Toyota Slammed With $16.4M USD Federal Fine For Defect Deception
April 5, 2010 9:10 PM
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(Source: Sting Ray Studios)
Toyota has recalled millions of vehicles, including the best-selling Camry for unintended acceleration problems. Toyota has now received a massive fine for trying to deceive U.S. federal regulators.
(Source: Torque Report)
Fine is largest in U.S. history against an automaker
The atmosphere at the U.S. Department of Transportation on Monday was tense as Secretary Ray LaHood
slammed Japanese automaker Toyota
. Lahood announced, "
We now have proof that Toyota failed to live up to its legal obligations
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.
Defects are an automaker's eternal enemy. Every year thousands, if not millions of vehicles are recalled for defects. Toyota's critical problem was not so much the defects itself -- despite the
massive number of vehicles
involved. Rather, Toyota's key mistake was the dangerous game of deception it reportedly played.
According to documents obtained from Toyota, the company began a recall on
in September of last year in Canada and Europe. However, it failed to inform U.S. regulators of the problem, and made no effort to launch a recall of the effected vehicles until it came under heavy fire in January.
That constitutes a gross violation of federal safety guidelines, which demand that an automaker inform the U.S. federal regulators within five days of discovering a defect.
As a result, the DOT has thrown the book at Toyota, proposing a $16.4M USD, the maximum penalty allowed under the law. That fine far surpasses the biggest previous fine against an automaker -- $1M USD sum levied against General Motors
for failing to promptly recall windshield wipers in 2002-2003 model vehicles
Toyota has two weeks decide its response. Despite the reportedly conclusive evidence, the Asian automaker is expected to appeal the decision, perhaps seeking a smaller fine.
National Highway Traffic Safety Administration (NHTSA)
continues to investigate the sticky accelerators, unsatisfied with Toyota's claim that floor mats were solely to blame. NHTSA is looking at a host of mechanical and electrical elements for bugs, and is even examining whether
could play a role, with the
help of experts from NASA
The government continues to investigate Toyota's behavior during the recall, as well. DOT officials said more fines could brought against Toyota if further proof of wrongdoing is revealed.
While the defect mess is unpleasant for all those involved it does raise some interesting questions about governance. Some say that the government should not police companies, and that the commercial press should be left to investigate reports of defects and inform consumers of safety risk. Others argue the current system is a successful one. And still others argue that current regulation does not go far enough -- that the federal government should have the ability to levy even bigger fines against companies who knowingly make products that could endanger U.S. consumers.
135 pending lawsuits
against Toyota raise similar questions. Some argue that allowing such free litigation against safety critical businesses, such as automakers and healthcare providers allows citizens to take regulation into their own hands. Others argue that it hinders free enterprise, raising prices, and worse yet leads to bigger government.
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RE: Where does the money go???
4/5/2010 10:27:24 PM
They'll fight it, but their biggest cost will come in civil court.
Only because the media has tainted the hell out of any jury's opinion. There still has not been one proven case of this problem. In any fair trial, where verified evidence would have to be brought against Toyota, Toyota would win. It's all " he said she said ". All we have are peoples claims, NO FACTS.
RE: Where does the money go???
4/6/2010 11:06:06 AM
This door swings both ways though. Your point is "where are the facts".....my point is we'll have to wait and see. 34 people died allegedly/related to the sticky accelerator issue. So something happened if people's lives were lost over it.
Obviously to go to court evidence will have to be presented, we'll have to see - but its premature to say the least there are NO FACTS....how would you know anyway - oh because Toyota said so? :) Maybe because your favorite (pick anyone...)news website or news TV show said so? There's no law that states every family member (of one of the 34 that were killed) have to make public their case or facts...In fact its quite the opposite.
And to be clear - hear me out, I'm not saying there is a strong case against them, nor am I saying you are right and there really is no case or FACTS....I'm neutral, playing devil's advocate if you will. I'm just saying there could be a mountain of evidence, on a case by case basis, that in fact does prove that Toyota was at fault. Again, there's no law or rule that states they have to make it known to the public.
RE: Where does the money go???
4/6/2010 11:20:18 AM
"its premature to say the least there are NO FACTS"
That's just the point. There are no facts to implicate Toyota here. It appears to be no more than simple driver error. Yet in the minds of millions of Americans, Toyota is already guilty of a heinous crimes. And those are the people who, having already made up their minds, will be sitting on any jury.
Add in a healthy dose of rampant anti-corporate sentiment, and any decent attorney could wring a verdict out of a jury, without a single fact on his side.
"We basically took a look at this situation and said, this is bullshit." -- Newegg Chief Legal Officer Lee Cheng's take on patent troll Soverain
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