Monday, March 24, 2014

Justice Department Holds Up Toyota Shareholders for $2 Billion

In 2012, we wrote an entry "Class Action Lawyers Stick Up Toyota for $1.1 Billion."  With the announcement that another billion dollar settlement with the Federal government was in the offing about alleged problems with disclosures to government inquiries, the episode has cost the company well over $2 billion.

The problem is the same as it was in 2012.  The NTSA and NASA studies into the sudden acceleration problem, beyond the acknowledged intermittent issues of pedal entrapment or the pedal sticking, could not be duplicated by the best technical investigative agencies we have.

Most of the first billion dollars went to attorney fees and to research on automobile safety.  It would be nice to know what politically favored organizations are doing that research and what they're coming up with.

The 2011 reports are still available on the NTSA website.

Toyota has paid out billions, suffered economic damage to its reputation, and lost sales for not being forthcoming, or as the WSJ writes about today for bad paperwork.

Toyota, like big banks and other big corporations, knew that it was better to transfer wealth from Toyota shareholders to the supreme beings at the Justice Department than to soldier on about facts, which are irrelevant when corporations are involved.

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