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.
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RE: Still Confused
4/6/2010 12:19:27 PM
There are documented examples of the problem like one where a Toyota Avalon owner who complained about his car going full throttle by itself was ignored by his dealership. He ended up driving the car to dealership at full throttle, using the transmission to keep it under control. He parked it in front of the showroom with it's engine redlined telling the dealership employees "Now do you believe me"?
RE: Still Confused
4/7/2010 4:31:11 AM
I'll have to admit, I have experienced this issue first hand. My father barrowed my Suburban in 2002-2003 and left me his 1997 Avalon. I had to pickup the mighty boss and took to the interstate. Picked up the Boss and on our way back, set the Avalon on cruise at 70MPH. At first I thought it was just the cruise kicking in to get the car into the correct speed after hitting the cruise button because there is always a 1-3 second lag but, the car kept accelerating. I hit 80MPH...90MPH and said this is not correct. I hit the brakes and the car would slow down but then the acceleration just kept on going if I released the brakes. The car was not redlining but if I remember correctly it was accelerating at about 4000-5000 RPM. Turning off the cruise also did not work. With my wife next to me and pregnate as well, I put the car in neutral turned off the car in the middle of the interstate still going around 80MPH, turned the car back on and the issue subsided.
I just thought I'd share that. I never told my dad about the incident. Never heard my dad say anything of that nature since 2002-2003 to me or my siblings as well. My wife peed her pants about the situation but I was just "Meh". Honestly, if it was her driving, she'd probably panic and call 911 like the guy in Callifornia did. That is just (I think) your typical women driver reaction. Whether it was electronic malfunction or something, I'll never know but it has never happened since. The Avalon still runs and hums perfectly today with over 280,000 miles on it. So yeah, it was odd when I first heard of the similar claims last year. I wanted to post this on other threads but thought, well it only happend once so perhaps it was just something else. But like I said, I never had my dad take the car in for an inspection therefore I will never know what exactly went wrong that day. Was it the same issue(s) as everyone is stating it to be? Was it different? I don't know.
The Toyota brand have always been very reliable for me and my family. Regardless of the current situation, I would purchase another Toyota if I needed to. But there is that deep dark thought of what did really happen that day in the back of my mind though.
"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
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