Toyota agrees to pay record US$16.4m penalty
By Ken Thomas |
April 20, 2010, Tuesday
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Print Edition
Print Edition
TOYOTA Motor Corp agreed yesterday to pay a record US$16.4 million fine for failing to properly notify United States authorities about a dangerous accelerator pedal defect. The auto company said it had agreed to settle the civil penalty but denied the government's allegation that it violated the law.
US Transportation Secretary Ray LaHood, announcing the largest-ever penalty paid by an auto maker to the US government, said that "by failing to report known safety problems as it is required to do under the law, Toyota put consumers at risk."
"I am pleased that Toyota has accepted responsibility for violating its legal obligations to report any defects promptly," LaHood said, noting that the US government was continuing to investigate "whether the company has lived up to all its disclosure obligations."
Toyota said it agreed to the penalty "to avoid a protracted dispute and possible litigation" but denied the government's allegation that it violated the law.
"We believe we made a good faith effort to investigate this condition and develop an appropriate countermeasure. We have acknowledged that we could have done a better job of sharing relevant information within our global operations and outside the company, but we did not try to hide a defect to avoid dealing with a safety problem," Toyota said.
The penalty is linked to a January recall of 2.3 million vehicles with sticking accelerator pedals. The government says Toyota knew about the problem in late September and failed to report the potential safety defect within five business days under the law.
The fine does not free Toyota from potential civil and criminal penalties. The Japanese auto firm still faces dozens of personal injury and wrongful death lawsuits in federal courts and federal prosecutors and the Securities and Exchange Commission are conducting investigations related to the recalls.
From the government's viewpoint, the agreement to pay the full fine constituted an acceptance of responsibility for hiding the safety defect in violation of the law.
Toyota announced it would recall 2.3 million vehicles in January to address sticking pedals on popular vehicles such as the Camry and Corolla. The Japanese auto maker has recalled more than 8 million vehicles worldwide because of acceleration problems in multiple models and braking issues in the Prius hybrid.
The fine was based upon timelines provided by Toyota that showed the car maker had knowledge of the sticky pedal problem at least since September 29, 2009.
US Transportation Secretary Ray LaHood, announcing the largest-ever penalty paid by an auto maker to the US government, said that "by failing to report known safety problems as it is required to do under the law, Toyota put consumers at risk."
"I am pleased that Toyota has accepted responsibility for violating its legal obligations to report any defects promptly," LaHood said, noting that the US government was continuing to investigate "whether the company has lived up to all its disclosure obligations."
Toyota said it agreed to the penalty "to avoid a protracted dispute and possible litigation" but denied the government's allegation that it violated the law.
"We believe we made a good faith effort to investigate this condition and develop an appropriate countermeasure. We have acknowledged that we could have done a better job of sharing relevant information within our global operations and outside the company, but we did not try to hide a defect to avoid dealing with a safety problem," Toyota said.
The penalty is linked to a January recall of 2.3 million vehicles with sticking accelerator pedals. The government says Toyota knew about the problem in late September and failed to report the potential safety defect within five business days under the law.
The fine does not free Toyota from potential civil and criminal penalties. The Japanese auto firm still faces dozens of personal injury and wrongful death lawsuits in federal courts and federal prosecutors and the Securities and Exchange Commission are conducting investigations related to the recalls.
From the government's viewpoint, the agreement to pay the full fine constituted an acceptance of responsibility for hiding the safety defect in violation of the law.
Toyota announced it would recall 2.3 million vehicles in January to address sticking pedals on popular vehicles such as the Camry and Corolla. The Japanese auto maker has recalled more than 8 million vehicles worldwide because of acceleration problems in multiple models and braking issues in the Prius hybrid.
The fine was based upon timelines provided by Toyota that showed the car maker had knowledge of the sticky pedal problem at least since September 29, 2009.
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