Unintended Acceleration Case to Cost Toyota $1.1 Billion

by Nate Wooley | December 27, 2012 8:26 am

Unintended Acceleration Case to Cost Toyota $1.1 Billion

toyota Unintended Acceleration Case to Cost Toyota $1.1 Billion[1]Automaker Toyota (NYSE:TM[2]) has agreed to settle a class action lawsuit for $1.1 billion.

The suit was filed in 2010 and centered on cases of sudden and unintended acceleration in more than 30 of Toyota’s models, Reuters reports[3]. In all, more than 16 million vehicles, including those from the Toyota, Lexus and Scion makes, manufactured between 1998 and 2010 are part of the deal.

The automaker is admitting no fault in the settlement. Toyota’s American general counsel, Christopher Reynolds, said in a statement, “This was a difficult decision, especially since reliable scientific evidence and multiple independent evaluations have confirmed the safety of Toyota’s electronic throttle control systems.”

While the lawsuit fixes responsibility for the unintended acceleration on the electronic throttle systems used by Toyota, the company has assigned blame to issues with the floor mats in the autos. A study by the National Highway Traffic Safety Administration and NASA found no connection between the acceleration incidents and the electronic throttle systems.

The settlement covers vehicle owners for losses related to the safety issue. It does not cover any wrongful death or personal injury lawsuits that have been filed. While Toyota says it will take a one-time charge of $1.1 billion to its October-Dececember 2012 quarter, the firm that filed the suit, Hagens Berman, says the final settlement will be valued at between $1.2 billion and $1.4 billion dollars.

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Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2011/07/toyota.jpg
  2. TM: http://studio-5.financialcontent.com/investplace/quote?Symbol=TM
  3. Reuters reports: http://www.reuters.com/article/2012/12/27/us-usa-toyota-settlement-idUSBRE8BP0G620121227
  4. Toyota Hit With Record $17.4M Fine for Safety Recall Delays: http://investorplace.com/2012/12/toyota-hit-with-record-17-4m-fine-for-safety-recall-delays/
  5. BMW Recalls SUVs Over Steering Defect: http://investorplace.com/2012/12/bmw-recalls-suvs-over-steering-defect/
  6. Engine Fire Risk Prompts Ford Fusion, Escape Recall: http://investorplace.com/2012/12/engine-fire-risk-prompts-ford-fusion-escape-recall/

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