Toyota (TM) Settles Unintended Acceleration Class Action Suit, Will Take $1.1B Charge
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Toyota (NYSE: TM) is looking at some stiff fines as it hopes to settle unintended acceleration claims.
The WSJ is reporting this afternoon that Toyota might pay up to $1.1 billion in an effort to install new safety equipment and reimburse orders of about 16 million affected vehicles.
Toyota will take a $1.1 billion pre-tax settlement in the third quarter, according to a filing made with a federal court in California. The settlement will involve no admission of fault by Toyota.
Up until now, the costs associated with recalls and probes from the 2009 - 10 event totaled about $3.1 billion. Additionally, some estimates have Toyota losing about $2 billion in sales from bad PR tied to the recalls.
The breakdown of payments is such
Toyota ended the session down 0.9 percent today.
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The WSJ is reporting this afternoon that Toyota might pay up to $1.1 billion in an effort to install new safety equipment and reimburse orders of about 16 million affected vehicles.
Toyota will take a $1.1 billion pre-tax settlement in the third quarter, according to a filing made with a federal court in California. The settlement will involve no admission of fault by Toyota.
Up until now, the costs associated with recalls and probes from the 2009 - 10 event totaled about $3.1 billion. Additionally, some estimates have Toyota losing about $2 billion in sales from bad PR tied to the recalls.
The breakdown of payments is such
- $250 million to owners who sold/turned-in vehicles by September 1, 2009, and December 31, 2010, for lost value;
- $250 million to those whose vehicles cannot be updated for brake-override systems;
- Between $200 million and $400 million to install brake override systems;
- $400 million for extending warranties; and
- $200 million in attorneys' fees.
Toyota ended the session down 0.9 percent today.
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