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Apr
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U.S. Department of Transport to fine Toyota $16.4 million

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U.S. Department of Transport to fine Toyota $16.4 million

Tuesday, April 6, 2010

••• Toyota Motor Corp faces a proposed $16.4 million fine from U.S. regulators who said the automaker knowingly delayed a massive recall for defective accelerator pedals.

The U.S. Department of Transport has announced that it plans to fine Toyota Motor Corporation $16.4 million after the family-controlled automaker failed to notify U.S. transport regulators about defects that allegedly cause unintended acceleration.

According to a statement released yesterday, the investigation into the Toyota recalls by the Department of Transport revealed the world’s largest car manufacturer was aware of the so called “sticky-pedal” defect for at least four months before revealing it to safety authorities. U.S. law states carmakers must inform authorities of any problems the find within five days.

Toyota, which now has two weeks to decide whether to appeal against the decision, is yet to respond to the news.
The defect in question is at the centre of the current recall crisis that has seen Toyota recall over 8 million vehicles worldwide since November. Third-generation family head Akio Toyoda has been accused of mishandling the recalls, as he remained largely silent on the matter until February.
However, he has since attempted to rectify the company’s negative publicity, appearing in public often and personally heading a Toyota committee that is investigating the safety recalls.

Toyota has two weeks to decide its response.

The “sticky pedal” case was the only one in a string of voluntary recalls where a formal defect finding was established.

Documents obtained from Toyota showed the automaker had issued repair notices in Canada and Europe to address complaints about “sticky pedals,” sudden acceleration and sudden engine revving in late September, but did not begin a U.S. recall until late January, regulators said.

Manufacturers are legally obligated to notify U.S. safety regulators within five business days if they determine that a safety defect exists. The documents showed Toyota was aware U.S. consumers were experiencing the same problems, the Transportation Department said.

As part of the pedal recall, Toyota has offered to add a metal shim or replace them completely.

Previously, the largest fine was $1 million against General Motors Co for failing to promptly recall windshield wipers in 2002-2003 model vehicles.

Fines for violating auto regulations were increased earlier in this decade after massive recalls involving Firestone tires.
Related: Toyota to Replace Accelerator Pedals for Unhappy Owners GO
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