Toyota Motor Corporation has agreed to pay a $16.375 million fine – the largest fine permitted by law – for failing to notify the National Highway Traffic Safety Administration (NHTSA) of a dangerous pedal defect for almost four months.
Under U.S. law, a company has five days to notify safety regulators that it has identified a serious defect. However, Toyota executives in the U.S. do not have the authority to actually recall vehicles. Instead, recall authority remains at corporate headquarters in Nagoya, Japan.
This penalty is for “sticky pedal” and “slow to return pedal” defects, which resulted in Toyota’s recall of approximately 2.3 million vehicles in the U.S. in late January. Other Toyota actions and potential coverups are still under investigation.
Critics contend that the fine is paltry, given the billions of dollars of profits that Toyota extracts from the U.S. market annually, and the seriousness of the offense.
“By failing to report known safety problems as it is required to do under the law, Toyota put consumers at risk,” said Secretary LaHood, who is responsible for NHTSA, where its lack of action in Toyota safety matters has also come under criticism.
“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,” said LaHood.
In a statement Toyota said , “We agreed to this settlement in order to avoid a protracted dispute and possible litigation, as well as to allow us to move forward fully-focused on the steps to strengthen our quality assurance operations.”
On February 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.
Criminal charges, though unlikely, remain possible.
In a Tokyo Stock Exchange (TSE) filing last February, Toyota Motor Corporation (TMC) that Toyota Motor Sales, U.S.A., Inc. (TMS) had received a grand jury subpoena from a United States District Court to produce documents related to unintended acceleration of Toyota vehicles and the braking system of the Prius.
TMC and TMS have also received a voluntary request and a subpoena, respectively, from the Los Angeles office of the United States Securities and Exchange Commission, seeking documents related to unintended acceleration of Toyota vehicles and the company’s disclosure policies and practices.