Toyota in $1 billion settlement over unintended acceleration, source says

An auto worker loads bodyshells of a Toyota Camry Hybrid car onto the assembly line at the Toyota plant in Melbourne in this August 31, 2009 file photograph.
MICK TSIKAS | REUTERS
An auto worker loads bodyshells of a Toyota Camry Hybrid car onto the assembly line at the Toyota plant in Melbourne in this August 31, 2009 file photograph.
Posted March 19, 2014, at 8:49 a.m.

The U.S. Justice Department has reached a settlement of more than $1 billion with automaker Toyota Motor Corp, stemming from its handling of consumer complaints over unintended vehicle acceleration, a person briefed on the matter said.

The settlement could be announced as early as Wednesday, according to the source, who declined to be identified because the agreement was not yet public.

The deal, which the source said would include a deferred prosecution agreement, follows a four-year investigation by U.S. authorities. Under the deal, the government agrees to delay or forgo prosecution if a company meets certain conditions.

U.S. officials, including Attorney General Eric Holder, Secretary of Transportation Anthony Foxx and Preet Bharara, the U.S. Attorney in Manhattan, were scheduled to announce a “significant criminal law enforcement action” at a press conference in Washington at 9:30 a.m.

Toyota faces hundreds of lawsuits over acceleration problems, which gained public attention after the deaths of a California highway patrolman and his family that was reportedly caused by the unintended acceleration of his Lexus, which is made by Toyota.

The faulty acceleration prompted Toyota to recall millions of vehicles, beginning in 2009.

Last year Toyota received approval on a settlement valued at $1.6 billion to resolve economic loss claims, and is currently negotiating the settlement of hundreds of personal-injury lawsuits.

The U.S. Attorney’s Office in Manhattan first subpoenaed Toyota in 2010, seeking documents related to unintended acceleration and financial records. The office later sought documents related to recalls of steering relay rods.

Toyota said it was cooperating in the investigation.

“Toyota has cooperated with the U.S. attorney’s office in this matter for more than four years,” Toyota spokeswoman Carl Schaffner said on Wednesday. “During that time, we have made fundamental changes to become a more responsive and customer-focused organization, and we are committed to continued improvements.”

The FBI, which was also involved in the investigation, is currently probing General Motors Co for failing to disclose problems with some of its vehicles that were linked to 12 deaths and that led to a recall last month, a source familiar with the matter said.

 

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