Episode 356 – Toyota Faces $40B in Lawsuits, Daimler & Renault to Tango, White House Goes Electric

March 25th, 2010 at 12:08pm

Runtime 6:54

Class action lawsuits could end up costing Toyota $40 Billion. Daimler and Renault look to develop vehicles and components in a partnership. The Obama administration holds a meeting on electric vehicles and the cooperation of utilities at the White House. All that and more, plus John answers your comments and questions in today’s “You Said It!”

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Transcript and Story Links after the jump . . .

Here are today’s top headlines. Toyota faces $40 billion in lawsuits. Daimler and Renault decide to dance together. And a big meeting about EVs takes place in the White House today.

Up next, we’ll be back with the news behind the headlines.

This is Autoline Daily for Thursday, March 25, 2010. And now, the news.

In a courtroom in California today, a federal judge will determine if class action lawsuits can be filed against Toyota. These lawsuits are for owners who seek compensation because the resale value of their Toyotas have gone down due to all the negative publicity against the company. They are also filing racketeering charges against Toyota, saying it knowingly sold defective products. The AFP reports this could become the largest legal action ever taken against a car company. It cites Tim Howard, a law professor from Northwestern University, who is leading the class action lawsuits, as saying this could cost Toyota $40 billion.

Not only that, now Bloomberg reports that an opinion poll shows American consumers are turning against Toyota. Four out of ten now say they would never buy a Toyota. In fact, the company was viewed favorably by fewer than half of consumers, only 49%. GM is viewed favorably by 57%, Honda by 70% and Ford topped the poll, getting a favorable rating by 77% of consumers.

Ford may be popular with consumers, but it’s told its shareholders they’re not going to get any dividends anytime soon. Ford’s CFO Lewis Booth says the company needs to conserve cash, so it’s not going to pay out any dividends for now. Of course, the company’s stock has been going up so much that most shareholders will not complain…for now.

And Ford has figure out a way to preserve some of that precious cash. Using a program called PC Power Management, the company is now controlling the power settings on company laptops and desktop computers from a central location. It can shut them down when not being used, and load in updates during non-working hours. Ford says this will boost productivity and save over a million dollars a year when its fully implemented.

Earlier this week we reported that Honda avoids partnerships with other automakers because it says they lead to inefficiency. But apparently Daimler and Renault don’t see it that way. According to the AFP, the two are close to a deal where each would own 3% of the other’s stock. They want to develop a small car platform together and share components for light trucks and electric cars. The deal is likely to be announced next month.

Yesterday we reported that Toyota increased its incentives since its wave of recent problems, and now Honda is following suit. According to Bloomberg, the company is offering incentives on all Honda-brand vehicles in the U.S. for the very first time. The incentives, which run through the beginning of May include, no down payment or security deposit, no money due for a month and a waiving of fees when the agreement is signed.

The Obama administration is holding a meeting today with automakers about electric vehicles. According to the Detroit Free Press, the two sides want to explore how they can work with utility companies to improve the introduction electric cars. Both industries are concerned about the infrastructure and how much energy demand the vehicles will create. Meeting in the White House will be the Detroit automakers, a number of foreign ones including Honda and Nissan, and start ups like Tesla and Fisker.

Coming up next, it’s time for You Said It!

And now it’s time for You Said It!

HyundaiSmoke wrote in to say, “An interesting Tid Bit that just came hot off the press. Fact-80% of 1 Series owners already think they have a FWD car. So, I guess that Front Wheel Drive BMW idea might not be such a bad thing after all?”

Isn’t that an amazing statistic? 80% of BMW 1-series owners thought their car was front wheel drive. No wonder BMW is going away from its tag line “The Ultimate Driving Machine.” Its owners don’t even know they own one!

Mouhamad A. Naboulsi saw our report on a Tata Nano catching fire and says, “I knew Tata will be hot, but boy I never thought that they’ll be on Fire.”

Mouhamad, what a bad pun. But I have to admit we almost used the same line in our report.

