Post by TonyV on Apr 19, 2010 14:52:49 GMT -5
Last Updated: April 19. 2010 2:12PM .
Toyota agrees to pay $16.4 million fine
David Shepardson / Detroit News Washington Bureau
Washington -- Toyota Motor Corp. agreed to pay the largest auto safety fine in history for failing to recall 2.3 million vehicles for at least four months -- and the maximum allowable under law.
Separately, the company will announce a recall this afternoon of its 2010 Lexus GX 460, after it suspended sales last week on the heels of a rare "Don't Buy" rating from Consumer Reports, officials confirmed today.
Last week, Toyota was able to replicate a test conducted by the influential magazine that raised rollover concerns. The recall of about 5,000 vehicles is expected to include a software upgrade to address concerns about the electronic stability control.
This follows Toyota's recall on Friday of nearly 600,000 1998-2010 Sienna minivans to address potential corrosion in the spare tire carrier cable.
Federal officials said they continued to investigate Toyota's handling of recalls.
"By failing to report known safety problems as it is required to do under the law, Toyota put consumers at risk," Transportation Secretary Ray LaHood said of the automaker's agreement to pay the fine. "I am pleased that Toyota has accepted responsibility for violating its legal obligations to report any defects promptly. We are continuing to investigate whether the company has lived up to all its disclosure obligations."
The Japanese automaker has been in talks with NHTSA since Wednesday, as it won language in the agreement that would allow it to deny wrongdoing while paying the fine and putting the matter behind it. The deal says the payment is "without NHTSA making any formal findings with respect to Toyota's violations."
"We agreed to this settlement in order to avoid a protracted dispute and possible litigation," the company said. "We regret that NHTSA tentatively concluded that they should seek a civil penalty."
Toyota said it "made a good faith effort to investigate this condition and develop an appropriate counter-measure. 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."
Rep. Bart Stupak, D-Menominee, who will hold a new hearing on Toyota's woes next month, said Toyota was right to settle.
"NHTSA's $16.375 million civil penalty was firm, but fair given what we have discovered in our investigation of the Toyota recalls," Stupak said. "Toyota was wise not to contest the penalty and we will continue to monitor Toyota's response to consumer complaints."
The Detroit News obtained the four-page agreement signed by Toyota's general counsel, Christopher Reynolds, and its outside lawyer, Erika Z. Jones.
In the agreement, Toyota denies wrongdoing, but agreed to make the payment by electronic funds transfer to the U.S. Treasury within 30 days. The deal was also signed by NHTSA's general counsel, O. Kevin Vincent and NHTSA attorney David Case.
The $16.375 million fine for Toyota is the largest civil penalty ever assessed against an auto manufacturer by NHTSA over its sticky pedal recall issued on Jan. 21. Five days later under pressure from NHTSA, Toyota stopped sale of 60 percent of its vehicles in the United States because it didn't have a fix.
The fine is also the most allowed by law. If there wasn't a cap on fines, NHTSA said it could have assessed a $6,000 per vehicle penalty -- or $13.8 billion.
NHTSA Administrator David Strickland said in an interview Friday a higher cap on fines of "way more than $100 million" would be helpful as the agency negotiates with automakers.
On Feb. 16, NHTSA launched an investigation into the timeliness and scope of the three recent Toyota recalls and required the automaker to turn over documents and explanations related to its adherence to U.S. auto safety laws. NHTSA officials are continuing to review Toyota's statements and more than 120,000 pages of Toyota documents to determine whether the company has complied with all its legal obligations.
NHTSA could impose several additional fines over Toyota's handling of its recalls.
Toyota is expected to turn over at least another 100,000 pages of records today to comply with NHTSA's request for records into whether it recalled enough vehicles in its sudden acceleration recalls -- which include 5.4 million in the United States for pedal entrapment issues.
Auto manufacturers are legally obligated to notify NHTSA within five business days if they determine that a safety defect exists. NHTSA said it learned through documents obtained from Toyota that the company knew of the sticky pedal defect since at least Sept. 29, 2009, the agency said.
That day, Toyota issued repair procedures to its distributors in 31 European countries and Canada to address complaints of sticky accelerator pedals, sudden increases in engine revolutions, and sudden vehicle acceleration. The documents also show that Toyota was aware that consumers in the United States were experiencing the same problems, the agency said.
Toyota faces more than 200 civil lawsuits, along with a criminal investigation by the U.S. Attorney's Office in New York and a probe by the Securities and Exchange Commission in Los Angeles.
A House oversight panel is set to hold another hearing on May 6 into Toyota's conduct.