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Toyota Nearing Sudden Acceleration Settlement with Feds

Deal may cost maker $1 bil – but avoid criminal prosecution.

by on Feb.10, 2014

Toyota appears to be reaching a settlement with the National Highway Traffic Safety Administration regarding the unintended acceleration issues that have plagued the maker.

Toyota may soon write a check for more than $1 billion to settle a government investigation related to its sudden acceleration problems, avoiding the possibility of criminal prosecution.

Several media outlets, including the Wall Street Journal and the Detroit News, are citing “unnamed sources familiar with the negotiations” to describe what appears to be a deal that would end a four-year investigation by the U.S. Department of Justice. The government had been looking into the possibility that Toyota had intentionally misled federal regulators about possible defects involving its vehicles.

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Starting in late 2009, Toyota ordered a series of recalls covering more than 14 million vehicles worldwide for various problems that could potentially cause them to surge out of control. Up to that point, more than 3,000 complaints had been received by both the maker and federal regulators, the National Highway Traffic Safety Administration (NHTSA) linking the problems to at least five deaths. (more…)

Toyota Halts Sales of Nearly Entire Line-Up Due to Safety-Related Issue

But maker so far declining to order recall.

by on Jan.30, 2014

Toyota's move impacts major models including the Avalon, shown here, Camry, Corolla and others.

(This story has been updated to reflect comments and details provided by Toyota.)

For the second time in recent years, Toyota has taken the unusual step of halting sales of almost its entire U.S. line-up due to a potential safety defect – however the maker says it currently does not plan to recall vehicles it has already sold.

That could change, however, if federal regulators decide a recall is warranted, a move now under study by the National Highway Traffic Safety Administration.  It remains to be seen how the public will view the latest problem which occurs almost exactly four years after the Japanese giant briefly halted sales of a variety of vehicles due to potential problems with so-called unintended acceleration.

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Today’s announcement covers such high-volume models as the Toyota Camry and Corolla sedans, as well as the Sienna minivan, and Tacoma and Tundra pickups. Also impacted are the full-size Avalon sedan and Avalon and Camry Hybrids.  Only vehicles equipped with electric seat heaters are covered by the stop-sale announcement because they were manufactured with materials that did not meet flame-retardant standards.


Toyota Pays $29 Mil for Poorly-Handled Recalls

Settles with 29 states for delayed response to unintended acceleration problems.

by on Feb.15, 2013

The Lexus RX400h was covered by the latest unintended acceleration safety recall.

In the latest development involving Toyota’s problems with so-called unintended acceleration, the maker has agreed to pay $29 million as part of a settlement with the attorneys-general in 29 states while also improving the way it handles future recalls.

The automaker will also set aside another $5 million to help reimburse owners of various Toyota Motor Co. products who were affected by those recalls to cover costs for rental cars, taxi rides and other replacement transportation.

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Toyota has already paid a series of record fines levied by the National Highway Traffic Safety Administration as a result of its handling of recalls linked to a series of problems that could cause its vehicles to surge out of control. Since the first of those recalls – involving issues such as carpet entrapment and sticky accelerators – was launched in 2009, more than 10 million vehicles have been affected.

“Car buyers deserve the assurance that manufacturers will quickly and appropriately respond to known safety risks,” Arkansas Attorney General Dustin McDaniel said. “The terms of this settlement require that Toyota make changes to improve its responsiveness to safety issues, and that benefits consumers.”


Toyota Recalls Nearly 7.5 Mil Vehicles For Fire Risk

About 2.5 million vehicles sold in US involved.

by on Oct.10, 2012

The 2007 Camry is one of a wide array of Toyota product lines involved in the latest recall.

Toyota Motor Co., still in recovery mode after a series of problems that plagued its global operations over the last three years, has announced it is recalling 2.5 million vehicles sold in the United States due to a potential risk of fire.

On a worldwide basis, the recall involves 7.43 million vehicles sold under the Toyota and Scion brands.  This is the largest safety-related service action the maker has announced since it began a series of recalls related to the risk of unintended acceleration in late 2009. That and other safety issues led Toyota to recall 14 million vehicles in 2009 and 2010.

In fact, many of the vehicles involved in the new recall Toyota is announcing also were called back one or more times due to unintended acceleration issues.

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The latest recall is the result of a problem with a potentially defective power window switch on the driver’s side of the affected vehicles which, the maker says, “may experience a “notchy” or sticky feel during operation. If commercially available lubricants are applied to the switch in an attempt to address the “notchy” or sticky feel, melting of the switch assembly or smoke could occur and lead to a fire under some circumstances.”


Senator Questions if Toyota Got Free Ride in Unintended Acceleration Investigation

Iowa’s Grassley says “key questions…unanswered.”

by on Jul.12, 2012

Iowa's GOP Sen. Chuck Grassley wants NHTSA to take a closer look at Toyota's problems with Unintended Acceleration.

Did Toyota get off too easily after it was largely cleared by a pair of investigations looking into the maker’s problems with so-called Unintended Acceleration?