And finally, Bill Warner, the founder and co-chairman of the Amelia Island Concours d’Elegance wrote in to say, “As a fan of Autoline, I was pleased to see the report on the RM auctions at Amelia. With RM and Gooding combined, the total sales on Amelia Island topped $34 M in a period of less than 24 hours. It appears that many investors are hedging their bets against inflation with tangible assets…..also, the market has been down and appears to have reached bottom. The Ferrari “Daytona” Spyder that once belonged to both Roger Penske and Edsel Ford had sold in the RM Maranello auction for $1.4 M about three years ago, so the $1.1M sale price at Amelia was off the previous purchase price, but still good considering the market in general.”

“Thanks for the plug and tell John he should come visit next year.”

Bill, thanks for the invitation. I’d love to take you up on it.

Don’t forget to tune in to Autoline After Hours for the best insight and commentary in the automotive business. That’s tonight at 7PM ET.

And that’s it for today’s top news in the global automotive industry. Thanks for watching, we’ll see you tomorrow.

Thanks to our Partners for embedding Autoline Daily on their websites: Autoblog, The Auto Channel, Car Chat, WardsAuto.com and WWJ Newsradio 950

46 Comments to “Episode 356 – Toyota Faces $40B in Lawsuits, Daimler & Renault to Tango, White House Goes Electric”

  1. Nick Stevens Says:

    Stop the presses! Ford will save $1 million PER YEAR??? It pays Mullaly a well-deserved 18 Million a year. it is a 100 BILLION a year kind of company. IS this really NEWS worthy? Will it even make a DENT?

  2. Ralph Kercheval Says:

    Toyota may be losing the confidence vote but every Toyota dealer I have seen has been having outstanding sales figures with the rebates and dealer cash they are giving.

    The consumer may be willing to sacrifice (confidence, resale and safety) for the extra $1000-$2000 of the price.

    I am unsure how this will all fall out in the long run. It seems that as long as the price is low enough people will forgo any concerns they may have.

    Remember the Yugo, original Hyunndai Accent or Daiwoo???

  3. Nick Stevens Says:

    “Yugo, original Hyunndai(SIC) Accent or Daiwoo(SIC)???”

    The above are far more similar to Chryslers and Dodges and Chevys than to any Toyota. And the consumers KNOW IT, this is why they ignore the corrupt media (ABC news in Particular) and the much deeper discounts of the DOMESTICS, that were in place BEFORE Toyota offered theirs.

    No wonde rToyota sales are way up in March. Consumers are able to buy the highest quality cars in their price range at a deep dicsount.

    And this is even more true of the Cheapskate Honda which had to counter the Toyota discounts with theirs.

    Daewoo is now a member of the CHEVY family world-wide (except in China where GM sells them as Buicks).

  4. Nick Stevens Says:

    “It seems that as long as the price is low enough people will forgo any concerns they may have. ”

    We know this did NOT work out for Yugo, NOR did it work out for the low-quality domestics of the 70s and 80s, even the 90s, who lost HUGE market share to Honda and Toyota.

    Consumers know who makes first-rate vehicles and who does not.

  5. pedro fernandez Says:

    Ford is already promoting the hell out of the Fiesta and the car is not even available yet. They need to be very careful when they finally launch it and make sure there are enough to go around for anyone who wishes to get one. Most companies make the mistake of launching too early when there are not enough to go around, dealers take advantage of this and charge MSRP plus whatever the market will bear, causing buyers to get pissed off and end up buying something else. I remember when even the PT Cruiser had a waiting period and people were paying way over market to get one.

  6. len simpson Says:

    Careful, Fomoco employees, big brother is now watching you!

  7. len simpson Says:

    When I owned a towing service, I observed twice the folly of towing a small car behind a motor home when the small car was inadvertantly left in gear—–They ignited!

  8. Nick Stevens Says:

    Yup, that should do it!

