Toyota agrees to pay extra $32.4m in fines

Toyota has agreed to pay the US government a record $32.4m (€24.5m) in additional fines to settle an investigation into its handling of two recalls, a source said today.

The penalties will settle investigations into how the Japanese company dealt with recalls over accelerator pedals that could get trapped in floor mats and steering relay rods that could break and lead to a loss of control, a person familiar with the case said.

The latest settlement, on top of a $16.4m (€12.4m) fine Toyota paid earlier in a related investigation, brings the total penalties levied on the company to $48.8m (€36m).

It caps a difficult year for the world's number one car maker, which recalled more than 11 million vehicles worldwide since last autumn as it scrambled to protect its reputation for safety and reliability.

Toyota's board of directors approved the settlement at a meeting in Japan, the source said. But that does not free Toyota from potential civil and criminal penalties in private lawsuits and other US government investigations.

In April Toyota agreed to pay the maximum fine allowed under law for a single case - $16.4m (€12.4m) - for failing to promptly alert US regulators to safety problems over sticking accelerator pedals.

Under US law, car makers must notify the National Highway Traffic Safety Administration within five days of determining that a safety defect exists and conduct a prompt recall.

At the time, Toyota denied attempting to hide a safety defect and said it agreed to the penalty to avoid a lengthy legal battle with the government.

The latest fines involve two separate safety problems affecting some Toyota passenger cars and trucks.

The first case deals with recalls in 2009 and 2010 of about five million Toyota and Lexus vehicles with accelerator pedals that could become trapped in floor mats.

Toyota had recalled 55,000 all-weather floor mats in 2007 to address pedal entrapment, but the government said its investigation found that simply removing the floor mats was insufficient.

A high-speed crash involving a Lexus in August 2009 killed four people near San Diego, prompting the government to investigate the recall. After reviewing crash evidence and other data, NHTSA investigators concluded that Toyota failed to notify the government about a known safety defect within five days.

In the second case, Toyota conducted a recall in 2004 of Hilux trucks in Japan with steering relay rods that could break and affect steering. Toyota told US regulators in 2004 that the safety problem was limited to vehicles in Japan and the company had not received similar complaints in the US

But a year later, Toyota told NHTSA the steering defect was also found in several US models and recalled nearly a million vehicles. NHTSA said in May this year that it learned about complaints from US consumers that Toyota failed to disclose to the government when it conducted the recall in Japan in 2004.

Toyota turned over thousands of documents to the government as part of the investigation. The two most recent fines are also the maximum allowed under law, and are adjusted for inflation.

The manufacturer faces dozens of lawsuits from families of people killed or injured in crashes linked to unintended acceleration.

The government's safety agency has received about 3,000 reports of sudden acceleration incidents involving Toyota vehicles during the past decade, including 93 deaths. NHTSA, however, has confirmed only the four deaths from the California crash.

Toyota says its recalls have directly addressed the safety problems with their vehicles and the company is making progress in responding to concerns.

It has found no link to electronic problems, an issue raised by safety groups as a potential cause of the vehicle problems. A separate investigation by the Transportation Department and NASA has not uncovered any electronic problems, but the probe is expected to continue into next year.

The National Academy of Sciences is reviewing potential causes of unintended acceleration in vehicles across the entire car industry and expects to issue its findings in autumn next year.

Before Toyota's recall crisis, the largest car maker fine was $1m (€758,163) paid by General Motors in 2004 for a slow response to a recall of nearly 600,000 vehicles with faulty windscreen wipers.

Steve St Angelo, Toyota's chief quality officer for North America, said today the company had "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".

US transportation secretary Ray LaHood said: "Safety is our top priority and we take our responsibility to protect consumers seriously.

"I am pleased that Toyota agreed to pay the maximum possible penalty and I expect Toyota to work co-operatively in the future to ensure consumers' safety."