That’s a possibility being raised by Sen. Chuck Grassley, an Iowa Republican, who has sent a letter to the National Highway Traffic Safety Administration, or NHTSA, questioning the results of two studies conducted for the agency, in particular one done by NASA that found no evidence of electronic gremlins that might cause Toyota vehicles to race out of control.

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“Key questions about the cause of unintended acceleration remain unanswered,” the veteran lawmaker wrote in a letter to NHTSA Director David Strickland.


Feds Expand Toyota Fire Probe

Faulty window switches under investigation.

by on Jun.18, 2012

NHTSA has nearly doubled the number of Toyota vehicles, such as this 2007 Camry, now involved in a potential fire hazard investigation.

Federal safety investigators have broadly expanded an investigation into a potential fire hazard that now involves about 1.4 million Toyota cars and sport-utility vehicles.

According to the National Highway Traffic Safety Administration it is looking into reports that the window switches on the driver’s side doors of a number of different Toyota models can overheat and catch fire.  The problem has so far been linked to 161 fires and nine injuries.

The announcement of the expanded probe comes as NHTSA also moves ahead with the probe of nearly 342,000 Chevrolet Trailblazers due to reports of dor fires.  And it comes days after the probe of Jeep models was expanded to cover 5 million SUVs.

The Toyota probe was initially launched in February and covered 800,000 2007 Camry sedans and RAV4 SUVs.  At the time, reported that due to Toyota’s practice of making widespread use of common components it was possible that the probe would be expanded to another models.

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That, in fact, is now the case, with NHTSA targeting an additional 800,000 vehicles, including some Yaris subcompacts from the 2007 to 2009 model-years, as well as the entire 2008 Highlander Hybrid SUV run.  NHTSA has also expanded the probe to cover Camry sedans produced in the 2008 and 2009 model-year.


Toyota Facing Federal Fire Investigation – Could Impact Over 800,000 Vehicles

Follows reports of fires in doors of Camry, RAV-4 models.

by on Feb.10, 2012

The 2007 Toyota Camry faces an investigation into possible fire problems.

As many as 830,000 Toyota sedans and crossovers could be involved as federal safety regulators open an investigation into reports of fires in the driver’s side doors of the maker’s popular Camry sedan and RAV-4 crossover.

Six fires have so far been reported to the National Highway Traffic Safety Administration and the problem appears to be linked to problems with the power window switch in the driver’s door.

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The investigation focuses on Camry and RAV-4 vehicles sold during the 2007 model-year.  It is uncertain whether the problem could expand to other models.  Toyota has a practice of sharing underlying parts and components – such as switches and controls — in a wide variety of products as a result, the maker’s recalls often extend to a number of different models from a particular model-year resulting in extremely large recalls.


Toyota Recalling 2.2 mil More Vehicles Due to Gas Pedal Jamming

News comes after maker seemingly cleared in federal unintended acceleration investigation.

by on Feb.24, 2011

Added to Toyota's long recall list.

Toyota will recall another 2.2 million vehicles in the U.S. to fix a problem that could lead those products to suddenly surge out of control, it announced today.

The move was an unexpected and seemingly self-inflicted setback for a company that seemed poised to put the ongoing issue of so-called “unintended acceleration” behind it.  The announcement comes a year and a day after Toyota’s top U.S. executive, Jim Lentz, apologized to Congress for delaying action on the runaway car problem.  But it also follows by less than two weeks news that a federal investigation had ruled out mysterious electronic gremlins that might cause Toyota products to surge out of control.

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This is the third major recall by the Japanese maker to deal with unintended acceleration since October 2009 – and could raise questions about why it has taken Toyota so long to act.  Last year, the maker paid a record total of $48.8 million in federal fines for failing to act promptly on safety issues, including problems with sticky accelerator pedals.


Toyota Profits Down – But Big Increase Forecast

Maker hammered by strong yen, but bets on cost-cutting, emerging market demand.

by on Feb.08, 2011

Toyota is hoping to boost sales - and profits - with a new Prius sub-brand of hybrids.

Hammered by a strong yen, the end of green car incentives at home and the cost of reining in quality and safety issues, Toyota Motor Co. is reporting a sharp, 39% decline in its fiscal third-quarter net earnings, but the maker now expects full-year profits to come in at 40% above previous forecasts, largely driven by sales in emerging markets.

While vehicle sales slipped during the October – December quarter, the world’s largest automaker also predicts sales will recover and see a slight increase before the fiscal year ends on March 31st.  Toyota just narrowly maintained its lead over global second-ranked General Motors during the 2010 calendar year, but the Japanese maker now anticipates selling 7.48 million vehicles worldwide for its current fiscal year, an increase of 70,000 over its earlier forecast.

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Though the third-quarter was a challenging one, a survey of industry analysts suggests the results were in line with, or slightly better than, most had forecast.  Net income dipped to 93.6 billion yen, or $1.14 billion at the current exchange rate.

