Source: Automotive News special email alert
Link: www.oilgelsettlement.com

Mark Rechtin - Automotive News - January 8, 2007 -

LOS ANGELES -- Toyota Motor Sales U.S.A. Inc. has quietly settled a class-action lawsuit that covers about 3.5 million Toyota and Lexus vehicles that may have been damaged by engine oil sludge.

Details of the settlement, which allows for third-party mediation of sludge claims rejected by Toyota, have been mailed to 7.5 million current and previous owners.

Critics contend Toyota has told customers and dealers too little about sludge issues. They say some customers took vehicles with dead engines to dealers who had little or no knowledge of the problem and often assumed it was the owners' fault.

Unhappy customers had no remedy other than hiring a lawyer to go after Toyota.

Under the agreement, owners whose claims have been denied by Toyota may submit them to a third-party mediator at no cost for binding arbitration.

"This settlement breathes life into claims that have been dead for years," said Gary Gambel, a lawyer for plaintiffs who sued Toyota. "This is not a settlement that gives a few dollars to everyone. The relief is exactly tied to the problems and damages that someone might have."

About 3.3 million Toyota vehicles are susceptible to oil sludge, which can cause thousands of dollars in damage and require replacement of the engine.

Sludge is gelled oil that fails to lubricate engine parts. It can lead to damage, often requiring a new engine at a cost that can exceed $10,000. Complaints about sludged engines have plagued several carmakers, but Toyota's troubles have been especially controversial in light of its reputation for vehicle quality.

The issue highlights a possible ***** in the company's armor. Executives fear Toyota is growing too fast for its engineering resources. That could lead to quality snags and a tarnished reputation.

When a customer takes a sludge-caked engine to a dealership, there is usually a "clean-out" procedure. The head is pulled and a service technician tries try to steam out the sludge. If that doesn't work, the engine must be replaced.

Sludge can result from poor engine design; overly tight tolerances between moving parts; improper cooling; and poor maintenance by consumers.

Toyota insists the problem arises mainly when owners fail to change their oil frequently enough.

The agreement does not find Toyota at fault.

Damages that can be recovered include loss in value of the vehicle and incidental costs, such as rental cars. Past lawyers' fees, mental anguish and bodily injuries are not covered.

A Toyota spokesman said the agreement is not a defeat for the automaker.

"The settlement validates the customer support program we implemented four years ago," Xavier Dominicis said.

"The terms of the program remain unchanged. There always was a way for customers to appeal our decision."

Plaintiff lawyers disagree. They say Toyota failed to communicate the extent of the problem to its dealers and customers. Toyota's appeal process also meant hiring a lawyer, which many consumers could not afford. It costs nothing to file an appeal with Ates.

"The consumer only needs to show reasonable maintenance in terms of oil changes," Gambel said. "You don't need to prove where the sludge came from, or explain your driving habits. If you have oil sludge, Toyota pays" the consumer.

 

I'm not taking Toyota's side on this, but the problem of poor vehicle maintenance is probably the biggest single cause of exposing the inherent sludge-creation problem in their engines. If people would just do the simple maintenance, they probably wouldn't be stuck in this predicament. I mean, how hard is it to remind yourself to get the oil changed every 3000 miles?

 

True, but not all engines have an equal tolerence to extending a couple of oil changes. The Toyota / Lexus 3.0 L is notorious for being unforgiving, mainly because the oil runs hot from small oil cooling passageways. This was done for emissions reasons...the designers wanted a high engine temperature, and the engine is fine as long as you are religious about changing the oil regularly every few months or using synthetic oil, which is far more resistant to high-temperature breakdown than regular petroleum-based oil.

Frankly, I think that is also part of the problem.............Toyota should have recommended synthetic oil for this engine and didn't. Many people, however, balk at the high price of synthetic, and maybe Toyota's reasoning for not recommending it may have been a concern that it would hurt the Camry's huge sales figures.

Ordinarily, I don't see a real need for synthetic oil for non-turbo gas engines, except in extreme-climate areas like the Desert Southwest in summer or the Upper Plains/ Canada in winter, but this non-turbo engine may be an exception, especially for those who want long oil-change intervals and are not willing to change conventional oil at reasonable intervals.

 

3000 miles is a marketing ploy from quick lube stores, and well, if you use the crappy filters and oil they use then maybe you should do ever 3k miles, anyway... but the fact remains that many of those sludged engines had their oil changed per the factory recommendations in the manual (likely every 5000 miles is what the manual recommended) and with oil that met Toyota's ratings and requirements... and they still sludged.

Granted all engines will sludge over time, but dying outright from nothing more than sludge within the first 100k miles and adhering to a change schedule of every 5k miles or less... that's ridiculous.

 

My girlfriends step-father loves toyotas. Toyota Trucks to be mroe specific.

I detailed his truck as a birthday gift last year and while I drove it to the shop (space a local garage lets me use on the weekends), I noticed his "check engine" light was on. I alter noticed his tires were bald. After giving him his car back I mentioned all this to him and he even claims he hasn't chainged the oil either. I asked why, and he said "Its a toyota, it'll last forever"...
joy

 

not to mention that Toyota has already increased the warranty on the those specific models, as they do when there is an major problem.

But you still have to show that you maintained your car properly, or no dice.

 

audi had this exact problem w/ their 1.8t motors. The sh1tty thing was, it was due to Audi and their claims the motor can go for x miles without oil change in between. It's resulted in lots of failed motors and Audi to rewrite their service interval.

 

As well as ES350's

 

That's it in a nutshell. "We're not saying there ever was a fault, simply improper maintenance by consumers, HOWEVER we have always stood behind our product and will continue to do so as you see today at this moment".

GO TOYOTA!

 

Holy moly. 3 millions cars.

If 10% of the cars need the engine changed at roughly $10k per engine, that is 3 billion dollars.

 

Nah... it's 'up to' 10k per engine and that's what the customers were paying the dealerships 'up to' for the replacements. Look at Toyota's actual cost on warranty work and parts and I bet it's more like 2k parts and labor per engine for Toyota... and it's likely nowhere near 10% of the engines needing a full replacement, either. I mean Mazda's RX8 engines are considered to have an extremely high rate of failure and so far they're up to 5%.

 

Sorry but Toyota didn't do the 'right thing' until they got sued.

I don't call that "taking responsibility and making it right"... I call that "being stubborn until a pack of lawyers presents the case to a judge and the judge threatens you with hefty fines".

 

How do you check if you have engine sludge?!?

 

The people with Toyota and Lexus goggles will never see this that way. I for one don't own a pair.

 

No. This is incorrect. It is NOT a ploy of quick-lube shops....that is a myth. Even Consumer Reports, so well-versed on most auto issues, has let themselves be duped to some extent with this. 5000 miles, regardless of what is in the Owners' Manual, is OK of you are driving long distances, at moderate temperatures, on uncongested roads, with little traffic, or using synthctic oil, but it is clearly TOO LONG when you deal with the conditions many of us do today with endless stop-and-go traffic, regular petroleum oil, and short trips. 3 months/ 3000 miles is best under those conditions....you can go to maybe 4 months if you don't have the 3000 miles yet after 3 months.

My oil gets changed every 3-4 months with a factory filter and Castrol dino oil...either by myself in the driveway or in the dealer service bay, depending if I have the time...and I have never had any engine oil-related problems.

I do agree with you, however, that junk oil filters, poor-quality oil, and a poorly-done job, can lead to problems. That's why I avoid Jiffy Lube and other dime-store oil-change shops like the plague.