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US regulators mull 2nd fine on Toyota

Washington, April 11, 2010

US safety regulators may seek a second penalty against Toyota Motor Corp for knowingly delaying a massive recall over defective accelerator pedals, after imposing a record $16.4 million fine against the automaker.   

The National Highway Traffic Safety Administration, in a April 5 letter to Toyota, said Toyota's recall of 2.3 million vehicles in January for faulty accelerator pedals came at least four months after the automaker had determined there were safety defects in the vehicles.

NHTSA may pursue a second fine based on documents submitted by Toyota, which indicated there were two separate defects in the recalled pedals, the letter showed. The agency said Toyota would have faced a fine totaling $13.8 billion if not for caps set by US law.

The proposed $16.4 million civil penalty against Toyota is the maximum allowed by US law and the largest that the US Department of Transportation has ever sought.   

"Here, the gravity of Toyota's apparent violations is severe and potentially life-threatening," NHTSA chief counsel O Kevin Vincent said in the letter, a copy of which was reviewed by Reuters.

US law allowed a $6,000 penalty for each defective vehicle sold by Toyota, adding to $13.8 billion. Due to a law that limits individual fines against a manufacturer, the maximum the government could seek was $16.375 million, Vincent said in the letter.

Toyota has until April 19 to decide whether to appeal that penalty for the first official finding that the world's largest automaker violated US safety regulations.   

"If Toyota will not agree to pay the demanded penalty, NHTSA will refer this matter to the US Department of Justice with the recommendation that the Attorney General commence a civil action in federal court ...," Vincent said.

The New York Times first reported the NHTSA letter.   

Automakers are legally obligated to tell US safety regulators within five days if they determine a safety defect exists.

US safety regulators said in proposing the record fine against Toyota on Monday that the automaker's own records showed that it had issued repair notices for the sticky pedal problem in Canada and Europe in September but did not take action in the US market until January.   

The agency continues to investigate Toyota recalls, including one in October 2009 for floor mats that can jam the gas pedal and cause uncontrolled acceleration. NHTSA has said that additional fines are possible.

Previously, the largest fine was $1 million against General Motors Co for failing to promptly recall windshield wipers in 2002-2003 model vehicles. - Reuters




Tags: Toyota | Automaker | brake pedal |

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