US Sues Toyota for Millions

Car Company Found Lying About Safety

Apr 5, 2010
Veronica Reino

Toyota is fined for lying - danielctw

One of the most successful car companies is being fined for lying to regulators.

On Monday, March 29, 2010, Toyota Motor Corp discovered that US regulators would be fining the car company $16.4 million for allegedly hiding its gas pedal problems from safety regulators.

Under US law, that is the maximum fine Toyota could receive. For at least four months, Toyota had hid its pedal defect from the Transportation Department. Auto makers are required to inform regulators within five business days. Toyota will have two weeks to respond to the fine.

The US Toyota Recall

Toyota had apparently known about its pedal problems. In January, 2.3 million US vehicles were recalled for a “sticky pedal.” It was thought to be responsible for a sudden acceleration in many of its cars.

Toyota Motor Co. initiated recalls at the end of 2009 and the beginning of 2010. The first recall occurred on November 2, 2009 to correct an out of place floor mat on the driver’s side thought to slip. The second occurred on January 21, 2010 after crashed showed they were not occurring due to the floor mats. It was then thought to be a sticking accelerator.

Certain Lexus and Pontiac models were also affected by the recall. After the initial accelerator recall, Toyota also pulled 1.8 million vehicles in Europe and 75,000 in China. By then, Toyota had recalled 9 million cars worldwide.

In a statement released Monday, Transportation Secretary Ray LaHood said it had proof that Toyota had failed to let regulators known as soon as possible.

“… They knowingly hid a dangerous defect for months from U.S. officials and did not take action to protect millions of drivers and their families,” LaHood said in the statement. “For those reasons, we are seeking the maximum penalty possible under current laws."

Toyota may also face additional fines, but word on that is not certain yet. The company has yet to respond.

It's not the first time

An internal Toyota presentation at congressional hearing in March boasted about savings from limiting another recall. In 2007, it saved $100 million from limiting the recall of floor mats suspected of slipping and tangling gas pedals in Toyota and Lexus vehicles, according to a Wall Street Journal article. Internal e-mails sent to Congress also suggested Toyota had intended to stall the National Highway Traffic Safety Administration in 2007 from taking action on that recall.

Toyota may have lost some money due to the gas pedal recall, but last March incentives and aggressive advertising lured in buyers. Much to everyone's surprise, Toyota’s sales rose 41% from a year earlier, suggesting the 2010 recall would not be the end of Toyota.