Ray LaHood and NHTSA announced that they will fine Toyota more than $16 million (merfam, Flickr)

    by: Reilly Brennan | AOL Autos

    U.S. officials will seek over $16 million in civil fines against Toyota for "knowingly hiding a dangerous defect" from the agency and American consumers. Department of Transportation Secretary Ray LaHood announced the penalty on Monday via the agency's website.

    "We now have proof that Toyota failed to live up to its legal obligations,” said LaHood’s statement. "Worse yet, 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. For those reasons, we are seeking the maximum penalty possible under current laws."

    The penalty, which Toyota has 2 weeks to dispute, focuses on “sticky” gas pedals, which NHTSA says Toyota knew about for four months before alerting government officials. Auto manufacturers are legally obligated to notify the agency within five business days if a safety defect exists. The sticky pedal recall now includes 2.3 million vehicles in the U.S., including the popular Camry sedan as well as eight other vehicles.

    "NHTSA learned through documents obtained from Toyota that the company knew of the sticky pedal defect since at least September 29, 2009. That day, Toyota issued repair procedures to their distributors in 31 European countries and Canada to address complaints of sticky accelerator pedals, sudden increases in engine RPM, and sudden vehicle acceleration. The documents also show that Toyota was aware that consumers in the United States were experiencing the same problems."

    Toyota has provided tens of thousands of pages of information to NHTSA related to the recalls and safety concerns over the company's products, which the agency says it continues to analyze. NHTSA has not ruled out introducing separate penalties; the $16.375 million penalty levied this week only includes the pedal recall.

    Toyota has not yet seen the letter indicating the penalty from NHTSA.

    "While we have not yet received their letter, we understand that NHTSA has taken a position on this recall," the company said via a statement on their media site. "We have already taken a number of important steps to improve our communications with regulators and customers on safety-related matters as part of our strengthened overall commitment to quality assurance. These include the appointment of a new Chief Quality Officer for North America and a greater role for the region in making safety-related decisions."

    Small Fine, But Could Increase Toyota's Liability

    While the penalty won't hurt Toyota's bottom line ($16 million would represent a small fraction of the company's marketing budget), it indicates that LaHood's agency is under as much pressure as Toyota itself.

    The new, stronger stance by U.S. officials and this week's fine could prove to be a guidebook for the current and future lawsuits presented to Toyota by plaintiff attorneys around the world. According to analysis done by Bloomberg, Toyota currently faces 177 consumer and shareholder lawsuits seeking class-action status and 56 lawsuits claiming personal injuries or death caused by sudden acceleration.

    Toyota's recall problems did not seem to affect its ability to sell cars in March, however. The company was up 41% in March 2010 versus the same month in 2009, due in large part to massive incentives and 0% financing offered on some vehicles.

    Whether or not Toyota will continue to offer deep discounts on its products in order to keep sales afloat remains to be seen, but in terms of pure market share Toyota has not fallen off a cliff as some posited earlier in the year.

    "We are standing by our cars, and we're grateful that our customers are standing by Toyota," said Senior Vice President of Toyota Motor Sales Don Esmond last week.

