Even though they insist that they have broken no laws, Toyota has agreed to pay the United States government a record $16.4 million fine, the largest possible fine that U.S. auto safety regulators can levy per the Detroit Free Press. While the automaker has been reported as having as much as $25 billion in cash on hand, the government has capped Toyota’s fine for sudden acceleration problems that have led to almost 40 deaths. The National Highway Traffic Safety Administration (NHTSA) revealed that without the cap, Toyota would have faced $13.8 billion in fines. As it stands, separate fines and scrutiny the U.S. Securities and Exchange Commission may still follow.
Yet the damage to Toyota’s reputation is much more extensive
The Toyota recall certain cast the Japanese automaker in a negative light. Failing to report known safety issues in a timely fashion looks bad, regardless of where the truth falls. Toyota claims they didn’t try to hide any defects and made a good faith effort to investigate, but admits their communication of relevant info could have been better, reports the Free Press. Toyota says they paid the fine “in order to avoid a protracted dispute and possible litigation, as well as to allow us to move forward.”
Is glacial movement your idea of good faith effort, Toyota?
The Free Press indicates that Toyota told dealers in 31 European countries of potential sudden acceleration problems – in September 2009. A U.S. Toyota recall didn’t occur until January 2010, and then only after regulatory pressure. During the investigation phase, the NHTSA even found that Toyota began introducing production changes to address the sudden acceleration issue as far back as 2006. Nearly 40 deaths and millions of recalled cars later, Toyota is sitting in the middle of a public relations nightmare that makes $16.4 million look like chump change.