Toyota Has Agreed To a Record $16.4 Million Fine

[lino]

Reputation in jeopardy, Toytota hurries to recall Lexus SUVs, pay record federal recall fine

Mon Apr 19, 9:04 PM

By Ken Thomas, The Associated Press

WASHINGTON - Toyota has agreed to a record $16.4 million fine for its slow response to sticking gas pedals - the equivalent of a little more than $2 for every vehicle the company sold around the globe in 2009.

But the fine, the maximum under the law, could be simply a downpayment in the long run: The Japanese auto giant still faces dozens of private lawsuits, which have been combined before a federal judge in Santa Ana, California.

"In the court of public opinion, paying the fine speaks volumes. But at the end of the day, the fines are simply background noise in terms of the civil litigation," Richard Arsenault, a plaintiff's attorney in Alexandria, Louisiana, said Monday. "What's really important are the facts that were the catalyst for the fines."

Rushing to address new safety concerns, Toyota said it would recall all 9,400 of the 2010 Lexus GX 460s that went on sale in late December - 5,600 that have been sold and 3,800 still at dealers or elsewhere in the distribution pipeline. The announcement came less than a week after Consumer Reports issued a warning about the SUVs, a sharp contrast to the government's contention that Toyota took four months to order its huge recall of other models over sticking gas pedals.

For the Lexus recall, Toyota said dealers would update software in the stability control system, which is supposed to help prevent rollovers. Toyota already had halted sales of new GX 460s and begun tests on all of the company's other SUVs.

The government accused the company of hiding the earlier defects involving gas pedals, a contention Toyota rejected though it agreed to pay the fine.

Transportation Secretary Ray LaHood said Toyota "put consumers at risk" by failing to promptly notify authorities about potentially defective accelerator pedals on 2.3 million vehicles. LaHood said Toyota knew about the problem in late September but didn't issue the recall until late January, violating a federal law that requires an automaker to notify the government of a safety defect within five business days.

"They did not disclose within five days that there was a problem. They didn't disclose it for several months, so we fined them the maximum amounts and they decided to pay it and that means they knew they did something wrong," LaHood told reporters Monday in St. Louis. "They did try to hide it - that's what we accused them of - and they've agreed to that."

Toyota said it agreed to the fine to avoid a lengthy legal battle but denied the government's allegation that it broke the law. In a statement, Toyota 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."

The fine does not free Toyota from potential civil and criminal penalties. The automaker still faces dozens of personal injury and wrongful death lawsuits in federal courts while federal prosecutors and the Securities and Exchange Commission are conducting investigations related to the recalls.

Attorneys representing Toyota owners said the agreement was an attempt to limit the company's liability prior to numerous legal hearings.

"This is being treated like a speeding ticket or some other traffic fine," said attorney W. Mark Lanier of Houston. "The plea is essentially ... 'We'll pay as long as we don't have to admit guilt."'

In monetary terms, the penalty is largely symbolic, given Toyota's strong balance sheet. The company had cash assets of $23.6 billion as of Dec. 31 and has said it expects to post a net profit of $885 million for the fiscal year that ended March 31.

The previous record fine was $1 million paid by General Motors in 2004 for responding too slowly on a recall of nearly 600,000 vehicles over windshield wiper failure.

Toyota announced the recall to address sticking pedals in January, affecting popular vehicles such as the Camry and Corolla. The automaker has recalled more than 8 million vehicles worldwide because of acceleration problems in multiple models and braking issues in the Prius hybrid.

The fine was based upon timelines provided by Toyota that showed it had known about the defect at least since Sept. 29, 2009, when it issued repair procedures to distributors in 31 European countries to address complaints of sticking pedals, sudden increases in engine RPM and unexpected vehicle acceleration.

The documents also indicated that Toyota knew that owners in the U.S. had experienced the same problems.

The penalty is the largest the government could assess under a 2000 auto safety law enacted after a massive recall of Bridgestone/Firestone Inc. tires. Consumer advocates have pressed lawmakers to increase the penalties, arguing that they fail to act as a suitable deterrent.

Without the cap, government lawyers said Toyota could have faced fines of $13.8 billion, or $6,000 for each of 2.3 million vehicles that were sold with defective pedals.

Transportation officials have not ruled out additional fines. The department is reviewing whether Toyota delayed for six weeks the late January recall of the 2009-2010 Venza in the United States to address floor mats that could trap accelerator pedals after making a similar recall in Canada.

Toyota recalled the Venza in Canada in December and reported to the U.S. government on Dec. 16 that the floor mats could move forward and interfere with the pedal. Toyota told U.S. authorities at the time that the floor mats in question were not imported into the U.S. but the Venza was added to the floor mat recall in late January.

Source:http://ca.news.yahoo.com/s/capress/1004 ... ota_recall

[MinisterofDOOM]

As glad as I am to see Toyota facing consequences for their poor handling of the situation, I think that LaHood guy needs to dial back his inferral dial a bit.
This quote...

They did not disclose within five days that there was a problem. They didn't disclose it for several months, so we fined them the maximum amounts and they decided to pay it and that means they knew they did something wrong," LaHood told reporters Monday in St. Louis. "They did try to hide it - that's what we accused them of - and they've agreed to that.

...makes him sound like a fanatical nut job. They did NOT admit that they tried to hide it. They DENIED IT. And I suspect they'd have paid the fine even if they were not guilty, simply because it's cheaper than fighting the fine. I believe they did try and hide it (and even called that months before the recalls happened) but putting words in Toyota's mouth just makes LaHood look like a douche. They said what they said, not what he chose to infer.

