Toyota Agrees to Pay $16.4 Million Fine
TORRANCE, Calif. — Toyota will not fight the $16.4 million fine the National Highway Traffic Safety Administration is seeking from the automaker for allegedly not informing proper authorities of its "dangerous sticky pedals" issues in a timely manner.
Toyota said Monday it has agreed to settle the civil matter and pay the penalty in full, but automaker officials still argue that the company didn't violate the Safety Act or "try to hide a defect."
Basically, Toyota said it has accepted the fine so it can "move forward," prevent further dispute and litigation from being drawn out.
"We agreed to this settlement in order to avoid a protracted dispute and possible litigation, as well as to allow us to move forward fully-focused on the steps to strengthen our quality assurance operations," the automaker said in a statement. "This will allow us to focus on delivering safe, reliable, high quality vehicles for our customers and responding to consumer feedback with honesty and integrity."
Officials added: "We regret that NHTSA tentatively concluded that they should seek a civil penalty. Toyota denies NHTSA's allegation that it violated the Safety Act or its implementing regulations."
Toyota argues it put forth a "good faith effort" to examine the issues and what could be done to fix the problems.
"We have acknowledged that we could have done a better job of sharing relevant information within our global operations and outside the company, but we did not try to hide a defect to avoid dealing with a safety problem," according to the company.
Offering his take on Toyota's decision, Kelley Blue Book's James Bell said Monday's announcement signals that the automaker is perhaps on the "road to recovery."
It won't be easy though, with this news now being further ammunition for those who have filed suit against the automaker, he suggested.
Bell, executive market analyst for KBB, said that "it will be a painful and costly road, as this decision also assists the hundreds of individual and class-action lawsuits that have lined-up to take their own swings at Toyota."
That said, while it may appear unfavorable for Toyota in its aforementioned lawsuits, the automaker's decision may help it in the "court of public opinion," Bell argued.
He said that "in the court of public opinion, we expect that this decision will help allow the 'Toyota story' to fade from the headlines, since to fight this fine may have exposed new facts and figures on what they did or did not know … and when they shared information.
"Consumers are savvy and should notice the lack of headlines as they re-enter the market and many Toyota dealers across the country," Bell added.
More Toyota Recalls
In other news from the automaker, Toyota recalled around 9,400 model-year 2010 Lexus GX 460 SUVs on Monday. It is doing the voluntary recall to update the Vehicle Stability Control system's software.
The automaker explained that VSC can help control traction loss when front or rear wheels slip while the vehicle is taking corners.
"Toyota's objective is to provide a high level of safety and quality, while meeting or surpassing governmental regulations. Our engineers have conducted tests to confirm the VSC performance issue raised by Consumer Reports, and we are confident this VSC software update addresses the concern," explained Steve St. Angelo, Toyota chief quality officer for North America.
The automaker said that VSC software update will be provided to all Lexus dealers by the end of the month. When dealerships have the upgrade, owners should bring their GX 460 models to the closest store to have it updated at no charge, Toyota stressed.
"From the moment we heard about this issue, Lexus and our dealers acted quickly to resolve the situation. Our dealers will now personally reach out to customers to set up appointments to make this modification. Lexus has always been about providing exemplary customer satisfaction and this will be another opportunity to demonstrate that," shared Mark Templin, Lexus group vice president and general manager.
Officials said Lexus will start mailing out letter to GX 460 customers impacted by the recall early next month. Lexus is also offering loaner vehicles to any owners of the 2010 model who are concerned about driving the vehicle before recall work is done.
There was recall-related news at Toyota last week, as well.
On Friday, it announced a voluntary safety of roughly 600,000 Sienna two-wheel drive minivans from model years 1998 through 2010.
The recall, which involves units sold in the U.S., is to tackle potential corrosion in the spare tire carrier cable.
The automaker explained that Siennas driven in cold-climate areas in the Eastern and Midwestern U.S. — where there is a lot of salt used on the roads during wintry weather — may be the ones experiencing this problem.
"Continued prolonged exposure to road salts may cause excessive corrosion of the carrier cable in some of these vehicles," the automaker said. "In the worst case, the carrier cable may fail and the spare tire could become separated from the vehicle, a road hazard for following vehicles that increases the likelihood of a crash."
Toyota is looking for a solution to the problem, but until it finds one, the automaker will send interim notices to owners to have their vehicles undergo a preliminary inspection at a dealership.
When the automaker has found a solution, it will provide a secondary notice to let customers know the remedy is ready.
"Toyota is listening to its customers attentively, and we want to make sure their voices are heard. As part of that commitment, we are providing free inspections of the spare tire carrier cable even in states that are not included in this recall," stated St. Angelo.
"We are also working diligently to develop a remedy as soon as possible," St. Angelo added.
Toyota noted that the recall includes vehicles originally sold or currently registered in the following areas: Connecticut, Delaware, Illinois, Indiana, Kentucky, Massachusetts, Maryland, Maine, Michigan, Minnesota, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Virginia, Vermont, Washington, D.C., Wisconsin and West Virginia.
There will be special service campaign notifications for Sienna owners in other states that will let them know what to do about an inspection if they wish to pursue one, which Toyota will perform — along with the repair — for free.