• Apr 6, 2010
Ray LaHood and NHTSA announced that they will fine Toyo... Ray LaHood and NHTSA announced that they will fine Toyota more than $16 million (merfam, Flickr)

U.S. officials will seek over $16 million in civil fines against Toyota for "knowingly hiding a dangerous defect" from the agency and American consumers. Department of Transportation Secretary Ray LaHood announced the penalty on Monday via the agency's website.

"We now have proof that Toyota failed to live up to its legal obligations,” said LaHood’s statement. "Worse yet, they knowingly hid a dangerous defect for months from U.S. 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."

The penalty, which Toyota has 2 weeks to dispute, focuses on “sticky” gas pedals, which NHTSA says Toyota knew about for four months before alerting government officials. Auto manufacturers are legally obligated to notify the agency within five business days if a safety defect exists. The sticky pedal recall now includes 2.3 million vehicles in the U.S., including the popular Camry sedan as well as eight other vehicles.

"NHTSA learned through documents obtained from Toyota that the company knew of the sticky pedal defect since at least September 29, 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."

Toyota has provided tens of thousands of pages of information to NHTSA related to the recalls and safety concerns over the company's products, which the agency says it continues to analyze. NHTSA has not ruled out introducing separate penalties; the $16.375 million penalty levied this week only includes the pedal recall.

Toyota has not yet seen the letter indicating the penalty from NHTSA.

"While we have not yet received their letter, we understand that NHTSA has taken a position on this recall," the company said via a statement on their media site. "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."

Small Fine, But Could Increase Toyota's Liability

While the penalty won't hurt Toyota's bottom line ($16 million would represent a small fraction of the company's marketing budget), it indicates that LaHood's agency is under as much pressure as Toyota itself.

The new, stronger stance by U.S. officials and this week's fine could prove to be a guidebook for the current and future lawsuits presented to Toyota by plaintiff attorneys around the world. According to analysis done by Bloomberg, Toyota currently faces 177 consumer and shareholder lawsuits seeking class-action status and 56 lawsuits claiming personal injuries or death caused by sudden acceleration.

Toyota's recall problems did not seem to affect its ability to sell cars in March, however. The company was up 41 financing offered on some vehicles.

Whether or not Toyota will continue to offer deep discounts on its products in order to keep sales afloat remains to be seen, but in terms of pure market share Toyota has not fallen off a cliff as some posited earlier in the year.

"We are standing by our cars, and we're grateful that our customers are standing by Toyota," said Senior Vice President of Toyota Motor Sales Don Esmond last week.



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  • 176 Comments
      Prn13Norm
      • 8 Hours Ago
      Toyota is being punished by the Obama administration for being NON-UNION. I will never again buy a UNION made car!
      Paula
      • 8 Hours Ago
      Goverment Should just shut there Mouths I never seen them go after any other Car company like they do w/ Toyota Reason cause They didn't need to bail there asses out like other company's and they don't have Stock in them SO THEY RAG ON TOYOTA I myself am SICK OF THE GOV. HAVEN'T THEY SCREWED UP OUR LIFES ENOUGH. I own 3 Toyota's and NEVER HAD 1 PROBLEM W/ THEM Half these People who Say they have had are LIARS they want to make a quick buck just like the Theifs in Washington
      BMKOLKA
      • 8 Hours Ago
      I saw Obama and the U.A.W put bubble gum on Toyota's gas pedals. Get a life people, it is not there fault Toyota builds crap and are liars that could care less about America. I will miss Toyota when they are gone NOT...
      • 8 Hours Ago
      I have had very good luck with Volkswagon autos as well
      bainbridgeracing
      • 8 Hours Ago
      AWWWW poor Japs
      floatgod
      • 8 Hours Ago
      They're coming to get us! there's one under every bed! They're JAPS! And they make good cars! What are we to do? I know, write about Pearl Harbor and WW2, that'll make Americans buy American cars. RFLMAO, quality and value sell cars, not slogans. Get a life.
      zanytothemaxx
      • 8 Hours Ago
      Toyota says a $16 million fine will not stop it's invasion of the US. They want to finish what they started on Dec. 7, 1941 and they want German auto manufacturers to help them. You have to jump through hoops to get an American made car into Japan......but in the US buyers bow down to Japans emperior and give thanks for their Toyota.
      • 8 Hours Ago
      good evening to all and God Bless !
      chvy70camaro
      • 8 Hours Ago
      awesome Cutlass! i remeber my parents owning a '76 and a '73 brand new when i was a kid, but sadly neither had a 455 in them!
      chvy70camaro
      • 8 Hours Ago
      i think they've gotten better lately though, glasss
      • 8 Hours Ago
      hey oldscutt, fair warning, get ready for the tranny to go out on your truck. you've just reached tranny time probs at 70,000
      ravatar252
      • 8 Hours Ago
      Thats the cost of doing business in the U.S. It'll end up as a tax write off someplace. But, why coddle them, if they pull a fast one, and get caught, too bad. Sooooo sad,, (not really. ) the glamor of quality is more mist and fog than reality. Toyota has worked to build the perception in the buying public that their cars are substantially superior to others in the Global market place. This may be true in some Countries, but not in the U.S. In truth, Japanese cars and American cars are at the same level of quality for comparable models. As to pricing, The Japanese car companies utilize a little know segment of their society as low cost labor. The underclass of Japan known as "Burakumin " and alternatively as the "Eta" The term eta is written with two ideograms which mean "much impurity" or "much dirt." Another term used to describe this group is hisabetsu buraku, or "discriminated communities." These people work for minimal wages, and live in what amount to ghettos, even to this day. One might wish to research these matters before buying a Japanese vehicle.
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