Toyota Agrees to Fork Over Record Fines of More than $32 Million

Toyota Motor Corp. has agreed to pay more than $32.4 million in penalties for failing to promptly notify regulators of safety defects in millions of vehicles, the Department of Transportation has announced.

The fines resolve two separate investigations and represent the maximum penalties available under federal law. They come on top of a $16.4  million fine imposed on Toyota in April over another delayed recall. All told, they bring penalties against the Japanese automaker to nearly $50 million this year.

The first of the newly-resolved investigations, which brought a $16.375 million fine, centered on the risk of Toyota floor mats trapping accelerator pedals.

Toyota recalled 55,000 vehicles over the floor mat problem in 2007. However, a deadly crash of a runaway Lexus in August, 2009, led to additional recalls of nearly 5 million Toyota cars and trucks to address problems of floor mat entrapment and sticking pedals. In February 2010, the National Highway Traffic Safety Administration, a branch of the transportation department, launched an investigation to determine when Toyota first learned of the pedal entrapment defect, and found that the company had violated a legal requirement to report safety defects within five days.

The second probe, which resulted in a fine of $16.05 million, involved steering rod problems in some Toyota trucks that could lead to a loss of control. The company initially told NHTSA that the problems were limited to trucks sold in Japan, but later reversed course and issued a recall for an estimated 1 million vehicles in the U.S. in 2005.

In May, however, NHTSA was alerted to additional information, including complaints from U.S. consumers, that Toyota had withheld when it first told the agency that a U.S. recall was unnecessary.

“Automakers are required to report any safety defects to NHTSA swiftly, and we expect them to do so,” said NHTSA Administrator David Strickland. “NHTSA acknowledges Toyota’s efforts to make improvements to its safety culture, and our agency will continue to hold all automakers accountable for defects to protect consumers’ safety.”

Toyota’s safety problems have been well documented over the past year, tarnishing a pristine image of reliability and safety. In the U.S., more than 10 million cars and trucks have been recalled due to safety defects.

Transportation Secretary Ray LaHood said he is “pleased that Toyota agreed to pay the maximum possible penalty and I expect Toyota to work cooperatively in the future to ensure consumers’ safety.”

“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’s chief quality officer for North America. “These agreements are an opportunity to turn the page to an even more constructive relationship with NHTSA and focus even more on listening to our customers and meeting their high expectations for safe and reliable vehicles.”

However, some safety advocates were unimpressed by the size of the penalties.

“This fine signals that the agency is going to use the maximum authority it has to go after these companies,” Joan Claybrook, a former head of NHTSA, told the Los Angeles Times. “But even a $32-million fine for a company like Toyota is meager, a pittance.”

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