The Associated Press

Two people were killed and two injured in a November 2010 crash of a Toyota Camry on Interstate 80 in Utah in which an accelerator problem was suspected.

Editorial: Carmakers will pay a high price for hiding safety flaws

Published: Friday, Mar. 21, 2014 - 12:00 am

The $1.2 billion penalty against Toyota is the largest ever imposed on an automaker, but it’s not overkill. The punishment fits the crime.

In the settlement announced Wednesday, the world’s largest car manufacturer confessed to misleading consumers and deceiving regulators for years about deadly safety defects that caused vehicles to suddenly accelerate.

This is a landmark and welcome action by the U.S. Justice Department, forcing Toyota to settle criminal charges with a fine that is 35 times higher than civil penalties that can be levied by the National Highway Traffic Safety Administration. In 2010 and 2012, Toyota paid maximum fines totaling $50 million for failing to report the accelerator defect on time. For a multibillion-dollar car company, that’s merely a cost of doing business.

There needed to be a higher price for wrongdoing this egregious. It was not just an “unfortunate chapter,” as Toyota Motor North America’s chief legal officer called it.

As far back as 2007, the automaker knew that its gas pedals could get stuck under floor mats and had design flaws that could cause wild acceleration. But it resisted recalls, downplayed the dangers and continued selling cars with the problem parts. Internal emails show that saving money was a prime motive.

It took until January 2010 for Toyota to fully recall millions of vehicles to fix the defects. During that delay, people died – among them an off-duty California Highway Patrol officer and three family members killed in a horrific, high-profile crash in San Diego County in August 2009. While Toyota claims there have been only five documented deaths connected to the problems, the Center for Auto Safety says there have been hundreds of fatalities.

Without persistent reporting, notably by the Los Angeles Times, and hundreds of lawsuits filed by victims’ families, who knows how long Toyota would have tried to minimize the risk.

“Toyota confronted a public safety emergency as if it were a simple public relations problem,” said Attorney General Eric Holder, who said the company’s “shameful” conduct “protected its brand ahead of its own consumers.”

Holder also fired a warning shot at other automakers. It’s apparent that the Justice Department has General Motors Co. in its sights.

General Motors has admitted knowing about an ignition-switch problem for at least 11 years, but didn’t recall 1.6 million small cars until last month. During the wait, at least a dozen people died in crashes when the faulty switches disabled power steering and brakes.

This week, new GM CEO Mary Barra told employees that the company is reforming its safety efforts, named a new global safety chief and, in a rare mea culpa, publicly apologized for the deaths. “I am very sorry for the loss of life that occurred, and we will take every step to make sure this never happens again,” she said.

While she deserves credit for coming clean, Barra is recognizing a business reality: While automakers can afford to pay these huge penalties, the damage to consumer trust is even more costly and will take far longer to repair.

Read more articles by the Editorial Board

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