  9. dcars Says:

    My mother who never thinks about cars had this to say about Toyota – “thank god none of us (her children) don’t own one of those terrible Toyota’s! The word is out, in the short term Toyota might be able to keep some of their existing customers but the conquest buyers are gone. When people use to buy a Toyota they had confidence that they were getting a good car and not just a cheap one.

  10. HyundaiSmoke Says:

    Ralph 60%-70% of all 1990s Hyundais in America still on the road are those 1995-1999 Original Accents most of them with over 200K miles. Accent was the first actual non POS car Hyundai made. Those XGS were pretty decent cars too. Elantras were ok, and Sonata became decent cars at about 2000. Some people like to use those old school Accents as scapegoats, but by far its proven to be Hyundai’s best car for the long haul. When Buying Hyundai you cant go wrong with Accent. I boost the brand, but Im going to be honest. You go to most junkyards you probably wont find a 90s Accent or Elantra or mostly any other 90s Hyundai product at all, but theres usually a stack of 90s Sonatas piled on top of each other.

    Americans get all googly eyed over Hyundai’s big cars, but its the smaller cars that Hyundai sells that are actually further along in development than the big cars. I boost Sonata, but I can assure you Sonata surely isnt going as reliable and Durable as Accent. Its a hell of a lot better than it used to be, but Last Gen Sonata did get a few TSBs here and there that made me question it a little bit. By the way since the Azera is a descendant of the XG Series its a very good car too, its a shame nobody hardly notices. Id buy Current Gen Azera over Last gen Sonata in a heartbeat. Then again Im not a fan of Midsized Sedans either. I think they are way way way overhyped, and part of America’s problem. I think traditional Midsized Sedans should be the next thing to be eliminated. To me Midsized sedans are the equivalent of a car company’s Cod Liver Oil. Its good for you in sales but it sucks too.

    Then again everything Toyota/Honda made during that 2005-2010 era makes me question it. That Fit and Yaris had a couple of pretty nasty TSBs I dont have to worry about with my Accent.

    As a matter of fact, I might buy an old school Accent put a supercharger on it, and get into racing.

  11. Rick Wakefield Says:

    You sounded like you are coming down with a cold or something. Hope you are well.
    Also, no mention of Autoline After Hours for Thursday night. I had to double check my calendar to be sure it was indeed Thursday.
    What’s up, is the show postponed this week.?

  12. HyundaiSmoke Says:

    The American car mrket went to shit when Toyota amd Honda decided they were going to force Camrys and Accords down eveybody’s throat after replacing Family Wagons and the Midsizers became a me too Product, so everybody had to get a crack at it.

  13. HyundaiSmoke Says:


    Yeah I guess you got a point about the Ultimate Driving Machine. They still have to do something about those damm CAFE scores though. Now I suggest they bring out a Fuel Economy Division to make that happen.

  14. HyundaiSmoke Says:

    I think the Midsized Sedan is a totally wasteful product that shows that Americans have a long way to go to trim off excess and waste.

    I actually think the CUVs (not SUVs) are on verge of replacing the midsized cars. Hyundai for example is purposely holding back GDI from the Tuscon for fear that it would Cannibalize Sonata’s Fuel Economy.

  15. HyundaiSmoke Says:

    I think that was a piss poor decision on Hyundai’s part to hold back GDI from Tuscon.

    If we want to be the leader, and if my assertion is right that Midsizers can be replaced by CUVs with the right tech. Then Hyundai should have led the way on that.

    Midsizers are so so so so so 80s-90s too.

  16. Drew Says:

    So, what reliable source did this “80% of BMW 1 series owners think they have front wheel drive” statistic come from??

  17. Max Christensen Says:

    “The consumer may be willing to sacrifice (confidence, resale and safety) for the extra $1000-$2000 of the price.”

    Isn’t this exactly what I’ve been saying for the past month? You price anything low enough or throw enough rebates on it, and it will sell!

