Toyota agrees to $1 billion settlement

Employees of Toyota Motor Corporation work during the assembly process at the company's Takaoka Plant in Japan.

The automaker Toyota has agreed to one of the largest settlements in automotive history. Pending court approval, the company will pay more than $1 billion to resolve a class-action lawsuit related to unintended acceleration.

In 2009 and 2010, unintended acceleration problems forced Toyota to recall more than eight million cars  in the U.S. alone.

“It really dragged the company through the mud,” says Hans Greimel with the Asia editor for Automotive News. “It really knocked the company which had its reputation built on sterling quality, it really had the reputation knocked off its pedestal.”

To address the problems, the automaker made changes to its floor mats and accelerator pedals.

The settlement opens the door for Toyota, Lexus and Scion owners to receive payments and safety updates. Overall, the agreement could cost as much as $1.4 billion.

Greimel says while that’s a lot of money, to Toyota, it’s more of a fender bender to the company’s bottom line. “It’s a big chunk of change, but if anybody can afford it and ride it out, it’s Toyota,” says Greimel.

Company sales in the U.S. this year are up nearly 30 percent.

Toyota still faces wrongful death and personal injury lawsuits, as well as an unfair business practice case brought by 28 states.

About the author

Dan Gorenstein is the senior reporter for Marketplace’s Health Desk. You can follow him on Twitter @dmgorenstein.

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