Thursday, May 19, 2011

Toyota No. 1 in Recalls


Toyota car owners had argued that they suffered economic losses because Toyota didn't disclose or fix defects that made their cars accelerate suddenly. US District Judge James Selna issued a final order on May 13, that in the US, these car owners can pursue claims that the carmaker caused the value of their vehicle to fall. Selna had already issued a similar ruling in November 2010 that rejected Toyota’s motion to dismiss an earlier complaint by the vehicle owners. He had said then that "a vehicle with a defect is worth less than one without a defect."

Toyota insisted ‘that no defect exists in its electronic throttle control system," spokesperson Celeste Migliore said in a statement. "The burden is now squarely on plaintiffs' counsel to prove their allegations and Toyota is confident that no such proof exists."

However, the representative for the car owners said there was a rationale for the claims. "Judge Selna agreed with our contention that Toyota owners who did not attempt to sell their vehicle could still bring a claim because they overpaid for their vehicles, buying cars that were not worth as much as a car free of these defects," said Steve Berman, co-lead counsel for many of the plaintiffs.

Toyota started recalling cars after claims of defects and incidents involving sudden unintended acceleration. In September 2009, the company began recalling 3.8 million vehicles that it said had a defect that might cause floor mats to press the accelerator pedal. Following that, in January 2010 another 2.3 million cars were recalled due to sticking accelerator pedals. Finally, another 2.17 million vehicles were recalled in the US, again for carpet and floor mat issues that could cause jams in the accelerator pedal (Webpage
http://www.bbc.co.uk/news/business-13420798, posted May 17, 2011). Since the recalls, Toyota faced a never-ending wave of litigation and the company better have deep pockets to settle the lawsuits!

There were other recalls too involving the airbag sensor assembly, the fuel pressure sensor installation, the stop lamp (brake light) switch bracket, and other potential defects (Check out webpage
http://www.toyotarecall.org/). It is sad that Toyota had compromised quality in their pursuit to be No. 1.

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