Toyota Record Fine

By: John Lester
04/20/2010 09:28 AM ET

Toyota record fine of $16.38 million is the largest civil penalty imposed on an automaker by the government. The company has agreed to pay the restitution but doesn’t agree with the violations. The U.S. Transportation Secretary, Ray LaHood, accuses car manufacturer of waiting more than four months to notify officials.

“By failing to report known safety problems as it is required to do under the law, Toyota put consumers at risk,” Ray LaHood said in a statement. “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 agreement is worded in a way that the car manufacturer will avoid admitting that it knowingly hid the defect. The company expects to pay the fine in 30 days. Shares of the company are slipping 0.5% to $78.98 on Tuesday morning trading.

2010 Lexus GX 460 SUV

The automaker was also moving to address more safety concerns. Toyota planned to recall the 2010 Lexus GX 460 to address a potential problem with the SUV rolling over. There hasn’t been any formal announcement made about the recall.

However, sources tell us that a recall will affect 6,000 vehicles that have been sold since the SUV went on sale in late December. Consumer Reports issued a “Don’t Buy” warning last week, saying the vehicle was susceptible to rolling over. The automaker responded by halting sales of new GX 460s and conducting tests on all of its SUVs.

Sticky Gas Pedals On Vehicles

The company first got evidence about sticking gas pedals in September but did not issue a recall until January. Automakers are required to notify the government within five business days of detecting a safety defect in vehicles. On February 16, the administration launched an investigation into the timeline and scope of Toyota recalls.

The government required Toyota to turn over documents and explanations related to its adherence to U.S. auto safety laws. The agency made a preliminary determination on the fine announced earlier this month based on a review of documents.

Auto Deaths Relating To Acclerator Problems

The government has linked 52 deaths to crashes allegedly caused by accelerator problems in Toyota vehicles. The car manufacturer attributes the problem to sticking gas pedals and accelerators that can become jammed in floor mats. It cited no evidence of an electrical problem.

The company has recalled more than six million vehicles in the United States and more than eight million worldwide. The acceleration problems involve multiple models and braking issues in the 2010 Toyota Prius hybrid. Car dealers have worked on 1.7 million vehicles under recall so far.

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