$15 million Penalty Awaits Toyota for 'Sticky Pedal Defect'

06/04/2010 12:10
For knowingly hiding and failing to notify the US traffic safety agency on time about the defective brake pedal on more than 2,000 vehicles, Toyota Motors faces a $16.4 million fine and appropriate legal action by government safety regulators.
The National Highway Traffic Safety Administration (NHTSA) is set to slap Toyota Motors with a $16.4 million fine for failing to notify the agency about the defective brake pedal as required by law.
Last January approximately 2,000 vehicles were recalled by Toyota following reports of vehicular accidents leading to the death of several motorists who purchased and own Toyota units. Approximately six million units have been recalled for brake pedal defects.
The NHTSA contends that the car manufacturer deliberately hid the brake defects from government officials for months until numerous reports of increasing number of accidents due to defective brake pedals surfaced.
"We now have proof that Toyota failed to live up to its legal obligations," said Transportation Secretary Ray LaHood. "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.
For those reasons, we are seeking the maximum penalty possible under current laws." Safety is our top priority and we will vigorously pursue companies that put consumers at risk," said NHTSA Administrator David Strickland. "We will continue to hold Toyota accountable for any additional violations we find in our ongoing investigation."
In response to the NHTSA action, Toyota responded issued this statement:
"We have already taken a number of important steps to improve our communications with regulators and customers on safety-related matters as part of our strengthened overall commitment to quality assurance. These include the appointment of a new chief quality officer for North America and a greater role for the region in making safety-related decisions."
Toyota has been sued by numerous car owners and state regulators for its reported faulty brake system. Earlier a California prosecutor accused Toyota of knowingly selling thousands of vehicles with brake pedal and acceleration defects.
cbsnews.com reports: The Orange County's lawsuit accuses Toyota of using deceptive business practices to become the world's top automaker. The suit seeks civil penalties of $2,500 per violation under the Unfair Business Practices Act, along with the recovery of attorney fees and investigative costs.
At least 89 class-action lawsuits have been filed against the Japanese automaker, which could cost the company $3 billion or more.
Toyota's U.S. shares fell 12 cents to $76.82 in Friday afternoon trading.
(original article appeared @ Digital Journal )

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