Toyota Defects Only Result in a Fine of $16 Million

The U. S. government announced yesterday that it would seek the maximum fine possible against Toyota because it had failed to promptly disclose its problems with accelerator pedals.

The amount? A whopping $16.3 million.

By comparison,Toyota earned $1.6 BILLION just in its third quarter, in the middle of decreased sales resulting from the recall and negative publicity

And the penalty, which is the largest allowed per recall under the Tread Act, which was enacted after accidents involving Firestone tires on Ford Explorers, pales in comparison with the $2.3 billion settlement last September with Pfizer over fraudulent marketing issues that did not cause countless deaths and bodily injuries.

Toyota has two weeks to contest the fine, which it presumably will.

Also, it was just revealed that just five days before Toyota announced its massive recall on January 21st, one of its top executives wrote that “we need to come clean” about the acceleration problems. Irv Miller, VP of public affairs, wrote in an email that “We are not protecting our customers by keeping this quiet. The time to hide on this one is over.” Miller is now “retired.”

And it gets worse: the government has just released documents proving that Toyota knew that floor mats could entrap gas pedals on February 7, 2006 and that those pedals were sticking five months later, even though it did not finally recall its defective vehicles for another 3 1/2 to 4 years.

Regulators have finally decided acknowledged that Toyota deliberately concealed safety information after ignoring the problem for years.

Ray LaHood, the Department of Transportation secretary, has seen documents proving that Toyota knew of the potential pedal defect since at least Sept. 29th, when it recalled its cars in 31 European countries and Canada — but waited to do so until late January here –to fix gas pedals that were sticking and causing sudden accelerations.

Worse, the car manufactuer had already completed making the changes on vehicles sold in Europe before the January recall took place in the United States.

The N.H.T.S.A. is still investigating two other Toyota recalls to see if more fines should be imposed. That investigation began on Feb. 16. It can impose a similar fine in each recall.

The safety agency also was criticized at the Congressional hearings for failing to be more aggressive in pursuing Toyota. Company documents showed the N.H.T.S.A. reached agreements several times in recent years that allowed Toyota to take less-extensive recall steps.

In one 2007 presentation, headlined “Safety Wins for Toyota,” the company said it had saved $100 million by negotiating a smaller recall campaign.

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