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April 6, 2010

JAPAN/US: Japan diplomatic over US Toyota fine plans

The Japanese government on Tuesday gave a muted reaction to US plans to impose a fine on Toyota Motor over its handling of recalls for vehicles with defective gas pedals.

The Japanese government on Tuesday gave a muted reaction to US plans to impose a fine on Toyota Motor over its handling of recalls for vehicles with defective gas pedals.

The US move was ”based on laws in the United States, and therefore it is difficult for the Japanese government to make any direct comment,” Japanese economy, trade and industry minister Masayuki Naoshima told reporters.

US Transportation Secretary Ray LaHood on Monday said the National Highway Traffic Safety Administration (NHTSA) was seeking the maximum civil penalty of US$16.375m against Toyota Motor Corporation for failing to notify the auto safety agency of the dangerous “sticky pedal” defect for at least four months, despite knowing of the potential risk to consumers. Approximately 2.3m vehicles in the US were recalled in late January for the sticky pedal defect. The penalty being sought against Toyota would be the largest civil penalty ever assessed against an auto manufacturer by NHTSA.

Auto manufacturers are legally obligated to notify NHTSA within five business days if they determine that a safety defect exists. NHTSA learned through documents obtained from Toyota that the company knew of the sticky pedal defect since at least 29 September, 2009. That day, Toyota issued repair procedures to their distributors in 31 European countries and Canada to address complaints of sticky accelerator pedals, sudden increases in engine RPM, and sudden vehicle acceleration. The documents also show that Toyota was aware that consumers in the United States were experiencing the same problems.

“We now have proof that Toyota failed to live up to its legal obligations,” said LaHood. “Worse yet, they knowingly hid a dangerous defect for months from US 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.”

NHTSA is still investigating Toyota to determine if there are additional violations that warrant further penalties.

Naoshima stressed the Japanese government would watch Toyota’s reaction. ”The (most important) point is whether Toyota can recover consumers’ trust in the safety” of its products, the minister said.

Seiji Maehara, minister of land, infrastructure, transport and tourism, said in a separate press conference: ”I hope that Toyota will take safety matters seriously and live up to its global reputation.”

Toyota said in a statement: “we understand that NHTSA has taken a position on this recall. 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.  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.”

The statement did not suggest Toyota would contest the proposed fine.

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