Record Setting Recall Fine Continues Toyota’s Woes

For the fourth time in two years, Toyota is facing major fines for failing to issue a recall notice in a timely fashion. Imposed by the National Highway Traffic Safety Administration, the fine is the single largest of its kind in US history, totaling $17.35 million, covering the delayed announcement of a June recall for more than 150,000 Lexus luxury SUVs over pedal entrapment dangers that could lead to unintended acceleration.

Along with the record setting fine, Toyota must also meet with officials from the NTHSA each month for the next six months to give reports on any potential safety related defects that exist across their entire vehicle line, and on progress made to improve their recall notification process. If it is deemed necessary, the NTHSA also holds the right to extend the meetings for an additional six months.

In issuing such a substantial penalty, The NHTSA is hopeful that it will encourage Toyota to make the appropriate changes to avoid additional fines in the future. “With today’s announcement, I expect Toyota to rigorously reinforce its commitment to adhering to United States safety regulations,” said Transportation Secretary Ray LaHood in a statement. In 2010, Toyota paid a total of $48.8 million in civil penalties for three separate instances of failing to issues recalls in an appropriate time, with each being the maximum allowable fine.

Though Toyota failed to admit any wrong doing, the major Japanese automaker did agree to fundamentally restructure their recall announcing procedure, consolidating the responsibilities of their quality assurance department and quickening reviews of safety issues that are received from the federal government. In a statement, chief quality officer for Toyota North America said that “We continue to strengthen our data collection and evaluation process to ensure we are prepared to take swift action to meet customer’s needs. We agreed to this settlement in order to avoid a time-consuming dispute.”

Despite its unprecedented size, the fine is unlikely to inflict any noticeable financial damage, as Toyota is projecting more than $9.7 billion in profits this fiscal year, though the harm to the maker’s reputation could reverberate for years. As the litany of safety issues continue to pile up, future buyers may choose to take their business elsewhere, to a company that does not consistently produce vehicles with the potential to catch fire. Sales remained strong throughout the year however, as buyers loyal to the brand continued to show their support.

2012 has been a challenging year for Toyota, who will soon become the company with the most recalls issued for the third time in four years, taking the title back from last year’s dubious victor, Honda. In total, 5.3 million vehicles have been recalled in the United States, more than 3 million more than any other car maker. In October, Toyota announced its largest recall in company history, affecting more than 7.4 million vehicles worldwide, including 2.5 million in the United States alone, over faulty power window switches that had the potential to overheat and catch fire.

For owners of vehicles who have been affected by a recall, delayed or otherwise, it is important to take the appropriate steps to fix these potential dangers, as operating a vehicle with a known defect leaves you exposed to the constant threat of danger. Even minor defects have the potential to cause serious accidents that can inflict life altering injuries. For victims of such accidents, there are legal protections in place to help them back onto their feet. Through the help of an experience car accident lawyer, compensation can be recovered from auto makers or negligent drivers to help mend damages that have been suffered.