  18. Max Christensen Says:

    And this morning another revelation about Toyota! Back in 2007 they sent out a service bulletin to their dealers warning about the posibility of floor mats getting caught up around the accelerator pedal and causing a potentially deadly problem (as many have found out). Yet they did not notify thier customers of this problem?????? What a corrupt bunch of idiot thieve this Toyota outfit is turning out to be!

    Perhaps their plan is this: Japan couldn’t beat us in a war, so let’s send enough POS cars to America and kill em off that way?

    I may have been wrong in something I’ve said several times. I’ve said the Big 3 are no better morally than Toyota ….. but I’m beginnig to wonder??????

  19. Salvador G. Says:

    JohnMcElroy says:
    Bloomberg reports that an opinion poll shows American consumers are turning against Toyota. Four out of ten now say they would never buy a Toyota. In fact, the company was viewed favorably by fewer than half of consumers, only 49%..

    AAH Questions…
    1. On Bloomberg report about American consumers…
    -This consumer report opinion poll is and sounds misleading- since it can also be said that 6:10 Americans would buy a Toyota and from the report itself -it can also be said that more than 4:10 Americans don’t have a favorable view of GM(it said 57% favorable)// and since it doesn’t show what car brand those that were poll currently own or if ever they owned a Toyota in the past.

    -AAH to David Welch:
    What’s David opinion of Bloomber’s report?? and if he agrees with me- Can he please go punch in the face whoever wrote this report.

    2. AAH on Corvette Racing…
    - Corvette racing actually started having communication problems in the GT2 class beginning last year, but most people let that by simple because they were new on GT2 and no one said anything-
    and since this last 12hr at Sebring car crash Corvette Racing has done an excellent job on dodging the issue.
    AAH question:
    -Why Corvette Racing can not figure out how to communicate in the GT2 class??

    AAH Questions:
    -What do you guys opinion on the 12hr of Sebring??
    -Do you think Ferrari make the race pretty boring??
    -and who was it without the new Audi??
    (I called it the Baudi Mobile)

  20. alleycat Says:

    hahahaha……..it’s what has been known for years…yuppies, or whatever the hell they are called nowadays, always bought BMWs as STATUS SYMBOLS, not as the ULTIMATE DRIVING MACHINES…those morons couldn’t heel and toe shift, much less realize that the car is PUSHING them, instead of PULLING them…hahaha…now whenever I see a guy with slicked back hair, a neatly pressed suit, and a stupid look on his face, I will know he drives a B-M-W (Big-Moron-Wannabe). hahahahahahaha

  21. HyundaiSmoke Says:

    Drew, many places are reporting on this internal study BMW itself did.
    That’s just one of many of articles quoting BMW CEO.


  22. HyundaiSmoke Says:

    Of course the study could be rigged too, to make the business case for the BMW FWD car, but I think its true considering the car illiteracy of the average American.

  23. Ralph Kercheval Says:


    We agree there is no question…
    I see we can always get a rise out of our friend Nick. Even when he agrees in part he finds the need to yell about something. (Capitals signify yelling Nick )


    The original Accent I am referring to was the 4995.00 throw away car. Once there were over 50000 miles on the car, most repairs were priced over the value of the car on the wholesale market. Hyundai has made great strides to become a player in the international marketplace. They are certainly not a throw away car any longer. When magazines like Road And Track make comparisons to both Lexus and BMW that says alot.

  24. HtG Says:

    In Re the 80% of BMW drivers recently in the news.

    I just love it when I pass those limpsticks in their BMWs. I now know why they are going along so sheepishly slow on the highway. THEY HAVE NO CLUE. And to that little belle who honked at me for stopping at two, count ‘em two stop signs in a residential area, YOUR BUTTS LOOKS FAT!

    (see? no cursing necessary)

  25. HtG Says:

    Oh, and may I share one of “Hermann’s Hints”? Never give a BMW an inch. Actively take away their space and opportunities. They respect this, and calm follows.

  26. Not Nick Says:

    Can you get rid of the comment section?

    It’s always the same clown and he’s got his head up his ass.

