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Toyota Motor Corp agrees to pay US government record figure in additional fines over handling of safety crisis
Toyota Motor Corporation has agreed to pay the US government a record $32.4m (£20.9m) in additional fines to settle an investigation into its handling of two recalls at the heart of its safety crisis.
The civil penalties will settle investigations into how Toyota dealt with recalls over accelerator pedals that could get trapped in floor mats and steering relay rods that could break and lead to drivers losing control.
The latest settlement, on top of a $16.4m fine Toyota paid earlier in a related investigation, brings the total penalties levied on the company to $48.8m. It caps a difficult year for the world's biggest car manufacturer, which recalled more than 11m vehicles globally since autumn 2009 as it scrambled to protect its reputation for safety and reliability.
Toyota's board of directors agreed to pay the fines today at the company's board meeting in Japan, according to an official familiar with the case, and the company said it agreed to the penalties without admitting to any violations of US laws. However, that does not free Toyota from potential civil and criminal penalties in private lawsuits and other federal investigations.
Steve St Angelo, Toyota's chief quality officer for North America, said in a statement that the company has "worked very hard over the past year to put these issues behind us and set a new standard of responsiveness to our customers. These agreements are an opportunity to turn the page to an even more constructive relationship with NHTSA (National Highway Traffic Safety Administration)."
In April, Toyota agreed to pay the maximum fine allowed under law for a single case – $16.4m – for failing to promptly alert US regulators to safety problems over sticking accelerator pedals. Under federal law, car manufacturers must notify the National Highway Traffic Safety Administration within five days of determining that a safety defect exists and promptly conduct a recall.
At the time, Toyota denied attempting to hide a safety defect and said it agreed to the penalty to avoid a lengthy legal battle with the government.
Jesse Toprak, vice-president of industry trends and insight at TrueCar, an automotive consulting firm in Santa Monica, California, said Toyota was trying to put its recalls behind it at a time when the company's US sales have been flat while many rivals have increased sales. But he said rebuilding trust would take time.
"It's going to be a far lengthier process. Consumer loyalty is not what it used to be. The choices are plentiful now," he said.
Investors have soured on Toyota shares this year, sending them tumbling 17% compared with a less than 2% fall in the benchmark Nikkei 225 stock average. Reaction today was muted, however, with the shares finishing up 0.6% at 3,250 yen in Tokyo.
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