Toyota Motor Corp was expected to agree to a fine of more than US$16 million yesterday for failing to promptly report to the government problems with sticking gas pedals on its vehicles, a US Department of Transportation official said.
Yesterday was the deadline for Toyota to accept or contest the US$16.4 million fine, the largest ever assessed by the government against an automaker, over evidence it knew about the defective gas pedals in September but did not issue a recall until January.
Under federal law, automakers are required to notify the government within five business days when they find a potential safety defect.
The official said Toyota was expected to pay the full amount of the fine within 30 days as a way of avoiding going to court against the government. The official was not authorized to speak publicly and spoke on condition of anonymity.
The official said Toyota did not intend to admit wrongdoing explicitly, but the company still faces dozens of personal injury and wrongful death lawsuits in federal courts. Federal prosecutors and the Securities and Exchange Commission are conducting investigations related to the recalls.
From the government’s viewpoint, the official said, the agreement to pay the full fine constituted an acceptance of responsibility for hiding the safety defect in violation of the law.
Toyota declined to comment on the fine.
Toyota announced it would recall 2.3 million vehicles in January to address sticking pedals on popular vehicles such as the Camry and Corolla. The Japanese automaker has recalled more than 8 million vehicles worldwide because of acceleration problems in multiple models and braking issues in the Prius hybrid.
The fine was based upon timelines provided by Toyota that showed it had known about the sticky pedal defect at least since Sept. 29, when it issued repair procedures to distributors in 31 European countries to address complaints of sticking pedals, sudden increases in engine RPM and sudden vehicle acceleration.
The documents also indicated that Toyota knew that owners in the US had experienced the same problems.
Toyota has been weighing its options since the fine was announced early this month, but analysts expected it to pay the penalty.
“When you look at the toll it’s taken on Toyota’s reputation, when you look at the number of vehicles involved, when you look at the hardship it’s placed on Toyota’s customer base, it’s only right for Toyota to take this fine,” said Dennis Virag, president of Automotive Consulting Group based in Michigan.
The penalty is the largest the government can assess under law.
Without the cap, US government lawyers said Toyota could have faced fines of US$13.8 billion, or US$6,000 for each of 2.3 million vehicles that were sold with defective pedals.
Transportation officials have not ruled out additional fines. The department is reviewing whether Toyota delayed for six weeks the late January recall of the 2009-2010 Venza in the US to address floor mats that could entrap the accelerator pedal after making a similar recall in Canada.
Toyota recalled the Venza in Canada in December and reported to the US government on Dec. 16 that the floor mats could move forward and interfere with the pedal. Toyota told US authorities at the time that the floor mats in question were not imported into the US but the Venza was added to the floor mat recall in late January.
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