  27. HyundaiSmoke Says:

    Excel was a $4995 car. I dont even pay any homage to that rattletrap.

    The original MSRPs on Accents in 1995 when it first came out were $8079. For an $8079 car, I still see a boatload of them around alive and kicking just fine. The crappiest thing on that car was the ECU. The ECU quality of those early Accents was so bad it played with water pumps, trannies, etc…

    Solution-replace old Accent ECUs with new ones.

    Those Accents are starting to actually not just hold their resale values better, but the older models are starting to go up in resale value.

    I used to own an old school Accent, but I think il get another one to experiment with, and do some serious performance work to it.

  28. Rick Wakefield Says:

    What is actually available in the aftermarket to support performance mod’s to a Hyundai, let alone an older Accent. Nothing.
    I think they are still disposable.

  29. C-tech Says:

    If electric cars and plug-in hybrids do become more popular, will homeowners (particularly in the south and west) consider solar powered rechargers for their vehicles? Perhaps automakers should consider offering this as an option (are you listening Big Ed at GM?).

  30. Nick Stevens Says:

    “(Capitals signify yelling Nick )”

    I usually use them for EMPHASIS. Look it up. If I was able to use italics or bold or underline in this box, I would.

    Caps or no caps, you and Max could not be more clueless in your daily nonsense, comparing Toyotas with… Yugos or Daewoos…

    What planet do you live on?

  31. Puremoose Says:

    John: Did you hear that SAAB has started building the 9.5 in Sweden this week

  32. HyundaiSmoke Says:

    Rick, theres plenty now. As a matter of fact there are more aftermarket goodies for the older Accents than my 07, which kinds of piss me off. I can get a new glow gauge set for a 1995-1999 Accent if I needed it, but they dont even have a gauge set out yet for the 2006-2010 Accent.

    The Supercharger, I can get that from a company in Australia that specializes in Accents and other Hyundai/KIA small cars. If I want a Turbo I can find a Turbo on many Korean Aftermarket sites and many of them have US warehousing now. So instead of wating 2 weeks for an aftermarket part, you can get it in 2 days from a warehouse in Arizona, California, New York or whatever.

    Those days of Shitty Hyundai Aftermaket Support are over, and have been so for about 5 years.

    Hyundai really has to work better on that perception, becuase this is getting ridiculous.

  33. HyundaiSmoke Says:

    Its a belt driven supercharger by the way

  34. Tony Gray Says:

    Wasn’t the first Hyundai called Excel?

    And why the lack of love for us Bimmer drivers? I love (and know how to drive) my 335i Coupe that I purchased last night.

  35. Andrew Charles Says:

    Re owners not knowing whether a vehicle was fwd or rwd, GM Holden found the same thing decades ago when they switched from the rwd Gemini to a fwd (sub)compact. Most buyers don’t know and don’t care.

  36. HyundaiSmoke Says:


    The Very First Hyundai was The Ford Cortina Built from 1965-1982. The successor to that became Hyundai Stellar produced from 1983-1990. The Stellar spawned off 2 cars Hyundai Sonata and Hyundai Elantra. Leading up to the Sonata/Optima Duo and Elantra/Cerrato/Forte/Spectra Duo.


    Hyundai Pony built from 1975-1990, and it was exported to various markets making it to as far as Canada. The Successor to this became Hyundai Excel the Notourious Product that was great for a $4500 car, built from 1985-1994. The Excel grew up to Spawn the Accent-Verna/Rio-Pride(Current and Last generation-First Rios were Ford Festiva-Mazda 121s)/Getz/i20/Soul/Venga Cars.

    Full Size:

    Hyundai built the Ford Taurus Called Hyundai 20M from 1969-1974. The Successor to this Grew up to be the Granada/Grandeur/XG/Azera/Amanti/Cadenza/K7 Series.

    Thats the core beginnings of the Hyundai brand.

  37. Max Christensen Says:

    Nicky ……. you’re slipping! That’s the best you could do??? But then, I guess maybe even you know better than to argue when you are clearly wrong, huh?

