -- the hype surrounding the recall dealt Toyota a big, boldface black eye. As a result, many Toyota and Lexus owners were left with vehicles that were perfectly safe, but significantly diminished in value.
Ultimately, that led to a $1.1 billion settlement, much of which was used to compensate Toyota and Lexus owners for the loss in resale value of their vehicles. The company also shelled out to the feds, including a whopping $17.35 million fine for taking far too long to recall 2010 Lexus RX models. And of course, Toyota carried out countless recalls, which cost millions upon millions more.
Now, Toyota is slated to make another big payout: according to Detroit News, the automaker will cough up $1 billion to settle a four-year-long criminal investigation into Toyota's dealings with the federalgovernment in the wake of the recall fiasco. That investigation explored the question of whether Toyota misled government inspectors and lied to Congress in an attempt to derail or delay the costly recalls.
Though the terms of the settlement are still under wraps, they're expected to be announced within the next few weeks. Sources suggest that Toyota won't have to admit to any wrongdoing, but in addition to paying the $1 billion fine, the automaker will perhaps be placed on probation for several years. The details of such a probation aren't known, but it's likely that the company would be subject to significantly greater government oversight during that period.
If these early reports are accurate, it could be the beginning of the end for Toyota's recall drama -- though we'd expect a few plot twists and turns before the curtain finally comes down. We'll keep you posted.