- Toyota has agreed to pay an additional $32.4 million in fines to settle two federal investigations into its handling of auto recalls.
- The U.S. government contends that Toyota "had not fulfilled its obligation to report a known safety defect within five days, as required by law."
- Toyota issued a statement saying it "is pleased to have resolved these legacy issues related to the timeliness of prior recalls dating back to 2005," but the automaker did not admit to any violations of federal safety rules.
WASHINGTON — Toyota has agreed to pay an additional $32.4 million in fines to settle two federal investigations into its handling of auto recalls. The feds contend that Toyota dragged its feet in reporting the recalls in a timely manner, although the embattled Japanese automaker refuses to admit any violation of federal safety rules.
Automakers are legally obligated to report a known safety defect to the federal government within five days.
With the latest fines, Toyota has now paid a record-setting $48.8 million in civil penalties to the federal government in 2010 for not reporting recalls in a timely manner. The automaker paid $16.4 million earlier this year to settle a similar investigation with the federal government. Toyota will pay the maximum in civil penalties for each of the two violations stemming from pedal entrapment and steering relay rod recalls in the latest round of fines.
Toyota may be faced with even more fines in the coming months, as the National Highway Traffic Safety Administration continues to investigate such issues as whether Toyota looked into electronic interference as a possible cause of sudden acceleration in recently recalled vehicles.
Since November 2009, Toyota has recalled an estimated 15.5 million vehicles worldwide, largely for defects related to unintended acceleration.
"I am pleased that Toyota agreed to pay the maximum possible penalty and I expect Toyota to work cooperatively in the future to ensure consumers' safety," said U.S. Transportation Secretary Ray LaHood in a statement late Monday.
Toyota said in a statement that it had reached two settlement agreements with the National Highway Traffic Safety Administration "related to the timeliness of recalls conducted by the company in 2005 to address potential concerns with steering relay rods and from 2007 to early 2010 to address the potential for pedal entrapment by unsecured, incompatible or improperly installed floor mats."
"Toyota is pleased to have resolved these legacy issues related to the timeliness of prior recalls dating back to 2005," said Steve St. Angelo, Toyota chief quality officer for North America. "As we have demonstrated in recent months, our North American operations now have a greater voice in making safety decisions, and we are taking appropriate action whenever any issues emerge."
This latest round of fines caps perhaps the toughest year for Toyota in the company's history. It has grappled with bad publicity in the wake of the recalls, a congressional investigation and a class-action lawsuit on behalf of owners who may not have experienced sudden acceleration in Toyota vehicles, but who claim economic loss.
A California judge recently ruled that there is evidence that Toyota knew more about problems with its vehicles than it revealed to the public. It is unknown at this point what effect the latest round of fines will have on the legal proceedings against Toyota.
Inside Line says: Lots of damage control on tap for Toyota as it enters the new year. — Anita Lienert, Correspondent
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dgmail says:
07:57 AM, 12/31/2010
RE:biffinator
Time to put up your "rising sun" flag.
Another delusional anti domestic troller, chimes in.
biffinator says:
02:21 PM, 12/26/2010
Hilarious!
They get fined $32 Million for their 'mishandling' of a 'defect' that no one seems to be able to replicate.
AND YET, for Detroit's defective management's rewarding and overpaying incompetent unions for 50 years until all but the stupidest consumers have long since wandered away or died in their poorly designed and poorly built death traps 'US Automakers (spelled U-N-I-O-N)' get REWARDED with BILLIONS of taxpayers dollars.
charleneb1 says:
07:08 PM, 12/23/2010
See http://www.uc2.blogspot.com for a Toyota owner's spot-on commentary about Toyota's recent actions.
See http://www.petitiononline.com/TMC2003/petition.html for comments by over 3,200 Toyota owners regarding ENGINE OIL SLUDGE which continues to plague late model Toyota vehicles.
Toyota is best at blaming the vehicle owner. Expect this treatment when you purchase a vehicle from this company. This might not be so bad if the problems were minor, but they are major as in total engine failure, total brake failure, and sudden unintended acceleration.
Is Toyota synonymous with high quality and reliability? OR, is it synonymous with deception and cover-up at the highest level of the company?
dgmail says:
11:17 PM, 12/22/2010
Should of been $32 BILLION. Lying and misleading the public and never admitting a problem, all the while covering it up, is normal day to day in Japan for their hometown automakers.
It doesn't fly over here.
Anyways, Lexus are for the gold chain wearing gas station/party store owner set. I would't be caught dead (no pun) in one.
gmhl10 says:
10:27 AM, 12/22/2010
I agree with dgs4.
I mean... even the Toyota common stock on the NYSE didn't take a huge hit. It's pretty much staying stable.
dgs4 says:
10:35 PM, 12/21/2010
With as much cash as Toyota is sitting on that fine is a drop in the bucket. From what I have seen this whole recall fiasco has done little to nothing to change people's perception of the brand. Toyota will eventually emerge from this just fine. Too many people have been brainwashed into believing Toyota's are the safest most reliable cars on the road. Americans love them and their appliance like driving feel, as most Americans have zero interest in driving other than as a means to get to their destination. Plus, how is anyone expected to drive a sporty car (meaning manual transmission) when there are other priorities while driving, such as applying makeup, eating, babbling on a cell phone, texting, reading, or generally anything but paying attention to the road?
A once great Japanese company has succumed to the whims of the American market, and with that have lost their identity and the great cars that went with it. Toyota is now more American than Ford/GM, and unfortunately Honda is following suit. That is the real tradgedy here, not these fines/lawsuits.
lsobboh says:
09:36 PM, 12/21/2010
Gee. Some tough times for Toyota lately. What, is the government trying to overcome their debt by sucking money out of Toyota? That was a joke, but seriously though, these really are some tough times for Toyota. It's hard to put money into R&D when all of it is being sucked into other stupid things. I wonder how this will impact the next Toyotas to come... At least their market over in Japan and Europe is going strong. Can't say the same for America. In any case, they'll bounce back for sure...
racerhead says:
06:07 PM, 12/21/2010
In 2012 I will lease a new Toyota or Lexus. I careless about this fine.
cardesigner82 says:
03:31 PM, 12/21/2010
@icecubefosho
That is still to be determined! Toyota should want to pass the plagued #1 spot to Volkswagen, because with that #1 spot comes ALOT of problems...ask GM.
Also, Toyota accountants should excercise their writing wrists...many settlements should be coming via class action and personal injury cases.
icecubefosho says:
01:27 PM, 12/21/2010
Im still confused as to what was the root of the problem? Floor mats? Pedals? A Computer Glitch? And what I thought, driver error/stupidity.