Tuesday, April 6, 2010

Toyota, Boston Scientific pay for their greed

You had to know this was coming, the feds handed down a 16 million dollar fine. Transportation Sec Ray LaHood is quoted in the Globe, "We now have proof that Toyota failed to live up to its legal obligations". While the fine seems large, Toyota is a multi hundred billion dollar company. The evidence released to the media was convincing and a no brainier, they covered up what they knew and when, and felt smug about it.

Toyota is considering a challenge to this ruling. If the ruling stands, there are 100 or so class action suites ready to go.

In the largest criminal penalty ever paid by a medical device company, Boston Scientific s Guidant LLC Division, will pay 296 million dollars for violating two federal misdemeanor counts alleging it failed to properly disclose changes made to some implantable heart devices.

A long story short, a judge will either adopt this plea agreement, add to it or change it in some way. The bottom line is, the company will pay for it's greed and has already settled all the civil suits which probably is millions more.

And nothing more highlights that attitude of greed and self intlement, than the newly appointed CEO of Boston Scientific, whos comapasation for 2009 was 33.5 million dollars. The WSJ found that only two large comapny CEOs will make more than Ray Elliot form Boston Scientific.

In comparison, CEO William Swanson from Raytheon was paid 18.6 million, down from 2008 pay of 20.5 million.

All this while 9,200 Mass residents lost their EU pay check this week and if the Senate can't find their way to extend, next week and the week after, 10,000 more may be without a pay check. Our newest member of the Senate and his colleagues are asking where the money will come from. What in the world are they thinking? This fragile state economy will suffer huge looses if they don't fund these extensions. Using left over TARP money is better than doing nothing at all. Funding country rebuilding should start at home first, then the outside world.

12 Comments:

At April 6, 2010 at 5:10 PM , Blogger Eric said...

Am I reading this right, 296 million find for BSC and only 16 million for Toyota. Does anyone else see that as a bit off kilter? I would be interested to know how much money Toyota made on TOyota's they sold from the day they knew there was a problem, and how much money BSC made on there faulty item from the time they knew there was an issue. Add to this the fact that BSC is an American company, right? Something just does not seem right here.

 
At April 8, 2010 at 11:08 AM , Blogger Abra said...

I read somewhere that some guy has been in jail for vehicle homocide even though he said his car took off not stepping on the gas and that caused the guy to kill someone but no one believed him. But now they do. So does he get out of jail now? And does Toyota have to pay him for leaving him in jail when they knew they had bad cars on the road?

 
At April 8, 2010 at 11:33 AM , Blogger Derek said...

I have a thought. Why don’t the up the fines to both of these bastards and then use that money to fund the unemployment program that is hung up in Congress now. My last check is today. How the hell I am going to survive without even that money coming in? Create a job that I can work at and earn a livable wage, or extend my UE check. Shutting me down leaves me with no income at all. How do I take care of my wife and kids then?

 
At April 8, 2010 at 12:12 PM , Blogger 6th Middlesex constituent said...

Do people still get to sue Toyota individually if they had a problem with the car or is this the only fine these guys get?

 
At April 8, 2010 at 4:08 PM , Anonymous Anonymous said...

Your take on this Jim? Fair, too much, too little?

 
At April 8, 2010 at 4:21 PM , Blogger Jim Pillsbury said...

They put to death the scoundrels who tainted the milk over there this year. Not saying, anyone should be put down for this, but those e mails are a tip of the iceberg. The NTSB is also in the mix. Lets see if that comes out in the trials later this year. My guess, the class action suites against Toyota, now that we have read there own e mails, will be 100 million. Still... a drop in the bucket for Toyota.

Look for a head or two from the NTSB to roll and sweeping changes in how they (NTSB) handle customer complaints and recalls. I would also guess, a good defense lawyer could get any Toyota driver off of any charges related to accidents. Hell, they found OJ not guilty.

 
At April 8, 2010 at 4:23 PM , Blogger Jim Pillsbury said...

Hang in there Derek... they will not stop eu bennies.... there would be riots in the streets and they know it.

 
At April 8, 2010 at 4:31 PM , Blogger Anderson said...

They made way more money selling cars from the time then knew there was a problem until the time they admitted it than this fine is. This sends a message to manufacturers that it is better for the bottom line to lie to your customers and take the punishment if and when you get caught than it is to be honest. Unless we change that mind set, these things will continue to happen. The fine should be at least 25% more than the income on the defective product was for the time period involved. That would maybe motivate these manufacturers to be honest and ethical. What happened here to Toyota motivates them to be dishonest and hide and lie about issues, even issues that can kill their customers.

 
At April 8, 2010 at 4:35 PM , Blogger Friend said...

I think even more information about when Toyota knew about this has come out since they got fined. Can the fine them more? Do you know if any people died because of this issue?

 
At April 8, 2010 at 4:51 PM , Blogger Jim Pillsbury said...

Friend.. I think there have been 9 deaths. I'm not sure if the feds could levy any more fines, but they certainly could make Toyota's life difficult here in the states to sell more cars. And don't forget, this is a global problem for Toyota, other countries are in the mix somehow. Lets see what they do. Look for all other car companies to pick up a share of Toyota's lose. Good for US companies even.

 
At April 8, 2010 at 5:05 PM , Blogger Interested reader said...

9 people dead, 16 million fine, so about 1.7 million for each dead body. How many cars do they sell to make 1.7 million dollars? So how long did it take them to pay for those deaths? I am guessing less than a month. Pretty short sentence for 9 murders, don't you think?

 
At April 10, 2010 at 1:46 PM , Blogger Jim Pillsbury said...

Man I was way off on the Toyota law suits. The media is now reporting that the largest ever liability suite could be 3 BILLION dollars.

 

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