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U.S. officials: More fines possible against Toyota

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U.S. officials: More fines possible against Toyota



WASHINGTON – U.S. auto safety regulators may pursue a second fine against Toyota over hiding information about sticking accelerator pedals in 2.3 million vehicles, after setting a $16.375-million fine on Monday.

In its official notification to Toyota obtained by the Free Press, the National Highway Traffic Safety Administration accused Toyota of concealing its testing of the problem and changes made in overseas models from regulators last year, admitting to only complaints from U.S. owners.

The agency also said the Japanese automaker would have faced a fine totaling $13.8 billion were it not for caps set by U.S. law on NHTSA penalties.

The automaker had exposed “millions of American drivers, passengers and pedestrians to the dangers of driving with a sticking accelerator pedal,” NHTSA Chief Counsel O. Kevin Vincent wrote.

“There can be no reasonable dispute that Toyota’s initiation of this recall was untimely.”

Toyota has until April 19th to respond to NHTSA, and has not indicated whether it will accept the fine or contest it, which would trigger a lengthy legal battle with the U.S. government.

NHTSA said it could issue another fine depending on whether it decides the problems with sticking pedals are technically two separate defects, based on the manufacturing changes made by Toyota.

The agency has two other probes under way into Toyota’s recall of 5.4 million vehicles for floor mats that could trigger sudden acceleration and its general handling of sudden acceleration complaints; each of those probes could also generate additional fines.

The agency announced the fine on Monday after finding that Toyota told dealers in 31 European countries in September 2009 about problems with the pedals that could lead to sudden acceleration, but didn’t launch a recall in the United States until Jan. 21, and only then under pressure from NHTSA.

NHTSA’s investigation, which has generated some 70,000 documents from Toyota, has shown the automaker was struggling with the problem since July 2006, when the owner of a Toyota Avalon sedan first reported it, and more complaints about the pedals made by CTS Corp. arrived in 2007.

Toyota and CTS changed the materials used to build the pedals in production twice — once in January 2008, and again in July of last year for European models. In June 2009, it told dealers in the United Kingdom to replace the CTS pedal with one made by Denso.

On Sept. 29, it told dealers in 31 European countries how to handle customer complaints of sticking pedals that could lead to “sudden engine RPM increases and/or sudden vehicle acceleration.”

In October, Toyota ordered a production change for pedals in RAV4 sport utility vehicles similar to one made for European vehicles, but then canceled it.

“Toyota gave this instruction despite the fact that it had issued similar or identical instructions in Canada and Europe and knew that the very same issues that prompted the European and Canadian actions existed on a significant number of vehicles in the United States,” NHTSA said.

NHTSA said Toyota did not reveal the full extent of its troubles with sticking accelerator pedals until Jan. 19, two days before the recall. After announcing the recall, Toyota kept selling vehicles already built until it halted sales under pressure by NHTSA on Jan. 26.

Under federal law, once automakers find a safety defect they have five days to issue a recall.

By law, the maximum NHTSA can fine any automaker for delaying a recall is $16.375 million. The agency told Toyota that if this cap weren’t in place, the automaker would be liable for a $6,000 fine on every one of the 2.3 million cars and trucks covered by the recall, or $13.8 billion.

Toyota's former top U.S. public relations executive warned just before the recall in January that the automaker needed to "come clean" about sticking accelerator pedals that could trigger sudden acceleration, and that it "was not protecting our customers by keeping this quiet."

The e-mail obtained by the Free Press on Thursday was in reply to a message from a Japanese colleague to another Toyota public relations executive saying, "We should not mention" the accelerator pedal failures because "we have not clarified the real cause" and mechanical failures "might raise another uneasiness of customers."

Toyota said on Thursday that “we have publicly acknowledged on several occasions that the company did a poor job of communicating during the period preceding our recent recalls.”



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U.S. officials tally $13.8 billion in fines against Toyota

04/09/2010, 8:05 PMBY MARK KLEIS

NHTSA has already levied a $16.4 million fine against Toyota, the largest legally possible, but now officials are seeking further fines. NHTSA also said that without limitations, to date the fines that would have been levied against Toyota would have totaled a staggering $13.8 billion.

As outlined in NHTSA’s official notification to Toyota, obtained by Free Press, Toyota is being fined as a result of failing to disclose multiple known safety defects of its vehicles, well beyond the legally required time frame.

The letter from NHTSA to Toyota says that Toyota concealed its problems which were identified and addressed in global markets, but not in the U.S. Based on the illegal actions the automaker took, NHTSA says it has tallied $13.8 billion in fines that it could have otherwise imposed against the Japanese automaker, had other U.S. law not limited its actions pertaining to any one issue to $16.4 million.

NHTSA officials are however still pursuing the possibility of additional fines based on the fact that unintended acceleration problems stemmed from what may be deemed multiple sources. One known cause was from faulty floor mats, while other cases stemmed from sticking accelerator pedals. As a result, NHTSA says it is still deciding whether or not it will issue another round of fines.

Toyota has not yet announced how it will approach the existing fine of $16.4 million, with the April 19, 2010, deadline fast approaching. Toyota can choose to accept and pay the fine, or fight the fine in federal courts with the U.S. safety agency.

NHTSA says the $13.8 billion fine total was derived from the normal $6,000 fine imposed on each of the 2.3 million vehicles produced under the recall.



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