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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 obligationsWorse 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 "sticky pedals" 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.

Meanwhile, the 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 cosmic rays 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.

Likewise, the 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
By The Raven on 4/7/2010 4:40:43 PM , Rating: 2
Regarding the shill accusation:
I work for a Toyota subsidiary that sells materials to all major auto manufacturers. I have no allegience to Toyota except that they treat me and my co-workers fairly and with respect. My allegiance is to the American people. And if the American people want headlights and taillights, I am here for them. The job opening was just here so I gave it a shot. I have been here 2 years and have learned much about the auto industry even though I just import materials used in manufacturing the lighting fixtures and have no hand in design or whether the cars can stop or not :-P.

But any of that aside, the reason that I don't like the smell of the whole affair is that I don't like gov't in our business. Especially the feds. So though I MIGHT be slightly biased toward Toyota, that issue far outweighs any bias I might have. And I have zero bias for Audi. My dad's A4 fell apart pretty bad. I go with Honda for the most part.

But I agree with you that Toyota failed to report their findings directly to the US gov't. This is breaking the law. Is this whole thing not a circus then? No. It is a circus. To me this is like when I got a ticket for having expired tags. I was registered. But I forgot to put them on as we were going through the childbirth thing. But some a-hole saw my car parked there with tags that expired 2 months prior, and bam! I'm out $75 (if I remember correctly)
Did I break the law? Yes. Should they have honored my appeal because of the childbith. I think so.

So if they didn't report this, do you think they should have to pay the maximum penalty for some alleged neglegiance? It all smells of bad politics. Whether it is because GM is owned by the US gov't now or because Obama needs money to fund his health care plan, I don't know. (and I'd say the same thing about Bush and his war or whatever the hell) But it certainly does not seem right. And I'm sure Toyota won't fight it because of legal fees, and so it just amounts to extortion.

And I'm sorry that I pulled the 'Wii' example out on you without explaining. Nintendo voluntarily gave those sleeves out.

I hope that all clarifies some of my ranting.

RE: Still Confused
By DominionSeraph on 4/8/2010 9:05:24 AM , Rating: 2
Well, the Federal Government isn't a singular entity. Just because Congress is a bunch of clowns doesn't mean the DOT is retarded.

RE: Still Confused
By The Raven on 4/8/2010 10:23:18 AM , Rating: 2
Look let me just calm myself...

I am not an anarchist. (FYI that post is fallacy.)

Do you think this is not a case of the US gov't taking a swipe at Toyota (for whatever reason)?

I would think that the max penalty would be for some company who intentionally endangered people on our road ways. Not someone who showed enough concern as to try to fix the problems.

But even if you don't agree, that is fine. My opinion is that the gov't is doing TOO MUCH here. I am not calling for the head of LaHood or his department.

"You can bet that Sony built a long-term business plan about being successful in Japan and that business plan is crumbling." -- Peter Moore, 24 hours before his Microsoft resignation

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