US and Toyota may reach settlement in probe: report

AP, TOKYO and DETROIT, Michigan

Thu, Mar 20, 2014 - Page 15

The US Department of Justice may reach a US$1 billion settlement with Toyota Motor Corp, ending a four-year criminal investigation into the Japanese automaker’s disclosure of safety problems, the Wall Street Journal reported.

Meanwhile, the top executive of General Motors Co (GM) apologized for deaths linked to the delayed recall of 1.6 million small cars, saying the company took too long to tell owners to bring the cars in for repairs.

Toyota declined comment yesterday on the report, which cited unnamed sources who said a settlement still could fall apart.

Toyota said it is cooperating with the US Attorney’s office.

The US Department of Justice was not immediately available for comment.

The investigation focuses on whether Toyota was forthright in reporting quality problems related to unintended acceleration troubles.

RECALLS

Starting in 2009, Toyota issued massive recalls, mostly in the US, totaling more than 10 million vehicles for various problems including faulty brakes, gas pedals and floor mats.

From 2010 through 2012, Toyota paid fines totaling more than US$66 million for delays in reporting unintended acceleration problems.

The US National Highway Traffic Safety Administration never found defects in electronics or software in Toyota cars, which had been targeted as a possible cause by many, including some experts.

The US justice department is now looking into whether GM was slow in recalling cars with a defect linked to 13 deaths.

REPUTATION

Faced with a crisis just months into the job, GM chief executive officer Mary Barra has put herself front and center in the company’s efforts to take responsibility for mishandling a defect with ignition switches in small cars, and to ward off a threat to its sales and reputation.

Barra, who is likely to testify next month before two US Congressional committees investigating the recall, on Tuesday named veteran company engineer Jeff Boyer as the firm’s new safety chief, placing a single person in charge of recalls and other safety issues.

Kelley Blue Book senior analyst Karl Brauer said the timing of one investigation possibly closing versus another opening was interesting.

“The cases are similar because they both involve a long, established history of vehicle incidents that took years to identify and address,” he said.

Toyota will likely be able to put the issue behind it by reaching a settlement, he said.

“GM is just getting started on its path to resolution and will probably be working to resolve the ignition switch recall for some time,” he said.