Toyota to settle speed-off claims

— Toyota Motor Corp. said Wednesday that it will take a $1.1 billion write-down to settle claims that its cars and light trucks lost value because of the automaker’s recalls for unintended acceleration-related issues.

Under the settlement agreement, filed Wednesday in the U.S. District Court in Santa Ana, Calif., Toyota will begin a customer-support program providing coverage for certain vehicle components.

The company also said it will retrofit additional nonhybrid vehicle models subject to a floor-mat recall with a free brake-override system, according to an emailed statement from the company. The floor mats on some models slipped out of position and could interfere with the operation of foot pedals.

Asia’s largest automaker will also offer cash payments to eligible customers who sold or turned in their leased vehicles in 2009 or 2010, according to the statement. Toyota, based in Toyota City, Japan, will take a one-time, $1.1 billion pre-tax charge against earnings to cover the estimated costs of the settlement, according to the statement.

Plaintiffs’ lawyers said the accord is valued at $1.2 billion to $1.4 billion, according to a separate statement Wednesday. One of them, Steve Berman, said the settlement is the largest settlement 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.

Toyota has recalled more than 14 million vehicles worldwide due to acceleration problems in several models and brake defects with the Prius hybrid. Toyota has blamed driver error, faulty floor mats and sticky accelerator pedals for the unintended acceleration.

Christopher P. Reynolds, vice president and general counsel for Toyota’s U.S. sales arm, said in an e-mailed statement that, “This agreement marks a significant step forward for our company, one that will enable us to put more of our energy, time and resources into Toyota’s central focus: making the best vehicles we can for our customers and doing everything we can to meet their needs.”

The accord, pending approval of the judge in the case,settles the economic-loss portion of the Toyota sudden-acceleration lawsuits.

Lawsuits claiming personal injuries and deaths caused by such incidents remain pending, with the first federal trial set for February in Santa Ana.

The case in the settlement was filed in 2010 after drivers across the country began reporting that Toyota vehicles suddenly and unintentionally accelerated, according to the statement from plaintiffs’ lawyers.

They said the brake override system will be installed in an estimated 3.25 million vehicles. The device allows the application of the brakes to overide the effect of the position of the accelerator pedal.

The case is In re Toyota Motor Corp. Unintended Acceleration Marketing, Sales Practices and Products Liability Litigation, 8:10-ml-02151, U.S. District Court, Central District of California (Santa Ana).

Information for this article was contributed by Greg Risling of The Associated Press.

Business, Pages 21 on 12/27/2012

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