View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. News
April 12, 2010

US: Toyota may be hit with second large recall fine

US safety regulators may seek a second penalty against Toyota Motor for knowingly delaying a massive recall over defective accelerator pedals, after imposing a record US$16.4m fine against the automaker a week ago (5 April), weekend media reports in the US said.

US safety regulators may seek a second penalty against Toyota Motor for knowingly delaying a massive recall over defective accelerator pedals, after imposing a record US$16.4m fine against the automaker a week ago (5 April), weekend media reports in the US said.

The National Highway Traffic Safety Administration, in a 5 April letter to Toyota, said the recall of 2.3m vehicles in January for faulty accelerator pedals came at least four months after the automaker had determined there were safety defects in the vehicles, Reuters said.

NHTSA may pursue a second fine based on documents submitted by Toyota, which indicated there were two separate defects in the recalled pedals, the letter showed. The agency said Toyota would have faced a fine totalling $13.8bn if not for caps set by US law.

The proposed $16.4m civil penalty against Toyota is the maximum allowed by US law and the largest that the US Department of Transportation has ever sought, the news agency noted.

“Here, the gravity of Toyota’s apparent violations is severe and potentially life-threatening,” NHTSA chief counsel Kevin Vincent said in the letter, a copy of which was reviewed by Reuters.

US law allowed a $6,000 penalty for each defective vehicle sold by Toyota, totalling $13.8bn. Due to a law that limits individual fines against a manufacturer, the maximum the government could seek was $16.375m, Vincent said in the letter.

Toyota has until 19 April to decide whether to appeal that penalty for the first official finding that the world’s largest automaker violated US safety regulations.

“If Toyota will not agree to pay the demanded penalty, NHTSA will refer this matter to the US Department of Justice with the recommendation that the Attorney General commence a civil action in federal court …,” Vincent said.

The New York Times first reported the NHTSA letter.

Automakers are legally obligated to tell US safety regulators within five days if they determine a safety defect exists.

US safety regulators said in proposing the record fine against Toyota on Monday that the automaker’s own records showed that it had issued repair notices for the sticky pedal problem in Canada and Europe in September but did not take action in the US until January.

The agency continues to investigate Toyota recalls, including one in October 2009 for floor mats that can jam the gas pedal and cause uncontrolled acceleration, Reuters added. NHTSA has said that additional fines are possible.

Previously, the largest fine was $1m against General Motors for failing to promptly recall 2002-2003 model vehicles to fix faulty windscreen wipers.

NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. The top stories of the day delivered to you every weekday. A weekly roundup of the latest news and analysis, sent every Monday. The industry's most comprehensive news and information delivered every quarter.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU

Thank you for subscribing to Just Auto