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U.S. seeks $16.4 million fine against Toyota

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U.S. seeks $16.4 million fine against Toyota

http://i2.cdn.turner.com/money/2010/...ota.gi.top.jpgFederal safety agency hits Toyota with largest possible fine for a single reporting violation. More fines still possible.by Peter Valdes-Dapena, senior writerApril 5, 2010: 7:26 PM ET

NEW YORK (CNNMoney.com) -- The Department of Transportation's National Highway Traffic Safety Administration is seeking the maximum fine of $16.4 million against Toyota Motor Corp. for failing to notify the agency of a "sticky pedal" defect in its cars for at least four months.
Under federal regulations, automakers are required to inform the agency within five days of determining that a safety defect exists in one of its products.

NHTSA learned, through documents obtained from Toyota (TM), that the automaker knew of sticky gas pedal problems since at least September, 2009, the agency said in an press release.

"We now have proof that Toyota failed to live up to its legal obligations," said Transportation Secretary Ray LaHood. "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. For those reasons, we are seeking the maximum penalty possible under current laws."

0:00 /2:25Toyota's fix hard to sell
NHTSA is still investigating to see if Toyota committed any additional violations that may warrant more penalties, the agency said. Under federal regulations, $16.4 million is the most an automaker can be fined for a single violation.
Toyota said it has not received a letter from the NHTSA about the fine, but responded to the announcement by saying the company has begun to address the agency's concerns.
"We have already taken a number of important steps to improve our communications with regulators and customers on safety-related matters as part of our strengthened overall commitment to quality assurance," the company said in a statement. "These include the appointment of a new Chief Quality Officer for North America and a greater role for the region in making safety-related decisions."
GM to expand use of brake override system
Toyota cars and trucks have been the subject of at least three separate major recalls in the past year. One was for the "sticky pedal" situation in which gas pedals, as they age, begin to stick in a partially depressed position. Another was for gas pedals that can stick on some floor mats and a third was for braking problems on Toyota Prius hybrid cars.
The biggest fine that's ever been levied was just $1 million taken from General Motors in 2004 for failing to deal promptly with a windshield wiper issue, an amount that was negotiated down from the $3 million NHTSA originally asked for.
Toyota could challenge the penalty and question how the NHTSA determined the record amount, especially since the difference between Toyota's and GM's fines is so large, said senior analyst Jessica Caldwell of automotive Web site Edmunds.com.
"It'll be interesting to see how Toyota responds," she said. "But $16.4 million is a drop in the bucket of cash Toyota has, so they might just find it easier to pay and avoid a bigger news story."
It also strikes experts as odd that regulators would seek the maximum penalty in a case in which the specific defect involved resulted in no serious crashes, injuries or deaths. "I see this as politically motivated," said Ed Higgins, a Michigan attorney who has worked with automakers in defect cases. "NHTSA is under a lot of political pressure to get tough."
In documents filed with NHTSA, Toyota has indicated that it did not originally believe the sticky gas pedals were a genuine safety issue. At worst the pedals got stuck only an inch or so down resulting in a situation the driver could easily control using the brakes.
That belief gives Toyota a ready defense, Higgins said. The regulations state that the automaker has five days from the time it determines a safety-related defect exists to report it. If Toyota didn't see this as safety related, Higgins said, the clock wasn't running.
There were injuries and deaths alleged to result from a separate issue in which gas pedals could become stuck on floor mats. NHTSA has not announced a fine in that recall. http://i.cdn.turner.com/money/images/bug.gif

http://money.cnn.com/2010/04/05/auto...ta_nhtsa_fine/

So pretty much US wants money & screw Toyota (Japan). If Toyota pay this fine and go bankrupt you know how many US Toyota employee gonna go unemployed? Are they want to do same thing as GM, Chrysler & Ford.

What they gonna do w those money? Nothing, it just gonna go to their pocket and nothing gonna change/improved. They think giving them the fine gonna improve Toyota's safety in the future? NHTSA are just full of morons!

The fall in sales will do infinitely more for Toyota's motivation to fix problems than any fine will.

I dont think $16 Million is going to cripple the multibillion dollar company but I would rather see the government have them allocate all that money into safety test or something with car that will be brought to the US market, even if they don't need $16m to complete the tests.

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April 11, 2010, 4:36 a.m. EDT ·

Toyota may face more recall-related fines: reports

TEL AVIV (MarketWatch) -- Toyota Motor Corp. may be facing additional fines on top of the $16.4 million U.S. regulators assessed because the Japanese automaker took too long to notify them that certain accelerator pedals were defective, weekend media reports say.

The National Highway Traffic Safety Administration may seek the additional penalty because Toyota indicated that the pedals contained two separate defects, the reports say.

Toyota recalled the cars with the defective accelerator pedals in January after consumers said their vehicles were accelerating out of control.
The company recalled 2.3 million vehicles at least four months after it had recognized the safety defects, the reports say.

The $16.4 million fine was the maximum that the regulators were allowed to demand from Toyota under U.S. law, the reports say. But for that cap, Toyota could have faced a fine of $13.8 billion based on the number of cars times the law's $6,000-a-car penalty for safety defects, the reports say.

Toyota has until April 19 to respond to the traffic-safety agency; it has not yet indicated whether it will accept or contest the initial fine, the reports say.

Separately, U.S. District Judge James V. Selna in Santa Ana, California, has been named to hear more than 200 lawsuits filed in the U.S. against Toyota, media reports say.

The lawsuits include complaints that seek class-action status and others filed on behalf of individuals, the media reports say.
Toyota and lawyers for consumers had requested March 25 that the federal lawsuits be combined so that one judge would oversee them and decide issues of evidence and legal argument, Bloomberg Business Week reported.

Judge Selna has extensive experience with litigation that crosses U.S. districts, including a patent dispute between Qualcomm and Broadcom and a class action brought against the personal-computer maker eMachines, The Wall Street Journal reported.

Robert Daniel is MarketWatch's Middle East bureau chief, based in Tel Aviv.

(The Wall Street Journal)
http://www.marketwatch.com/story/toy...rts-2010-04-11

I know Toyota is rich, but so does everyone else.

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Originally Posted by Myka (Post 13732)

(The Wall Street Journal)
http://www.marketwatch.com/story/toy...rts-2010-04-11

I know Toyota is rich, but so does everyone else.

Ok, it's getting ridiculous. They tall the fine to over 13 billions, what is the point? If it was Toyota's fault so is the NHTSA's. What about Ford Firestone, GM cars that would burst into flame? or it's what people say " You can sue everything in the US".

Its all about the money.

And this entire Toyota fiasco needs to end. Like I said in another thread, the government that now has private stake in one of the largest U.S. automaker companies (GM) is now creating huge (still not completely confirmed) hype over Toyota and its accelerator / brake issues.

Yeah, no coincidence in my eyes.