Belfast Telegraph

Monday 29 December 2014

Toyota to pay £21m in extra fines

Toyota has agreed to pay the US government a record 32.4 million dollars (£21m) in additional fines to settle an investigation into its handling of two recalls, a source said.

The penalties will settle investigations into how the Japanese company dealt with recalls over accelerator pedals that could get trapped in floor mats and steering relay rods that could break and lead to a loss of control, a person familiar with the case said.

The latest settlement, on top of a 16.4 million-dollar (£10.6m) fine Toyota paid earlier in a related investigation, brings the total penalties levied on the company to 48.8 million dollars (£31.5m). It caps a difficult year for the world's number one car maker, which recalled more than 11 million vehicles worldwide since last autumn as it scrambled to protect its reputation for safety and reliability.

Toyota's board of directors approved the settlement at a meeting in Japan, the source said. But that does not free Toyota from potential civil and criminal penalties in private lawsuits and other US government investigations.

In April Toyota agreed to pay the maximum fine allowed under law for a single case - 16.4 million dollars - for failing to promptly alert US regulators to safety problems over sticking accelerator pedals.

Under US law, car makers must notify the National Highway Traffic Safety Administration within five days of determining that a safety defect exists and conduct a prompt recall. At the time, Toyota denied attempting to hide a safety defect and said it agreed to the penalty to avoid a lengthy legal battle with the government.

The latest fines involve two separate safety problems affecting some Toyota passenger cars and trucks.

The first case deals with recalls in 2009 and 2010 of about five million Toyota and Lexus vehicles with accelerator pedals that could become trapped in floor mats. Toyota had recalled 55,000 all-weather floor mats in 2007 to address pedal entrapment, but the government said its investigation found that simply removing the floor mats was insufficient.

A high-speed crash involving a Lexus in August 2009 killed four people near San Diego, prompting the government to investigate the recall. After reviewing crash evidence and other data, NHTSA investigators concluded that Toyota failed to notify the government about a known safety defect within five days.

In the second case, Toyota conducted a recall in 2004 of Hilux trucks in Japan with steering relay rods that could break and affect steering. Toyota told US regulators in 2004 that the safety problem was limited to vehicles in Japan and the company had not received similar complaints in the US. But a year later, Toyota told NHTSA the steering defect was also found in several US models and recalled nearly a million vehicles.

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