Post by TonyV on Apr 6, 2010 0:32:11 GMT -5
Last Updated: April 06. 2010 1:00AM .
Toyota faces $16.4M fine for hiding safety defect
Proposed penalty is largest ever sought by NHTSA officials
David Shepardson / Detroit News Washington Bureau
Washington -- Federal safety regulators are seeking to fine Toyota Motor Corp. $16.4 million -- the largest ever penalty against an automaker -- for failing to disclose problems with sticky accelerator pedals in a timely manner.
The National Highway Traffic Safety Administration said Toyota knew in September that it had a problem with accelerator pedals that required fixing, but failed to recall 2.3 million vehicles until January -- four months later.
"We now have proof that Toyota failed to live up to its legal obligations," Transportation Secretary Ray LaHood said Monday. "Worse yet, they knowingly hid a dangerous defect for months from U.S. officials and did not take action to protect millions of drivers and their families."
Auto manufacturers are legally obligated to notify NHTSA within five business days if they determine a defect exists. NHTSA said it learned after reviewing Toyota's records that it knew of the pedal defect since at least Sept. 29, 2009.
NHTSA outlined its findings in a five-page letter to Toyota late Monday and gave the company until April 19 to respond in writing. NHTSA said it will go to court to impose the fine if Toyota raises objections.
The $16.375 million penalty is the maximum NHTSA can levy under law. Previously, its largest fine was $1 million against General Motors in 2004 for failing to disclose a defect with windshield wipers in 600,000 vehicles for more than two years. Toyota could face more fines as the agency continues to investigate.
"We will continue to hold Toyota accountable for any additional violations we find in our ongoing investigation," NHTSA Administrator David Strickland said.
The fine against Toyota comes just six weeks after NHTSA launched an investigation into the timeliness and scope of the automaker's three recent recalls. Approximately 2.3 million vehicles were recalled in January for the sticky pedal defect. Toyota has separately recalled 5.4 million vehicles over gas pedal entrapment issues, with some vehicles covered by both actions.
Reviewing Toyota's records, NHTSA learned that the automaker issued repair procedures Sept. 29 to its distributors in 31 European countries and Canada to address complaints of sticky accelerator pedals and sudden acceleration. Documents show Toyota was aware that U.S. consumers were experiencing the same problems, the agency said.
NHTSA obtained hundreds of e-mails from Toyota that support its conclusion Toyota knew of the issue last year.
The agency has received more than 3,000 complaints of runaway Toyota vehicles since 2000, alleging at least 51 deaths.
The penalty is a financial pittance for Toyota, which had revenue of $209 billion last year, but could add to its public relations woes. The company has endured congressional hearings and a torrent of bad publicity over the acceleration problem.
Toyota said it was improving its safety efforts.
"We have already taken a number of important steps to improve our communications with regulators and customers on safety-related matters," Toyota said in a statement Monday.
NHTSA, which came under harsh scrutiny for conducting eight investigations into sudden acceleration issues at Toyota since 2000 and doing little, is now taking a far more aggressive stance with automakers.
"Toyota's actions have hurt everyone from consumers to our auto dealers. That is why today's announcement sends an important message to Toyota that failure to disclose safety defects will cost you," said Sen. Amy Klobuchar, D-Minn., a critic of Toyota during congressional hearings.
"To make sure problems like this don't happen again, consumers' complaints need to be given as much attention from safety regulators as the industry's defense of those complaints."
NHTSA has asked its inspector general to determine if it needs more investigators. The agency is no longer automatically closing investigations when automakers agree to a recall.
dshepardson@detnews.com (202) 662-8735