News / Economy

Toyota to Pay Record $1.2 Billion Fine for Hiding Safety Issues

FILE - In this photo released by the Utah Highway Patrol, a Toyota Camry is shown after it crashed as it exited Interstate 80 in Wendover, Utah.
FILE - In this photo released by the Utah Highway Patrol, a Toyota Camry is shown after it crashed as it exited Interstate 80 in Wendover, Utah.
Amanda Scott
Toyota Motor Corporation, the world's largest automaker, has agreed to pay a record fine of $1.2 billion to the United States to resolve a criminal investigation into safety issues. The settlement is a record-breaking fine levied against any automaker and could serve as a template for how U.S. authorities resolve a similar case against General Motors.

In announcing the settlement between Toyota and the U.S. Justice Department, Attorney General Eric Holder said the automaker will admit to misleading consumers about two different problems that caused some vehicles to uncontrollably accelerate.

"Today, we can say for certain that Toyota intentionally concealed information and misled the public about the safety issues behind these recalls," said Holder.

The settlement ends a four-year investigation into the extent to which Toyota withheld information from safety regulators about sticky gas pedals and poorly fitting floor mats that caused unexpected acceleration.

The company recalled about 10 million Toyota and Lexus vehicles as the problem became known, but continued to blame driver error and concealed the full extent of the problems.

Holder says the company protected its own brand ahead of its customers. He said prosecutors agreed to defer criminal charges against Toyota, in exchange for allowing independent monitors to review its safety practices.

"The company will submit to rigorous review by an independent monitor that will examine and assess the manner in which Toyota regularly reports safety issues to the public and its regulator. The $1.2 billion payment represents the largest criminal penalty imposed on a car company in the history of the United States. This is appropriate given the extent of the deception carried out by Toyota in this case," he said.

Hundreds of private lawsuits have been filed against Toyota related to the unintended acceleration.  Last year, the automaker agreed to pay more than $1 billion to consumers who say their vehicles lost value due to the recall.

Toyota issued a statement saying it has made "fundamental changes" to its operations to become a more "responsive" company.

The settlement comes on the heels of a General Motors recall of more than 1.5 million vehicles for an ignition switch failure linked to dozens of deaths.   

That automaker, the world's second largest, also faces a federal criminal investigation for delays in issuing recalls.

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