Toyota Motor Corp. "knowingly hid a dangerous defect" that caused its vehicles to accelerate unexpectedly, the U.S. said, for the first time accusing the world's largest automaker of breaking the law.
Transportation Secretary Ray LaHood proposed a record civil penalty of $16.4 million, the most the government can impose. The fine recommended yesterday escalates the confrontation between Toyota and LaHood, who initially praised the carmaker for its handling of recalls the company attributed to faulty accelerator pedals.
The fine was announced the week after Toyota reported U.S. sales rose 41 percent in March with the help of no-interest loans and discount leases, signaling the company may be recovering from recalls of more than 8 million vehicles worldwide.
The Transportation Department's action showed "safety matters and they're going to be tough as nails," Joan Claybrook, a former head of the National Highway Traffic Safety Administration, said in an interview. "That's very appropriate. They caught Toyota red-handed."
The Japanese automaker waited at least four months before telling the agency that accelerator pedals might stick, LaHood said in a statement yesterday. Companies have five business days to report safety defects, the agency said.
"We now have proof that Toyota failed to live up to its legal obligations," LaHood said in the statement. "Worse yet, they knowingly hid a dangerous defect for months from U.S. officials and did not take action to protect millions of drivers and their families."
Multiple Fines Possible
The penalty could "very possibly" be the first of multiple fines, said Claybrook, who is former president of Public Citizen, a Washington-based consumer advocacy group.
Toyota hadn't received NHTSA's letter on the fine, according to an e-mailed statement yesterday from the company's North American sales unit.
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