December 26, 2012
Toyota (NYSE: TM ) has agreed to pay $1.1 billion in reimbursements, compensation, and other costs to settle a class action lawsuit, the company said in a press release. The case, which is being heard in a federal court in California, stems from a series of vehicle recalls in 2009 and 2010 due to the possibility of unintended acceleration.
As part of the settlement, Toyota will pay cash compensation to eligible car owners, sponsor driver education programs, and contribute to new advanced safety technology research initiatives.
The settlement will cover the owners of up to 16 million cars. Toyota said it will book the entire amount as a one-time charge.
The press release quoted Toyota Motor Sales' U.S.A. group vice president, Christopher Reynolds, as saying that "this was a difficult decision -- especially since reliable scientific evidence and multiple independent evaluations have confirmed the safety of Toyota's electronic throttle control systems. However, we concluded that turning the page on this legacy legal issue through the positive steps we are taking is in the best interests of the company, our employees, our dealers and, most of all, our customers."
More Expert Advice from The Motley Fool
Toyota has rebounded nicely from the troubles of recent years, but is the stock still a buy at current prices? The Motley Fools automotive expert John Rosevear and Industrials Bureau Chief Isaac Pino have collaborated to create some of the most in-depth Toyota research available
for smart investors like you. Thousands have already claimed their own premium ticker coverage, and you can gain instant access to your own by clicking here now