A variety of factors can be pointed to for Toyota’s recent problems.  There are higher material costs.  The Japanese home market suffered a downturn due to the government’s cancellation of the green car incentive program.  And sales in North America took hits – despite the general recovery of the U.S. economy – due to the apparent impact of the maker’s ongoing safety problems.


Toyota Pays Another Record Fine For Late Recalls

Japanese maker settles probe – at cost of $32.4 million.

by on Dec.21, 2010

Toyota pays a record $32.4 million in fines to settle two federal probes of delayed recalls.

Toyota has agreed to pay a record $32.4 million in fines levied by federal regulators for admittedly delaying the recall of six million potentially unsafe vehicles.

The settlement of the two separate probes by the National Highway Traffic Safety Administration caps a disastrous year for a Japanese automaker once reputed to build some of the safest and most reliable vehicles on the road.  Since Toyota announced the first of two major efforts to resolve a so-called unintended acceleration problem, in late 2009, it has since recalled more than 11 million vehicles worldwide, most in the U.S.

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Toyota paid a previous $16.4 million fine, last April, for delaying the second of the two unintended acceleration recalls after learning about potentially sticky accelerator pedals.  At the time, that was the largest fine ever levied by the NHTSA.

The latest move involves payment of another $16.4 million for delaying the October 2009 recall for pedal entrapment – which can occur when loose carpets or floor mats trap the gas pedal and make it difficult to slow down.  The maker agreed to take action only after a widely-publicized crash that killed a California police officer and three members of his family.  Toyota has also agreed to pay $16 million for delaying the 2005 recall of 4Runner SUVs with defective steering rods that could lead to a loss of control.

Paying the $32.4 million in fines reflects Toyota CEO Akio Toyoda's promise to cooperate with U.S. regulators.

Officially, Toyota is not admitting guilt with the payment of the two new fines, and the company is attempting to put a positive, year-end spin on the moves, Steve St. Angelo, Toyota’s North American safety czar insisting, “These agreements are an opportunity to turn the page to an even more constructive relationship with NHTSA.”

St. Angelo’s post was created, earlier this year, after a bitterly confrontational series of hearings, on Capitol Hill, during which lawmakers grilled senior executives including Toyota CEO Akio Toyoda.  The grandson of the company founder promised to both improve relations with U.S. regulators and take steps to overcome Toyota’s worsening quality and safety issues.

Until the unintended acceleration issue captured the nation’s attention, in mid-2009, Toyota enjoyed what analysts like Joe Phillippi, of AutoTrends Consulting, described as a reputation for building “bulletproof” products.

But that image has been sorely tarnished over the last 15 months – despite evidence emerging in a federal probe of the unintended acceleration problem that at least some of the blame goes to driver error.

The problem, for Toyota, is that its safety problems have extended far beyond just runaway cars.  Just this month, the maker has announced the recall of nearly 100,000 Sienna minivans due to brake problems that could cause the loss of braking performance.  There have also been recalls for defective brakes on the newest Prius hybrid, as well as overheating of older versions of the Prius, a Toyota “halo” car; extensive corrosion of minivans and pickups that could cause parts, such as spare tires, to fall onto the highway; stalling problems with the Corolla and Vibe models; steering issues and a variety of other safety-related problems.

How American motorists are responding to Toyota’s sudden safety shock is unclear.  Some recent studies suggest the maker has gotten through the worst in turns of public perception.  But sales data is less upbeat.  For October and November, Toyota was the only major automotive brand to suffer a sales decline at a time when the overall industry was reporting its strongest performance in several years.

Earlier this year, Toyota Senior Vice President Don Esmond told that he expects the company’s existing customers to remain loyal to the brand, but that it will become “more difficult to conquest,” or win over buyers from the competition.

Conquest sales were a major factor in Toyota surging to the number two spot in the U.S. market.  In recent months, however, as its momentum has slowed, Toyota has again slipped behind Ford but remains the third-best-selling manufacturer in the country.

Whether the decision to pay the new record fines will actually help Toyota begin the process of repairing its reputation remains to be seen.  But the maker hopes it will smooth ruffled feathers in Washington.  In recent years, government regulators had tried to take a more cooperative approach with the industry, but Toyota bragged about taking advantage of that relationship.

Prior to last February’s Capitol Hill hearings internal documents leaked out showing the maker crowing about a 2007 recall for loose floor mats.  By convincing NHTSA not to order a larger recall, Toyota officials bragged, they saved $100 million.

“I expect Toyota to work cooperatively in the future to ensure consumers’ safety,” says Ray LaHood, Secretary of the U.S. Department of Transportation.

The new $32.4 million fines may be a record for the auto industry, but they’re miniscule compared to the estimates of what just the unintended acceleration issue could ultimately cost Toyota – more than $2 billion according to one forecast by Deutsche Bank.

There are hundreds of lawsuits now working their ways through the courts, including a massive class action in progress in California.  Meanwhile, the automaker is under the microscope as a federal grand jury in New York looks at possible criminal charges stemming from delayed recalls.