by Christopher Freeburn | December 18, 2012 9:56 am
Toyota (NYSE:TM) will pay a record financial penalty to U.S. regulators for its failure to promptly advise the government of safety issues with its vehicles.
The National Highway Traffic Safety Administration (NHTSA) has fined the Japanese auto giant $17.4 million, the largest amount legally permissible, and the fourth major federal penalty issued against the carmaker in two years, the Associated Press noted.
Despite news of the fine, Toyota shares rose more than 2% in Tuesday morning trading.
In June, Toyota was forced to recall 154,000 of its 2010 Lexus Rx 350s and RX 450h models over driver-side floor mats that could interfere with the gas pedal, leading to unexpected bursts of acceleration. The government said the auto giant didn’t report the problem to U.S. regulators within five days of learning about them.
After the NHTSA started receiving complaints about the problem, it contacted Toyota in May. A month later, Toyota admitted that it had received 63 reports about the problem. Two years ago, Toyota was fined $48.8 million over three similar safety violations.
Toyota will pay the new fine, but will not concede any wrongdoing. The company has recalled 14 million vehicles over defective floor mats and gas pedals. In the third quarter of this year, Toyota recorded earnings of $3.2 billion.
Toyota has been plagued by a series of high-profile vehicle recalls over the past several months, including 7.4 million vehicles worldwide last month over faulty power-window switches.
Source URL: http://investorplace.com/2012/12/toyota-hit-with-record-17-4m-fine-for-safety-recall-delays/
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