Toyota To Pay $1.2B To NHTSA Over Defective Accelerator Pedals
The U.S. Department of Justice federal prosecutors were ready to charge Toyota with wire fraud for the sale of thousands of vehicles from late 2009 to early 2010 because the company’s engineers were aware of the defective accelerator pedals.
Why are they not prosecuting Toyota now? The company settled with the justice department for $1.2 billion, the largest penalty an automaker has ever had to pay. The total fine price could have been even higher from the NHTSA – $13 billion (or $17 million per defect case).
Eric Holden, U.S. attorney general, said the conduct by Toyota is reprehensible because it blatantly disregarding the laws and systems created to look out for consumer safety. And, by the company’s admission, the brand was more important than the customers.
Holden said other car companies need to learn from this mistake, saying a recall could damage the reputation of a company but deceiving the customers could leave a lasting impression. Before the settlement, Toyota vowed it would change the way defects were handled with new procedures, executives and committees so recalls are speedier (as seen in recent past). The federal prosecutors’ deal includes an outside monitor for the next three years who is to make sure the company will abide by its promise.
The system put in place are designed to stop defective vehicles from injuring or killing the occupants. And, in terms of the GM recall, the system itself has some defects.
Automakers are annually issuing recalls of up to 180. In 2013, the recalls affected over 16 million vehicles – cars and trucks. Toyota repaired five million of those recalled vehicles for safety defects.
Most automakers will issue recalls on their own and, for the most part, not have any reported injuries. Others will come from the pressure the National Highway Traffic Safety Administration that attains consumer complaints and information from automakers about possible defects.
NHTSA is often fighting with automakers about defects, although both safety experts and government audits have criticized the agents for not having enough people in the defects office and not having the tools necessary to find problems owners have complained about.
With the GM ignition recall, thousands of owners sent their complaints to NHTSA and GM for 13 years before any action was taken by GM.
The recall battles go both ways: automakers will fight the agency for months or years just to avoid being embarrassed or having to deal with the cost. Automakers have claimed they issued recalls just because, not because the vehicle had an actual safety problem so the agency would stop investigating them.
Toyota isn’t the only one paying for their mistake. Ford paid $17.3 million to the NHTSA for a 2012 recall of nearly 530,000 vehicles that had a possible defect in the throttle (it was sticking). This issue led to one death and several crashes. Ford was asked about the issue in July 2012, with the company issuing a recall several days later. Regulators learned the automakers inspected the issue back in 2009 but nothing was handled.
GM, like Toyota, promised to better its rules regarding recalls and tap someone new to be in charge of the recalls. GM is facing the same scrutiny that Toyota did: federal investigations, hearings, huge government finds and legal settlements. It’s not sure how the cases are going to change the way automakers handle complaints regarding safety defects.
Online News Heard Now
Short URL: http://www.onlinenewsheardnow.com/?p=2778
Posted by