Toyota Motor Corp has decided to pay $1.2 billion to resolve a criminal probe towards safety issues, in a deal that could serve as a template for how U.S. authorities approach a similar investigation into General Motors Co.
The settlement between the Justice Department and Toyota includes an admission by the auto manufacturer that it misled American consumers about two different problems. This had caused the cars to accelerate even as drivers tried to slow them down.
General Motors (GM) also recalled more than 1.6 million vehicles more than a decade after first noticing the issue. Top officials said the Toyota settlement could serve as a template for similar cases.
"My hope and expectation is that this resolution will serve a model for how to approach future cases involving similarly situated companies," said Eric Holder, Attorney General.
The deal with Toyota was led by the US Attorney's office in Manhattan, the same prosecutors investigating GM's handling of its ignition-switch recall.
Mary Barra, GM Chief Executive has been credited for apologizing quickly for the slow recall and promising to focus on consumer safety, something Toyota failed to do initially when its unintended acceleration issue first arose.
Prosecutors filed criminal charges against the company but agreed to defer and drop them if the company allows an independent monitor to review its safety practices and if it abides by the terms of the deal. Toyota said it would take a $1.2 billion after-tax charge for the settlement in the fiscal year ending March 31.
