Car manufacturing giant Toyota today announced a major stock buyback of almost 2 percent of its stock worth an estimated $3.5 billion, this comes right after is was disclosed some of its vehicles suffer from severe defects.
Toyota was not the only automaker to find itself in hot water, GM has also been called negligent over ignoring problems with its ignition systems.
Within a week of one another both GM and Toyota found the glare of this shameful spotlight shinning on them as both auto makers may have knowingly ignored dangerous issues with specific car models until the problems began costing drivers their lives.
In Toyota's case, the issue involved unintentional acceleration of its vehicles, a problem the car-makers were aware existed back in 2009. In a well-publicized case filed that year, a family of four died in crash due to a stuck accelerator. Toyota recently agreed to pay $1.2 billion for criminal charges after admitting to deceiving regulators about the accelerator issues
For GM the issue involved a faulty ignition switch problem that the company later admitted led to at least 12 deaths and 31 frontal crashes. It was discovered that GM was aware these ignition issues existed as far back as 2004.
Both of these major car manufacturers begin dealing with these fines and future lawsuits, the focus now shifts to the outrage and accountability for the auto industry.
"Toyota put sales over safety, and profit over principle," George Venizelos, assistant director of the FBI said. "The disregard Toyota had for the safety of the public was outrageous. Not only did Toyota fail to recall cars with problem parts, they continued to manufacture new cars with the same parts they knew were deadly."
GM hasn't escaped unscathed either as the company was forced to recall close to 1.4 million vehicles in the U.S. and a federal probe is currently underway.
With Toyota's agreement to pay the aforementioned record amount for criminal charges and GM's offer of a $500 cash allowance on the purchase or lease a new GM vehicle (with the likelihood of stiff fines forthcoming), consumers can only hope the focus now shifts to safety and continued accountability for car manufacturers when it comes to recall issues. The message from both of these tragedies should be clear - don't mislead regulators.
Calling Toyota's behavior "shameful" U.S. Attorney General Eric Holder added, "It showed a blatant disregard for systems and laws designed to look after the safety of consumers," he said. "By the company's own admission, it protected its brand ahead of its own customers."
For two car safety cases to happen back-to-back, that both brought forth car manufacturers complete disregard for public safety, the hope now is that the heat is on to make sure these cases stand alone for quite some time.
