After deciding not to dispute the record penalty, Toyota Motor Corp. has 30 days to pay the $16.4 million fine imposed by the US Transportation Department over its failure to promptly notify the government about the safety problems discovered in its vehicles.
In a statement, Transportation Secretary LaHood said that Toyota failed to warn the government about the safety problems in its vehicles, and as a result, it had placed its consumers at risk.
LaHood also expressed his pleasure at Toyota's move to accept responsibility for not promptly reporting defects as it is legally obligated to do.
But he would like to clarify that the agency will continue to investigate if Toyota has "lived up to all its disclosure obligations." This fine, which is equivalent to about 2% of Toyota's projected net income for the year ended March 31, may strengthen the case for plaintiffs who seek compensation.
Toyota faces at least 180 consumer and shareholder lawsuits that are applying for class-action status and at least 57 individual suits that are claiming injuries or deaths due to sudden acceleration incidents in Toyota vehicles.
Tatsuya Mizuno, director of Mizuno Credit Advisory in Tokyo, said that the fine comes on top of costs from increased incentives and vehicle testing.
Toyota actually had the chance but had opted not to dispute the fine announced on April 5. The amount is the highest amount that the National Highway Traffic Safety Administration can impose.
However, there's a possibility that Toyota will be asked to pay more penalties since the pedals supplied to Toyota by CTS Corp. "had two separate defects that may require two separate remedies," as stated in a letter Toyota received from the NHTSA.