Toyota agrees to pay $32.4 million in civil penalties over handling of recalls

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Toyota agrees to pay $32.4 million in civil penalties over handling of recalls

2010-12-21 12:04:17 GMT+7 (ICT)

WASHINGTON, D.C. (BNO NEWS) -- Toyota Motor Corp. on Monday announced that it has reached two settlement agreements with the U.S. National Highway Traffic Safety Administration (NHTSA) to pay $32.425 million in civil penalties.

The civil penalties are related to the timeliness of recalls conducted by the company in 2005 to address potential concerns with steering relay rods and from 2007 to early 2010 to address the potential for pedal entrapment by unsecured, incompatible or improperly installed floor mats. 

Toyota will pay the maximum fines allowable under the law - $16.375 million in one case and $16.050 million in the other - in response to the Department's assertion that it failed to comply with the requirements of the National Traffic and Motor Vehicle Safety Act for reporting safety defects to the NHTSA.

The first investigation completed on Monday and resulted in the $16.375 million fine and involved Toyota's recall of nearly five million vehicles with accelerator pedals that can become entrapped by floor mats, the NHTSA said.

As its initial remedy, Toyota recalled 55,000 all-weather floor mats on September 26, 2007. However, in August 2009, a fatal crash in Santee, California occurred as the result of pedal entrapment in a loaner Lexus equipped with an all-weather floor mat intended for another Lexus model.

After the fatal crash, NHTSA reviewed crash evidence and other data and found that removing floor mats was insufficient as there was a need to redesign the accelerator pedal.

Toyota then conducted a recall for 3.8 million Toyota and Lexus vehicles for floor mat entrapment on October 5, 2009. The October recall was expanded on January 27 to include another 1.1 million vehicles.

"Safety is our top priority and we take our responsibility to protect consumers seriously," said U.S. Transportation Secretary Ray LaHood. "I am pleased that Toyota agreed to pay the maximum possible penalty and I expect Toyota to work cooperatively in the future to ensure consumers' safety."

The second investigation completed resulted in a $16.050 million fine in which NHTSA investigated whether Toyota properly notified the agency of a safety defect in several Toyota models that could result in the loss of steering control.

In 2004, Toyota conducted a recall in Japan for Hilux trucks with steering relay rods prone to fatigue cracking and breaking, causing the vehicle to lose steering control.

At that time, Toyota informed NHTSA that the safety defect was isolated to vehicles in Japan and that the company had not received such field information from the United States.

In 2005, however, Toyota said that the steering relay rod defect was present in several models sold in the United States and then conducted a recall for nearly one million vehicles. In May, NHTSA was alerted to additional information, including complaints from U.S. consumers.

"Toyota is pleased to have resolved these legacy issues related to the timeliness of prior recalls dating back to 2005," said Steve St. Angelo, Toyota's Chief Quality Officer for North America. "All 30,000 of our U.S. team members, and the tens of thousands of Americans at dealers and suppliers across the country, have worked very hard over the past year to put these issues behind us and set a new standard of responsiveness to our customers."

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