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Toyota to pay US government $16.4 million over recalls

American Government Special Collections Reference Desk

American Government Topics:  Toyota

Toyota to pay US government $16.4 million over recalls

Wikinews
April 19, 2010

Toyota has agreed to pay a record $16.4 million fine to the US government over allegations that the automaker concealed defects in its vehicles.

US Transportation Secretary Ray LaHood made the announcement Monday, saying in an e-mailed statement that "Toyota has accepted responsibility for violating its legal obligations to report any defects promptly." Toyota has still not admitted any wrongdoing, and said that it disagreed with the National Highway Traffic Safety Administration (NHTSA), which levied the fine against Toyota. In a statement, Toyota said it "denies N.H.T.S.A.’s allegation that it violated the Safety Act or its implementing regulations. We believe we made a good faith effort to investigate this condition and develop an appropriate counter-measure."

Toyota is still at risk of lawsuits from those affected by cars that crashed due to a safety defect in the accelerator pedal. Numerous such lawsuits have been filed, and analysts said that the total cost of the lawsuits could be upwards of two billion dollars in 2010, and possibly as much as ten billion in total. While the government fine is largely symbolic, as the amount was limited by US law, it could provide support for lawyers who are filing legal charges against Toyota. If the cap on the fine was not in place, Toyota would have been fined a total of $13.8 billion; each of the 2.3 million defective vehicles sold would have had a $6,000 fine.

Additionally, the NHTSA is reportedly considering a second fine, also of $16.4 million, based on evidence that there were two separate defects in the affected vehicles, and the company is facing an investigation from both the Justice Department and the Securities and Exchange Commission.

This article is licensed under the Creative Commons Attribution 2.5 License.

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