Toyota Agrees to Record $32.4 Million in Fines
By Michelle Krebs December 21, 2010
As the most tumultuous year in its history of selling vehicles in the United States comes to a close, Toyota Motor Corp. has agreed to pay a record $32.4 million in fines -- the maximum that can be levied -- to settle two government investigations into its delay of recalling more than 6 million vehicles for potential problems.
The settlements with the U.S. National Highway Traffic Safety Administration (NHTSA), announced by Toyota and NHTSA late Monday night, involve Toyota's delay in issuing recalls dating back to 2005 to address possible problems with steering relay rods and from 2007 to early 2010 over potential for entrapment of the accelerator pedal by floor mats.
That brings the grand total of fines paid by Toyota so far this year to nearly $49 million this year, the most ever paid by an automaker in the United States.
The recalls and negative publicity have deeply damaged Toyota's once sterling reputation for bullet-proof quality, triggering a drop in Toyota's U.S. market share.
In November, despite beefier incentives than it usually offers, Toyota was the only automaker among the Big 6 to report lower sales than the dismal year earlier November. Its market share slid to just over 15 percent from more than 18 percent a year earlier.
"These agreements are an opportunity to turn the page to an even more constructive relationship with NHTSA," Steve St. Angelo, who was appointed Toyota's chief quality officer for North America this year in the wake of the recalls, said in the statement.
Said U.S. Transportation Secretary Ray LaHood in his statement: "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."
Toyota will pay $16.4 million for its delayed recall of nearly 5 million vehicles for pedal entrapment and $16 million for its 2005 recall of 980,000 million 4Runners and pickups for faulty steering rods that could lead to loss of steering control. In settling the fines, Toyota did not admit any wrongdoing.
In April, Toyota paid $16.4 million for a four-month delay in recalling 2.3 million vehicles for sticky pedals that could lead to sudden acceleration. The recall forced Toyota to stop selling most of its vehicles for a time.
Toyota still faces hundreds of civil lawsuits and a criminal investigation by a New York federal grand jury.
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