Toyota to pay $32.4M in fines to settle investigation
Toyota Motor Corp has agreed to pay the US government a record $32.4 million in additional fines to settle an investigation into its handling of two recalls at the heart of its safety crisis, a person familiar with the case said.autos Updated: Dec 21, 2010 09:16 IST
Toyota Motor Corp has agreed to pay the US government a record $32.4 million in additional fines to settle an investigation into its handling of two recalls at the heart of its safety crisis, a person familiar with the case said.
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 person spoke on condition of anonymity in advance of a formal announcement.
The latest settlement, on top of a $16.4 million fine Toyota paid earlier in a related investigation, brings the total penalties levied on the company to $48.8 million. It caps a difficult year for the world's No. 1 automaker, 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 on Tuesday at the company's board meeting in Japan, sources said.
However, that does not free Toyota from potential civil and criminal penalties in private lawsuits and other federal investigations. Toyota did not immediately comment.
In April, Toyota agreed to pay the maximum fine allowed under law for a single case - $16.4 million - for failing to promptly alert US regulators to safety problems over sticking accelerator pedals. Under federal law, automakers 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.
The latest fines involve two separate safety problems affecting certain Toyota passenger cars and trucks.
The first case deals with recalls in 2009 and 2010 of about 5 million Toyota and Lexus vehicles with gas pedals that could become entrapped in floor mats. Toyota had recalled 55,000 all-weather floor mats in 2007 to address pedal entrapment, but the government said its investigation found that simply removing the floor mats was insufficient.
A high-speed crash involving a Lexus in August 2009 killed four people near San Diego, prompting the government to investigate the recall. After reviewing crash evidence and other data, NHTSA investigators concluded that Toyota failed to notify the government about a known safety defect within five days.
In the second case, Toyota conducted a recall in 2004 of Hilux trucks in Japan with steering relay rods that could break and affect steering. Toyota told U.S. regulators in 2004 that the safety problem was limited to vehicles in Japan and the company had not received similar complaints in the US.
But a year later, Toyota told NHTSA the steering defect was also found in several US models and recalled nearly 1 million vehicles.
First Published: Dec 21, 2010 09:08 IST