Toyota Recall Scandals Lead to $32 Million Fine

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By Admin on December 31, 2010 5:52 AM

Toyota has been hit with the largest civil fine available under federal law. The carmaker will be required to pay a record $32.425 million over its failure to inform federal authorities promptly of the problems that lead to the massive recalls for steering and acceleration issues. The fines where handed down after two Department of Transportation investigations into Toyota's handling of the recalls.

In the Toyota recalls over floor mats and sudden acceleration, the company first recalled its floor mats as early as 2007, reports ABC News. However, it wasn't until 2009, that Toyota announced a broader recall which included nearly 4 million cars. Federal law requires manufacturers to notify federal regulators within five days of the discovery of a safety defect. As a result of this case, Toyota will pay $16.375 million in fines.

As a result of a second investigation, Toyota will pay $16.05 million in fines from allegations they delayed a recall of nearly a million trucks and SUVs over safety problems with steering rods, reports ABC. The National Highway Traffic Safety Administration investigation found information indicating Toyota knew of complaints the steering rods were prone to break under stress long before its recall in September, 2005.

Toyota announced a recall in Japan in October of 2004, to replace the steering relay rods in about 33,000 vehicles. At the time, a company representative told NHTSA that a Toyota recall in the U.S. was unnecessary because it had no reports of similar problems in this country and because driving conditions were different in Japan.

During litigation over the crash of a Toyota truck that killed 18-year-old Levi Stewart, it came to light that Toyota turned over 40 previously unknown cases where American owners had complained directly to Toyota about steering rod problems before the Japanese recall even took place. NHTSA learned of these cases only this year, after an ABC investigation.

"Safety is our top priority and we take our responsibility to protect consumers seriously," U.S. Transportation Secretary Ray LaHood said in a statement. "I am pleased that Toyota agreed to pay the maximum possible penalty and I expect Toyota to work cooperatively in the future to ensure consumers' safety."

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