Toyota agrees to pay $32 million fine for safety problem

Toyota will pay $32.4 million as a penalty for unintended acceleration and steering problems in severeal models

Toyota Motor Corp has agreed to pay $32.4 million in fines related to two investigations of the automaker's handling of auto recalls for unintended acceleration and steering problems in several models, U.S. regulators said on Monday.
The settlements, confirmed by Toyota, conclude a tumultuous year for the Japanese automaker in Washington over the recalls of 11 million vehicles and disclosure of safety problems that prompted unprecedented government scrutiny, a total of three heavy fines, and a loss of prestige and consumer confidence in its best-selling brands.
"I am pleased that Toyota agreed to pay the maximum possible penalty and I expect Toyota to work cooperatively in the future to ensure consumer safety," Transportation Secretary Ray LaHood said in a statement that accompanied the late night announcement.
Toyota, the world's largest automaker, said it agreed to the National Highway Traffic Safety Administration (NHTSA) fines without admitting any violation of law.
"These agreements are an opportunity to turn the page to an even more constructive relationship with NHTSA and focus even more on listening to our customers and meeting their high expectations for safe and reliable vehicles," Steve St. Angelo, Toyota's chief quality officer for North America, said in a statement.
Shares in Toyota were up 0.9 per cent in Tokyo.
"It's positive that Toyota will get past this event and can focus on quickly restoring its brand image in the U.S. market," said Yoshihiro Okumura, general manager at Chibagin Asset Management in Tokyo. "U.S. sales should be the major driver for the stock."
Toyota U.S. sales have been flat for most of the year due to the recall crisis, industry experts say. They were down 3 percent in November.
Jesse Toprak, a senior analyst with Truecar.com, said that settlements with the government are a good first step, but that regaining consumer trust in a hotly competitive U.S. sales market will take years.
"It won't go away. It will be an ongoing struggle," he said.
INSUFFICIENT ACTION
The two fines of more than $16 million each both involved recalls and allegations by the U.S. government that initial action taken by Toyota to address safety problems earlier this decade was insufficient and the required notification of problems to regulators was not timely, as required by law.
The first investigation involved Toyota's limited recall in 2007 of all-weather floormats that could jam the accelerator, a case that was held up in congressional hearings in February as an example of lax NHTSA oversight of the automaker.
It was only after a crash two years later in California that killed four people that regulators facilitated a much larger floormat recall in 3.8 million Toyota and Lexus vehicles. The recall was widened in January of this year to include another 1.1 million vehicles.
NHTSA ultimately determined that Toyota did not notify regulators of the full scope of the problem in a timely manner.
The second investigation involved Toyotas with suspected steering problems.
An initial recall of Hilux trucks was conducted in Japan in 2004 for steering rods prone to cracks and Toyota told U.S. regulators that the problem was isolated to that country. A year later, U.S. regulators were told the problem was also found in several models sold in the United States and conducted a recall of 1 million vehicles. NHTSA alleged that Toyota was not forthcoming enough on that issue either.
"Automakers are required to report any safety defects to National Highway Traffic Safety Administration swiftly and we expect them to do so," agency administrator David Strickland said.
In April, Toyota agreed to pay a $16.4 million fine, the maximum allowed, over allegations it failed to notify the government in a timely way about gas pedals that would not spring back as designed.
The "sticky pedal" recall of 2.3 million vehicles and the floormat recall are at the center of consumer complaints of unintended acceleration in Toyota and Lexus vehicles that remains under investigation by NHTSA. A report on that review, which includes help from NASA scientists evaluating electronic throttles, is due out early next year.