TOKYO (AP) — Toyota Motor Corp. has agreed to pay the U.S. government a record $32.4 million in additional fines to settle an investigation into its handling of two recalls at the heart of its safety crisis.
The civil penalties will settle investigations into how Toyota dealt with recalls over accelerator pedals that could get trapped in floor mats and steering relay rods that could break and lead to drivers losing control.
The latest settlement, on top of a $16.4 million fine Toyota paid earlier in a related investigation, brings the total penalties levied on the company to $48.8 million. It caps a difficult year for the world’s No. 1 automaker, which recalled more than 11 million vehicles globally since the fall of 2009 as it scrambled to protect its reputation for safety and reliability.
Toyota’s board of directors agreed to pay the fines on Tuesday at the company’s board meeting in Japan, according to an official familiar with the case, and the company said it agreed to the penalties without admitting to any violations of U.S. laws. However, that does not free Toyota from potential civil and criminal penalties in private lawsuits and other federal investigations.
The person had spoken Monday on condition of anonymity ahead of the formal announcement.
Steve St. Angelo, Toyota’s chief quality officer for North America, said in a statement that the company has “worked very hard over the past year to put these issues behind us and set a new standard of responsiveness to our customers. These agreements are an opportunity to turn the page to an even more constructive relationship with NHTSA (National Highway Traffic Safety Administration).”
He said Toyota was grateful to its customers for “their confidence in the quality and reliability of our vehicles.”
In April, Toyota agreed to pay the maximum fine allowed under law for a single case — $16.4 million — for failing to promptly alert U.S. regulators to safety problems over sticking accelerator pedals. Under federal law, automakers must notify the National Highway Traffic Safety Administration within five days of determining that a safety defect exists and promptly conduct a recall.
Jesse Toprak, vice president of industry trends and insight at TrueCar, an automotive consulting firm in Santa Monica, California, said Toyota was trying to put its recalls behind it at a time when the company’s U.S. sales have been flat while many rivals have taken advantage of a recovering auto landscape. But he said the rebuilding of the trust would take time.
“It’s going to be a far lengthier process. Consumer loyalty is not what it used to be. The choices are plentiful now,” he said.
Investors have soured on Toyota shares this year, sending them tumbling 17 percent compared with a less than 2 percent fall in the benchmark Nikkei 225 stock average. Reaction Tuesday was muted, however, with the issue finishing up 0.6 percent at 3,250 yen in Tokyo.
Analysts said the new fines — small considering Toyota’s 98.7 billion yen profit ($1.2 billion) in the first half alone — would have virtually no impact on the company’s earnings.
Mizuho Investors Securities auto analyst Ryoichi Saito described the payment as part of the company’s ongoing efforts to regain customer confidence.
“It is one positive step forward for the company to move on from the recall crisis,” he said.View Entire Story
By Elaine Donnelly
Extending sexual misconduct to combat units
Independent voices from the TWT Communities
Wall Street news before (and occasionally after) the opening bell.
One man’s perspective. Exploration and commentary designed to challenge the conventional thinking of day on the political issues affecting our nation.
Politics, economics, and business from a real world perspective.
Benghazi: The anatomy of a scandal
Vietnam Memorial adds four names
Cinco de Mayo on the Mall
NRA kicks off annual convention