Toyota to pay $16m US fine over failures

City A.M. Reporter
Toyota yesterday agreed to pay a record $16.4m (£11bn) fine to US safety regulators to settle a complaint that the company delayed a recall over defective accelerator pedals, but denied violating US regulations.

Toyota said it had made a “good faith” effort to handle safety problems but decided to pay the penalty -- the maximum allowed by US law and the largest the regulator has ever sought -- “to avoid a protracted dispute and possible litigation”.

“We did not try to hide a defect to avoid dealing with a safety problem,” Toyota said in a statement.

US transportation secretary Ray LaHood said Toyota had put consumers at risk by failing to report safety problems related to the defective accelerator pedals and the department’s investigations continued. “I am pleased that Toyota has accepted responsibility for violating its legal obligations to report any defects promptly,” LaHood said.

Although the fine imposed by the National Highway Traffic Safety Administration is largely symbolic, it adds to the toll from a safety crisis that has cost Toyota billions of dollars in lost sales and forced it to resort to record incentives.

The fine and LaHood’s criticism may also provide additional ammunition to plaintiff lawyers looking to bolster legal claims against Toyota , which has recalled more than 8m vehicles worldwide for accelerator pedal defects and ill-fitting floormats that could cause unintended acceleration.

Toyota faces numerous lawsuits alleging consumer fraud and personal injuries over unintended acceleration in its vehicles. The company’s handling of safety issues is also under investigation by the US Securities and Exchange Commission and a grand jury in New York.

The automaker recalled 2.3m vehicles in January to fix faulty accelerator pedals.