Toyota’s settlement with the U.S. Dept of Justice

The FBI found that Toyota knowingly and willingly lied to the government and the public about the defects in its runaway cars that killed and injured people. This kind of lying is illegal under the US “TREAD Act.”

Toyota was charged with one count of “wire fraud,” intentionally making money by lying to the public.

The settlement agreement is a “deferred prosecution” against the company but not against the executives. It means that prosecution will not take place if Toyota is totally honest for three years. If the government finds more lying, the crime will be prosecuted.

The agreement has some bad points and has some good points

The bad points:

1.      It covers Toyota’s lies that were already known.

2.      No one will go to jail even though there are a number of documented deaths and catastrophic injuries as a result of specific conduct of individual executives.

3.      The settlement covers only two causes of unintended acceleration – floor mats and sticky pedal. Of all runaway cars, these causes are only around 30%. Electronics account for the rest, but the government cannot prove that yet.  Plaintiffs experts have proved it pretty well.

4.      The settlement does not help people with defective cars to get them fixed

5.      The settlement’s impact on Toyota outside of the U.S. is unclear

6.      There are some loopholes in the demands on Toyota

The good points:

1.      It has to wire $1.2 billion to the US government by Tuesday!

2.      There will be a watchdog – an “Independent Monitor” for 3 years to watch Toyota’s honesty

3.      Employees can report anonymously to the monitor, who will report to the department of justice.

4.      This monitor arrangement can force Toyota to be honest about its electronics, and may lead to more criminal charges if they hide anything.

Takeaway for the public:

5.      The story is not over, car electronics are not regulated and not only Toyota but other companies like Ford, Mitsubishi, KIA, and Honda also have documented problems with runaway cars

6.      We must remain vigilant when buying cars to search out automakers with excellent safety engineering. In general, Europeans are ahead of the Americans and Asians on this, but it depends on the individual automaker.

7.      In Israel we should demand more auto electronics safety laws based on recognition that the safety is not  adequately regulated in the U.S. Our police should be better trained to find when the car is at fault.

8.      Be prepared, be aware, shift to neutral, use parking brake.