Toyota Slammed With $16.4M USD Federal Fine For Defect Deception
April 5, 2010 9:10 PM
comment(s) - last by
(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.
This article is over a month old, voting and posting comments is disabled
4/5/2010 11:35:01 PM
So? My point is that is seems odd that companies with hundred billion dollar market caps are only fined 14 million as a record. Where as 100 million dollar fines are common place on this web site for tech companies most of which are of similar size.
4/6/2010 7:43:07 AM
I see some irregularity in it all as well. Both Microsoft and Toyota are multi-billion dollar corporations that produce highly sought after products. However, Toyota's products can get you killed when they malfunction. Toyota gets slapped on the hand with a couple million for hiding safety problems that may have caused deaths. Meanwhile Microsoft faces fees, fines, and penalties in excess of $100 million for not including third party browsers in their OS (while Apple doesn't).
It's all B.S. IMO.
4/6/2010 9:46:51 AM
On top of that the people making fun of your IQ can't read between the lines. What do they say about book smart people not having common sense?
So how many people are going to die from RAM price fixing? How many people are in danger of M$ holding a monopoly?
Answer: Not as many people who have and yet still may die from Toyota's safety defects. So what the OP is saying is the punishment (fine) does not fit the crime :P
"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer
NASA, National Academy of Sciences to Investigate Unintended Acceleration
March 30, 2010, 10:57 AM
250 Lawyers Descend on San Diego for Toyota Lawsuits
March 25, 2010, 3:25 PM
Why the Feds Believe Extraterrestrial Rays Could be Messing With Toyota Vehicles
March 16, 2010, 4:03 PM
2008 Prius Takes Another Unlucky Driver on a Wild Ride
March 9, 2010, 6:00 PM
UPDATED: Toyota to Suspend Sales of Camry, Seven Other Models Over Unintended Acceleration
January 27, 2010, 5:43 PM
Volkswagen e-Golf Priced from $35,445, Offers Up to 90-Mile Range
August 25, 2014, 12:35 PM
Owner of "Decepticon" Maserati Ordered to Appear in Court This Thursday
August 25, 2014, 7:55 AM
Watch Out Valets, Corvette is Offering "Baby Monitor for Your Car"
August 19, 2014, 5:05 PM
GM Concedes That the Cadillac ELR Doesn’t Really Compete with the Tesla Model S
August 15, 2014, 5:42 PM
Ford Partners with DTE Energy to Deploy MI’s Largest Solar Installation
August 14, 2014, 10:57 AM
Thanks to Support from Dealers, Pennsylvania Paves Way for Tesla Direct Sales
August 12, 2014, 10:17 AM
Most Popular Articles
New Photos Show “Assembled” iPhone 6, Protruding Camera Ring
August 20, 2014, 2:32 PM
Leaked Qualcomm Roadmap: 20 nm 64-bit Octacore Smartphone SoCs Cometh
August 20, 2014, 11:38 AM
Microsoft's Surface 2 Tablet Family Gets a $100 Price Cut
August 25, 2014, 1:16 AM
Report: Microsoft to Announce Windows 9 on September 30
August 21, 2014, 11:20 AM
From HULC to FORTIS: the Evolution of Lockheed Martin's Incredible Exosuit
August 22, 2014, 12:45 PM
Latest Blog Posts
Space Terrorism is a Looming Threat For the United States
Apr 23, 2014, 7:47 PM
Facebook Aims to Provide Internet to "Every Person in the World" with Drones, Satellites
Apr 1, 2014, 10:20 AM
Retail Mobile Sites Experience Outages in Light of Simplexity's Bankruptcy
Mar 14, 2014, 8:48 AM
Tesla vs. BMW: Who Has the Safer EV?
Feb 1, 2014, 2:56 PM
Justice Leaks Details of Next HTC One Two Flagship Phone
Dec 5, 2013, 4:04 PM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information