December 21, 2024

Toyota Settles Lawsuit Over Accelerator Recalls’ Impact

The agreement, filed in federal court in California, was called one of the largest product-liability settlements in history.

If the agreement is approved by the court, Toyota would compensate current and former owners for loss of value on vehicles recalled because of faulty floor mats and other conditions that could cause sudden acceleration.

Toyota has also agreed to install special safety systems on 3.2 million vehicles that were recalled for floor-mat problems.

The class-action suit was filed in 2010 after widespread complaints were made to federal safety regulators about Toyota models that accelerated unexpectedly.

Toyota has since recalled about eight million vehicles in the United States for problems relating to floor mats and sticky accelerator pedals.

After a long investigation, the National Highway Traffic Safety Administration said there was no evidence that electronic systems contributed to unintended acceleration in Toyota vehicles.

The law firm representing Toyota owners in the class-action suit said the overall settlement was estimated at $1.2 billion to $1.4 billion.

“We are extraordinarily proud of how we were able to represent the interests of Toyota owners, and believe this settlement is both comprehensive in its scope and fair in compensation,” said Steve Berman, one of the lead lawyers for the plaintiffs.

Toyota said in a statement that it would compensate customers for loss of value of their vehicles, as well as retrofit additional cars with a free safety system that prevents unintended acceleration.

The company said it will take a onetime, $1.1 billion charge against earnings to cover the costs of the settlement and possible resolution of other pending litigation.

“This agreement marks a significant step forward for our company,” said Christopher Reynolds, Toyota’s chief United States legal officer. “In keeping with our core principles, we have structured this agreement in ways that work to put our customers first.”

Article source: http://www.nytimes.com/2012/12/27/business/toyota-settles-lawsuit-over-accelerator-recalls-impact.html?partner=rss&emc=rss

G.M. to Reinforce Battery in Chevrolet Volt, a Hybrid

Company officials said they had shared their plans with the federal safety regulators who had been investigating the fire risks of the Volt, an electricity and gas-powered hybrid, since November and were “optimistic” the action would satisfy the government’s concerns.

The National Highway Traffic Safety Administration, in a statement posted on its Web site, said the changes “should address the issue,” though its investigation remained open.

G.M. described the modifications as voluntary “enhancements” and stressed that neither the car nor the battery was being recalled, but that all Volt owners would be asked to take the car to a dealership, much as they would for a formal recall.

“We are choosing to go the extra mile to ensure our customers’ peace of mind,” Mary Barra, G.M.’s senior vice president for global product development, said in a conference call. Ms. Barra said the changes would make the car “even safer, because the Volt is safe.”

In June, a Volt caught fire three weeks after a government crash test damaged the car’s battery and cooling system, and further testing in November resulted in a second fire that prompted the investigation.

On Thursday, G.M. said four crash tests of Volts with the reinforced steel and upgraded cooling system were successful, with no intrusion to the battery and no coolant leakage.

The safety agency said that on Dec. 22 it subjected a modified Volt to the same test that led to the original fire, with no signs of the damage that is thought to have been the cause.

“The results of that crash test showed no intrusion into the vehicle’s battery compartment, and no coolant leakage was apparent,” the agency said in the statement. “The preliminary results of the crash test indicate the remedy proposed by General Motors today should address the issue of battery intrusion.”

The agency said it was continuing to monitor that car but expected to conclude its investigation in the coming weeks. It said testing had indicated that there was no fire risk if the battery pack was not damaged or had no coolant leaks.

G.M. is adding a piece of steel to protect the battery more during a side-impact crash. Unlike batteries in the Nissan Leaf and new Ford Focus electric cars, the Volt’s battery is not entirely encased in steel.

The Volt’s battery-coolant reservoir also will get a sensor to monitor the level of fluid and a tamper-resistant bracket to help prevent overfilling.

G.M. said the June fire occurred after more than four cups of coolant leaked onto a printed circuit board when the crash test simulated a rollover, and later crystallized.

Protecting the battery-coolant systems on electric cars — nearly all models being sold or developed use a liquid to regulate the battery’s temperature, except the Nissan Leaf — poses a new challenge for automakers. Fisker Automotive, which is based in California, recalled about 300 of its Karma electric cars last month because the battery maker, A123 Systems, had incorrectly installed a $1 clamp, creating the potential for a leak and consequently a fire. (Fisker already has replaced the battery packs in the cars, only 50 of which had been sold to customers.)

G.M. has sold about 8,000 Volts since the car, a plug-in hybrid that travels about 35 miles on battery power before using a gasoline engine for additional range, was introduced in late 2010.

Ms. Barra said that dealerships could begin making modifications to existing Volts beginning next month and that all Volts produced from now on would include the changes. Dealers will modify the Volts they have in stock but do not necessarily have to do so before selling them, so sales of the car will not be halted.

By acting before the safety agency closes its investigation, G.M. is able to avoid marring the Volt with a recall, at least for now. Automakers often act voluntarily to recall vehicles to minimize negative publicity after a defect is discovered, but in this case no one has determined that a defect officially exists.

Mark Reuss, the president of G.M.’s North American operations, declined to say how much the modifications would cost. Because the Volt is a small-volume car, making the changes will undoubtedly cost the company far less than a typical recall.

Nothing about the Volt’s 400-pound battery pack itself, which G.M. assembles at a factory near Detroit using lithium-ion cells from South Korea, will be altered.

“We’re as confident as ever that the cell design is among the safest on the market,” Ms. Barra said.

December was the best sales month so far for the Volt, which outsold its chief rival, the all-electric Nissan Leaf, for a third consecutive month. G.M. sold 1,529 Volts in December, for a 2011 total of 7,671. G.M. already had acknowledged it would miss its goal of 10,000 Volts for the year after low inventories slowed sales in earlier months, but it has said it hoped to sell about 45,000 of the cars in the United States this year.

“There has been some uncertainty in the market,” Alan Batey, Chevrolet’s vice president for sales, said Wednesday, when asked whether the investigation had raised concerns among would-be buyers. “We do believe that uncertainty will go away.”

Article source: http://feeds.nytimes.com/click.phdo?i=6d15058e420b51b07e470bf1b7bc04bc