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Toyota agrees to pay more fines
By Tomoko A. Hosaka |
December 22, 2010, Wednesday
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Print Edition
Print Edition
TOYOTA Motor Corp has agreed to pay the United States government a record US$32.4 million in additional fines to settle an investigation into its handling of two recalls at the heart of its safety crisis.
The civil penalties will settle investigations into how Toyota dealt with recalls over accelerator pedals that could get trapped in floor mats and steering relay rods that could break and lead to drivers losing control.
The latest settlement, on top of a US$16.4 million fine Toyota paid earlier in a related investigation, brings the total penalties levied on the company to US$48.8 million. It caps a difficult year for the world's No. 1 auto maker, which recalled more than 11 million vehicles globally since the fall of 2009 as it scrambled to protect its reputation for safety and reliability.
Toyota's board of directors agreed to pay the fines yesterday at the company's board meeting in Japan, according to an official, and the company said it agreed to the penalties without admitting to any violations of US laws. However, that does not free Toyota from potential civil and criminal penalties in private lawsuits and other federal investigations.
In April, Toyota agreed to pay the maximum fine allowed under law for a single case - US$16.4 million - for failing to promptly alert US regulators to safety problems over sticking accelerator pedals. Under federal law, auto makers must notify the National Highway Traffic Safety Administration within five days of determining that a safety defect exists and promptly conduct a recall.
At the time, Toyota denied attempting to hide a safety defect and said it agreed to the penalty to avoid a lengthy legal battle with the government. Analysts said the new fines - small considering Toyota's 98.7 billion yen profit (US$1.2 billion) in the first half alone - would have virtually no impact on its earnings.
The civil penalties will settle investigations into how Toyota dealt with recalls over accelerator pedals that could get trapped in floor mats and steering relay rods that could break and lead to drivers losing control.
The latest settlement, on top of a US$16.4 million fine Toyota paid earlier in a related investigation, brings the total penalties levied on the company to US$48.8 million. It caps a difficult year for the world's No. 1 auto maker, which recalled more than 11 million vehicles globally since the fall of 2009 as it scrambled to protect its reputation for safety and reliability.
Toyota's board of directors agreed to pay the fines yesterday at the company's board meeting in Japan, according to an official, and the company said it agreed to the penalties without admitting to any violations of US laws. However, that does not free Toyota from potential civil and criminal penalties in private lawsuits and other federal investigations.
In April, Toyota agreed to pay the maximum fine allowed under law for a single case - US$16.4 million - for failing to promptly alert US regulators to safety problems over sticking accelerator pedals. Under federal law, auto makers must notify the National Highway Traffic Safety Administration within five days of determining that a safety defect exists and promptly conduct a recall.
At the time, Toyota denied attempting to hide a safety defect and said it agreed to the penalty to avoid a lengthy legal battle with the government. Analysts said the new fines - small considering Toyota's 98.7 billion yen profit (US$1.2 billion) in the first half alone - would have virtually no impact on its earnings.
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