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Toyota payment could be glimpse into GM’s future

March 20, 2014 • Business


Attorney General Eric Holder announces a $1.2 billion settlement with Toyota over its disclosure of safety problems, Wednesday, March 19, 2014, during a news conference at the Justice Department in Washington. (AP Photo/Susan Walsh)

DETROIT (AP) — General Motors, beware.

Wednesday’s announcement that Toyota will pay $1.2 billion to avoid criminal prosecution for hiding information in a recall case could be a glimpse into your future. It’s also a warning to anyone selling cars in the U.S.: Although the federal government’s road-safety watchdog doesn’t have big fangs, the Justice Department does.

The National Highway Traffic Safety Administration’s maximum fine for hiding information is $35 million, a pittance to automakers. But the Justice Department can reach deeper into your wallet and hurt your reputation with damning public statements.

Shortly after the announcement, Attorney General Eric Holder issued an apparent warning to GM and other automakers, saying the Toyota deal was “not necessarily the only time we will use this approach.”

General Motors Co., which is facing a federal criminal probe over delays in recalling small cars with a deadly ignition switch problem, has many parallels to the Toyota case.

Toyota got into trouble for withholding information from NHTSA about floor mats that can trap gas pedals and make cars accelerate wildly, and for concealing a problem with sticky gas pedals that can cause unwanted acceleration. According to court records, the company recalled some models for the floor mats while knowing that others had the same problem.

At GM, the company has admitted knowing about the ignition-switch problem for more than a decade, yet it failed to recall 1.6 million small cars until last month. During the wait, at Login to read more

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