GM should know now what's ahead after Toyota's $1.2B fine

|About: Toyota Motor Corporation (TM)|By:, SA News Editor

The parallels are striking in the handling of vehicle defects by Toyota (TM) and GM, and TM’s $1.2B settlement establishes a template for GM to potentially resolve its own issues.

U.S. Attorney General Eric Holder made it clear in a statement that “other car companies should not repeat Toyota’s mistake; a recall may damage a company’s reputation, but deceiving your customers makes that damage far more lasting.”

The use of the wire fraud statute in nailing Toyota means any GM statements regarding ignition switch problems that were less than truthful can be the basis for a criminal charge.

GM is still in the early stages of its internal investigation, which will take months to complete, but it now knows what it is likely to face: a hefty financial penalty and an outside monitor in exchange for avoiding a criminal conviction.