Toyota pays record fine for delaying recall, failure to report defects

Dec 18, 2012

Toyota Motor Corp. will pay a record $17.35 million fine for its failure to report a safety defect to federal officials and for delaying the subsequent recall.

The fine, levied by the National Highway Traffic Safety Administration (NHTSA), is the highest civil penalty relating to recall violations ever paid out to the organization, the Detroit Free Press reports.

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Earlier this year, Toyota amended its 2009 recall adding more than 150,000 2010 model year Lexus RX vehicles to the recall. NHTSA had questioned the timeliness of the recall, noting that federal law requires automakers to notify the agency within five days of determining a safety defect exists.

The agency said it had contacted Toyota in May of this year about a trend in floor mat pedal entrapment in the 2010 Lexus RX350s and that Toyota followed up with a recall the following month. Toyota let NHTSA know as well that it was aware of 63 alleged incidents in which accelerator pedals may have been entrapped by floor mats since 2009, triggering the government’s claim.

Toyota is paying the maximum allowable fine for recall delays for the fourth time since 2010, and is doing so without admitting violations to the U.S. Safety Act.

Ray Tanguay, chief quality officer for the company, said Toyota agreed to the settlement "in order to avoid a time-consuming dispute and to focus fully on [its] shared commitment with NHTSA to keep drivers safe."

As the Detroit News reports, the automaker has struggled with the pedal entrapment issue for years, having recalled 7.1 million U.S. vehicles since 2009.

In addition to the fine, Toyota has agreed to monthly meetings with the NHTSA and a series of internal reforms.

Toyota is expected to bring in $9.7 billion in global profits for the fiscal year.

- Jordan Wyant, Michigan Radio Newsroom