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    1 - 20 of 176 Comments
    phollisabc Apr 30, 2010 12:26 PM
    So since the government has proof, why is it that Toyota isn't giving the 0% for the customers who are stuck like Chuck on these runaway cars? $16 mil for a company so rich and powerful, that's like a scratch on the wrist.
    Report This
    gr82batexan Apr 16, 2010 10:37 AM
    Sure NTSA fines Toyota, and fortunately Toyota has the money to pay the fine, but what I want to know is what is going to happen when NHTSA finally decides to go after GM for the whole fiasco involving fuel tanks falling off of pickups and SUVS made by GM due to bolts rusting and falling out? If this ever comes to light and NHTSA does **************, there will be over 9 million GM vehicles involved that will need to be recalled. (That is if there are any left on the road...LOL) Guess who will get stuck with that bill?
    Report This
    chvy70camaro Apr 07, 2010 6:28 PM
    plus grf, they're practically giving them away!
    Report This
    grfrankfurter Apr 07, 2010 6:12 PM
    Despite all the bad things that have been reported about Toyota motor vehicles, people continue to purchase them. Their sales increased 41% from a year ago,. Why? The local news media here in Jacksonville, Florida reported that there has not been any accidents as a result from people driving Toyota vehicles. Many people questioned about their recalled vehicles stated that they never had any problems with their vehicle. You think people who owned these vehicles would be too afraid to drive them. I know I would be.
    Report This
    chvy70camaro Apr 07, 2010 2:19 PM
    good point, mlopez2197!
    Report This
    mlopez2197 Apr 07, 2010 2:17 PM
    Toyota is(present tence) not was (past tence) a NAZI collaborator, quit acting shocked that they would atempt genecide. Again.
    Report This
    mlopez2197 Apr 07, 2010 2:10 PM
    is anyone shoced that a company founded in partnership with the NAZIs put cars on the road that kill Americans?
    Report This
    chvy70camaro Apr 06, 2010 10:44 PM
    I agree with Glenn beck, mk, and i hate pres. nobama bin laden!! But, toiletota has been crap for quite a while now!
    Report This
    mkmightymoe Apr 06, 2010 10:01 PM
    Yeah buy American and support this corrupt government! Obama owns GM now! Support these corrupt union bosses? Never! The American people are being squeezed and sold out! It is our right to buy which ever car we like best! Who the heck needs someone to tell us what we HAVE to buy? This is just the start, now they are telling us we have to buy heath insurane according to what the government tells us we need! Where our kids can go to school and what liberal progressive crap they have to learn!???? Wake up people! Where is Paul Revere when you need him? Oh yes, we have Glen Beck! Thank God!
    Report This
    mkmightymoe Apr 06, 2010 9:55 PM
    Union Black Mail is ************** like to me! They tried this with Audi but it did not work! It hurt Audi for a while, but the BIG UNIONS did not win! I am sorry Toyota took this lying down! It is a Jessie Jackson type of scam to squeeze big business! You idots! Big business give us jobs, leave them alone! Vote these socialist clowns out of office as soon as possible before they destroy our country! That is what they intend to do people!
    Report This
    chvy70camaro Apr 06, 2010 8:56 PM
    hey motors, you tell us where ANY of all those problems you mentioned adds up to ANYWHERE NEAR 62 deaths?!! Hell, i don't think they add up to ANY deaths!!
    Report This
    chvy70camaro Apr 06, 2010 8:54 PM
    good night glasss
    Report This
    chvy70camaro Apr 06, 2010 8:47 PM
    that's right, 'Cordoba', sorry! yeah i remember Mr. Fantasy Island doing those commercials! Yeah, i had a K-Car once, not bad for what it was! '86 it was! the K-Car actually saved Chrysler back in '82-'84!
    Report This
    oldscutt77 Apr 06, 2010 8:44 PM
    I thought the Chrysler Cordoba was cool, I remember the commercial when I was 12 w/Ricardo Montalban, "Corinthian Leather" or was it vinyl.. I had driver training school in the Aries K car, similar to the Dodge Diplomat.
    Report This
    chvy70camaro Apr 06, 2010 8:43 PM
    sounds killer Oldscutt77!
    Report This
    chvy70camaro Apr 06, 2010 8:42 PM
    how much of a fine will toyota get hit with when the NHTSA look into the possibility that they've covered some of this up since '03 with the sienna mini-van and even '02 with the camry?!! (source: L.A. Times)
    Report This
    oldscutt77 Apr 06, 2010 8:40 PM
    Just a quick note, my Cutlass had a 350 when I bought it back in 1987, but after a year and 1/2 the engine was blowing smoke, so I had the chance to get a Buick 455 engine, w/matching tranny from a 1973 Buick, spent a year building it up, when i was finished w/all the performance parts, she was pushing 430 horses. It's alot of Fun, i used to race it back in the 90's on the street, but sh's just a cruiser now, car shows and stuff.
    Report This
    chvy70camaro Apr 06, 2010 8:38 PM
    i just think it's time for a lot of these older people who still complain that they got burned back in '78 on a Chrysler Cordova or an '81 K-Car to take a second look at American cars again! Atleast make an educated decision before you buy!
    Report This
    chvy70camaro Apr 06, 2010 8:35 PM
    442 dude!
    Report This
    glassstep Apr 06, 2010 8:34 PM
    don't hate you oldscut, you just got some learning to do
    Report This
    1 - 20 of 176 Comments
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