Toyota speeds to a billion dollar loss
Toyota Motor Corp. said Wednesday it has reached a settlement worth more than $1 billion in a case involving unintended acceleration problems in its vehicles.
The company said the deal will resolve hundreds of lawsuits from Toyota owners who said the value of their cars and trucks plummeted after a series of recalls stemming from claims that Toyota vehicles accelerated unintentionally.
Steve Berman, a lawyer representing Toyota owners, said the settlement is the largest in U.S. history involving automobile defects.
"We kept fighting and fighting and we secured what we think was a good settlement given the risks of this litigation," Berman told The Associated Press.
The proposed deal was filed Wednesday and must receive the approval of U.S. District Judge James Selna, who was expected to review the settlement Friday.
Toyota said it will take a one-time, $1.1 billion pre-tax charge against earnings to cover the estimated costs of the settlement. Berman said the total value of the deal is between $1.2 billion and $1.4 billion.
Hundreds of lawsuits have been filed against Toyota since 2009, when the Japanese automaker started receiving numerous complaints that its cars accelerated on their own, causing crashes, injuries and even deaths.
The cases were consolidated in U.S. District Court in Santa Ana and divided into two categories: economic loss and wrongful death. Claims by people who seek compensation for injury and death due to sudden acceleration are not part of the settlement; the first trial involving those suits is scheduled for February.
As part of the economic loss settlement, Toyota will offer cash payments from a pool of about $250 million to eligible customers who sold vehicles or turned in leased vehicles between September 2009 and December 2010.
The company also will launch a $250 million program for 16 million current owners to provide supplemental warranty coverage for certain vehicle components, and it will retrofit about 3.2 million vehicles with a brake override system. An override system is designed to ensure a car will stop when the brakes are applied, even if the accelerator pedal is depressed.
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