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Late fault calls fine Toyota $17m

2012-12-18 19:13

RUNNING ON THE QUIET: Late reporting on the Lexus RX350h was one of the cars that cost Toyota US a giant fine.

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2012 Lexus at SEMA show

2012-11-01 07:39

2012 Lexus at SEMA show

DETROIT, Michigan - The US government has hit Toyota with a record $17.4-million fine for failing once again to quickly report problems to federal regulators and for delaying a safety recall.

The fine against the world's biggest automaker imposed by the National Highway Traffic Safety Administration, the agency that monitors US vehicle safety, is the maximum allowed by law. It's the fourth levied on Toyota in two years for similar infractions and the largest single fine yet assessed against a car company for safety defects.

In 2010 Toyota paid a total of $48.8-million in fines for three violations.

MAX FINE TO DOUBLE

The latest infraction raises questions about whether the fines are big enough to deter automakers from withholding information from the NHTSA and whether the government agency can do enough to stop repeat offences. The fine, announced on Dec 18 20121, is a tiny fraction of Toyota's earnings. The company posted a $3.2-billion profit in just the third quarter of 2012.

In 2013 the maximum fine the NHTSA can assess will double to $35-million

Toyota said it agreed to pay the penalty without admitting any violation. It also pledged to strengthen data collection and evaluation to make sure it takes action more quickly.

Ray Tanguay, the company's chief quality officer, said in a statement: "We agreed to this settlement to avoid a time-consuming dispute and to focus fully on our shared commitment with the NHTSA to keep drivers safe."

A spokesman at the Toyota's US offices did not answer further questions.

The latest fine stems from a June 2012 recall of SUV's from Toyota's Lexus brand. About 154 000 of the 2010 Lexus RX350s and RX 450h models were recalled because the driver's-side floor mat could trap the accelerator and cause the vehicle to accelerate without warning. The problem was similar to troubles from 2010 that prompted a series of embarrassing safety recalls by the company.

Toyota has recalled more than 14-million vehicles globally to fix sticky accelerator pedals and mats and so tarnished the company's sterling reputation for reliability and cut into sales. Recently, however, sales rebounded as it appeared to put the safety problems in the rear-view mirror.

But the NHTSA said Toyota failed to report acceleration problems in the Lexus SUV's within five business days of discovery, as required by US law. The agency said it began investigating the SUV's early in 2012 after receiving complaints. In May 2012 the agency contacted Toyota about the problem and it took the company a month to report 63 incidents of trapped accelerators, the agency said.

In an August 2012 interview Jim Lentz, Toyota's most senior US executive, told The Associated Press that the company was obeying the law in giving information to the NHTSA.

In 2010, Toyota paid two $16.4-million fines and one $16-million, each for reporting violations. The NHTSA said at the time that the company didn't report problems with sticking pedals in a timely manner; neither did it report problems with mats trapping pedals. Toyota also told the NHTSA that a recall of commercial trucks in Japan for a steering problem did not affect US vehicles - but a year later similar vehicles in the US were recalled.

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