$3.4 billion (£2.6 billion) settlement agreement for Toyota’s rusty truck frames

On the 26^th April a federal judge signed off on a $3.4 billion (£2.6 billion) deal to settle a massive action against Toyota. The settlement agreement was pushed forward by the vehicle owners’ lawyers who were led by Blood Hurst & O’Readon LLP and Barnow and Associates PC.

The federal judge approved of the settlement agreement to resolve claims of dangerous rust-prone truck frames. The judge didn’t adjust the settlement offer or the fee request, and at a separate hearing in Los Angeles, U.S. District Judge Fernando Olgiun said he would approve the lawyers’ fees and the final approval of the settlement.

The settlement also includes Toyota’s agreement to provide inspections for the 1.5 million 2005-2010 Tacoma, 2007-2008 Tundra and 2005-2008 Sequoia trucks which are thought to be affected by the defect and provide a replacement frame for 225,000 affected trucks.

Toyota’s statement

The Japanese company seems relieved by the agreement as they stated:

“…we believe this agreement provides significant value to our customers and demonstrates that they can count on Toyota to stand behind its vehicles.”

Maybe Volkswagen should take a page out of Toyota’s book?

Which vehicles are affected?

The lawsuit was filed back in March 2015 by owners from nine U.S. states including New York, California, and Florida. Vehicle owners claimed that the frames lacked adequate rustproofing which allowed the frames to rust to a point where the strength of the frame was compromised. Vehicle owners provided photos of rust-damaged frames which showed severe corrosion of the frame rails and the high-stress area where the rear suspension leaf springs mount to the frame.

One of the reasons for why the lawsuit was launched was due to the fact that the frames of the trucks were reportedly not adequately protected from corrosion, and many owners claimed that Toyota knew about it but didn’t do anything about it.

Replacing the severely corroded frames won’t come cheap for Toyota, and the frames come in a variety of sizes and models. By way of an example, the Tacoma model frame has 11 versions, and the price of the frame ranges from $4,338 to $4,889 (£3,335 to £3,785). However, as it’s apparently a labour-intensive job, the bill could total to more than $15,000 (£11,600) per vehicle.

The above valuations were quoted by a Toyota dealer who has been replacing frames for years.

Customers covered

However, Toyota protests that they did help some of the truck owners previously e.g. making warranty extensions and recalls. The help wasn’t around for long as the actions only covered some of the trucks. One service campaign only covered Tacoma trucks owned by residents in cold-weather states such as Illinois, Massachusetts and Pennsylvania.

The inspection and replacement campaign could also last 12 years from the date the vehicle was sold or leased. This means that any problems with rusting/corrosion should be covered, and the warranty remains valid even if the vehicle is sold onto a different owner.

Image Source:
https://nhoilundercoating.com/toyota-recall-for-rust-issue/