  38. HyundaiSmoke Says:


    On that Genesis and Azera its a typical Hyundai ECU Code setting malfunction, according to NHTSA. As I have said before, the ECU is the last big quality Kink Hyundai has to overcome.

    Solution= Have dealer fix ECU progamming, or reset the ECU yourself.

  39. HyundaiSmoke Says:

    Resetting the ECU=unplug it and then wait a few seconds, and then plug it back in.

  40. HyundaiSmoke Says:

    By the way, KIA Confirms (K2700) Bongo Frontier RV production at West Point Georgia in second half of 2010, as well as another product (Hyundai Santa Fe).

    KIAs globally are becoming popular with RV owners. KIA wants those RV owners to Attach a KIA to a KIA. They already sell the Bongo Frontier RV in many markets, but now they want a piece of the US pie with its Affordable High fuel efficiency product-something lacking in the US RV Market.

    -Source: KIA Motors.

  41. Nick Stevens Says:

    BMW (Driver) Envy

    USed BMWs can really be dirt-cheap, everybody can afford one, UNLESS (emphasis, dumbass, not shouting!) everybody gets it and of course prices will skyrocket..

  42. HtG Says:

    BMW (driver) Bad Behavior

    If drivers of BMWs knew better how to drive aggressively, but in a manner considerate of others use of the public roads, then they wouldn’t need to fall back on a reliance of envy as an explanation for the sniggering attacks directed their way.

    If moneyed oafs (Nick is neither) in BMWs didn’t clog up exciting roads and the left lane, under the misapprehension that they are zipping along admirably, confusing the ransom they paid for their leased uber chariot to their own piloting abilities, then maybe there would not be the hooting upon finding out how little some of the kleine Fuhrers know about their car.

  43. Nick Stevens Says:

    Oh Really? More BS about BMWs and their owners.

    Do not confuse what people buy and what they CAN buy. The “Millionaire Next Door” correctly pointed out that these types drive beat-up trucks, while they could afford Rollses. Most of them would never be millionaires if they squandered their money foolishly buying any car NEW, especially a $100k 7 series or S class.

    it is irrational to single out one brand’s drivers. Maybe it is due to the huge sales asuccess of the SMALLEST, really near-Luxury, not truly luxury, Civic-sized (but heavier) 3-series, you tend to see way too many of these on the road.

    PS My definition of a millionaire is NOT one with a measly million $ of assets, everybody and his mother-in-law, at least where I work, can have that, but a correct, inflation-adjusted one. The term was introduced 100 years ago, where the $ was 50-100 TIMES stronger than it is today. So unless you have assets of $50-100 billion, you really are NOT what people imagine when they hear “millionaire”. And I can safely say that I am nowhere close to these levels.

  44. HtG Says:

    Funny, the Rolls and Bentley drivers show an ease which singles them out. Also Audi drivers are on the ball. But something’s going on with the Bimmer people.

    Nick, have you ever been stuck behind some coot on a twisty road? Caught behind the guy obliviously blocking the left lane, and thus slowing all traffic? When a BMW does this, it is noted.

  45. Nick Stevens Says:

    Again, why the focus on BMW drivers? In fact, I have never observed a BMW obstructing anything on the road. While I have seen plenty of Geezers in Buicks and Caddys block the PASSING left lane at 50 MPH! IN germany you would get a ticket for that! But then again, Drivers are far more serious there, they have to be, with Porsches flying by at 175 MPH past them!

    I have seen plenty of lethargic lexus drivers (who would not be driving this boring POS?) wallow around. As for Rollses, first, there are 1000 times more 3 series than Rollses around, literally, and second, the Rolls owners are DRIVEN by professional drivers.

  46. Nick Stevens Says:

    PS as you know, Not only BMW owns rolls Royce, bu tboth Rolls models on sale today, the phantom and expecially the Ghost, share a ton of components and platform with the 7 series.