[car nut]

Wait, so SUV's can flip over if you take a corner too fast? Who would've guessed

[seang]

Toyota tried to kill the metal, haha. But they failed, as they were thrown to the ground

[gwoods]

I'd like to fine Toyota for making my previous 2003 Camry with no personality. The 07 Sequoia we have now is not bad but all their cars have an appliance like feel to them. They tend to run forever with minimal repair but why no soul?

The 99 Corolla we had before the Camry had a little soul but only when rocketing around corners the rest of the time it was a tiny boring MPG machine!

[nissangirl74]

The governments fines are the least of Toyota's worries. The private lawsuits will be their downfall.

[lino]

Toyota to recall 870,000 Sienna 1998-2010 minivans

Toyota Motor Corp said on Friday it would recall 870,000 Sienna minivans sold in the United States and Canada since the 1998 model year because of a risk that the spare tire could drop into the road.

The recalls cover minivans sold in several cold weather US states and Canada due to potential corrosion from long term exposure to road salt that could in the worst case, cause the spare tire to separate from the vehicle, Toyota said.

All told, the recalls cover some 600,000 two-wheel drive Sienna minivans from the 1998 to 2010 model years sold or registered in certain cold weather US states and 270,000 of the same vehicles in Canada.

The recalls are the latest in a string that has marred Toyota's reputation for quality. On Tuesday, Toyota halted sales of its Lexus GX 460 luxury SUV after Consumer Reports said its handling in certain curves posed a "safety risk."

The automaker has not yet decided whether it would have to recall the Lexus GX 460, but has said its engineers duplicated the results of Consumer Reports' tests.

For the recalls announced on Friday, Toyota said the Sienna minivans should be inspected by dealers while Toyota develops a remedy. They said in the recalls that a cable holding the spare tire in place could fail due to corrosion.

US owners outside the cold weather states will receive a separate notice and may have their vehicles inspected and repaired if necessary at no charge as well, Toyota said.

The US recall covers the District of Columbia, Connecticut, Delaware, Illinois, Indiana, Kentucky, Massachusetts, Maryland, Maine, Michigan, Minnesota, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Virginia, Vermont, Wisconsin and West Virginia.

Source: http://www.moneycontrol.com/news/worldn ... 52160.html

[hannibal]

^ No Siennas from N and S Dakota, Montana, or Idaho on that list?

That $16.4M fine is a joke...

[nissangirl74]

Fine paid.

http://www.autoblog.com/2010/05/18/done ... gle+Reader

That satisfies their debt to the Treasury. Let the civil litigation begin.

[Red coupe]

^ No Siennas from N and S Dakota, Montana, or Idaho on that list?

That $16.4M fine is a joke...

Serious.
$16.4 million to a company who made 16.7 billion in 2008.
That is .1% of profits.

That is like if you make 60K a year, and got fined $60.

[nissangirl74]

You have to wonder what is going on in the minds of the top executives. Are they worried more about the current financial implications of their actions, the hit their reputation is taking, or what all of this will mean to the future of their company? What do you do first? Say you're sorry for the past or try to smooth the path of the future?

[MinisterofDOOM]

BOTH.

The problem is Toyota has done neither.
They only take as much responsibility as they're forced to, and then only make reparations as far as they're forced to.

[Red coupe]

BOTH.

The problem is Toyota has done neither.
They only take as much responsibility as they're forced to, and then only make reparations as far as they're forced to.

What is crazy is we were talking about this last time I was home... My brother, who isn't into cars and doesn't really follow cars, says Toyota has done a good job handling the situation and has a positive view of the whole event.

[MinisterofDOOM]

BOTH.

The problem is Toyota has done neither.
They only take as much responsibility as they're forced to, and then only make reparations as far as they're forced to.

What is crazy is we were talking about this last time I was home... My brother, who isn't into cars and doesn't really follow cars, says Toyota has done a good job handling the situation and has a positive view of the whole event.

Yeah, my mom (who also isn't into cars, but spends enough time around my dad and I to have a pretty informed view of the industry) was telling me how she was talking with some of her coworkers about it, and most of them were convinced the whole thing was being blown out of proportion in a conspiracy by the feds to improve things for the American automakers that they now have a stake in.

People are idiots. And Toyota merely has to put out ads claiming they care for people to believe it. It's a joke.

[elwesso]

honestly i think toyota had a lot of this coming.. I think everyone here can agree that within the last 5-8 years their quality has severely decreased.. They are not making the bulletproof cars like they used to, but everyone THINKS they are..

at 16 million fine is nothing for toyota... it would be like one of us fighting a $25 seat belt ticket, just pay and move on...

Kinda reminds me of GM in the 80s, when they were building crappy cars but everyone was too stupid not to buy them...

[MinisterofDOOM]

honestly i think toyota had a lot of this coming.. I think everyone here can agree that within the last 5-8 years their quality has severely decreased.. They are not making the bulletproof cars like they used to, but everyone THINKS they are..

Absolutely. There's an observable period from about 1998 to around 2002 where things really started going south for Toyota quality as they slowly replaced their lineup. They dumped everything fun from their lineup, and as new generations replaced their standby family cars the focus shifted from quality to sales volume. Go drive a 2001 and 2002 Camry back to back and you'll see what I mean.

[Jesda]

I agree 100% with everything stated so far in this thread.