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Toyota to pay $16.4 mln fine: US official

April 19, 2010

Japanese auto giant Toyota was expected to sign legal documents Monday, agreeing to pay the US government a record fine of nearly 16.4 million dollars for concealing gas pedal defects.

"By paying the full civil penalty Toyota is accepting responsibility for hiding the safety defect ... in violation of the law," a senior US government official told AFP late Sunday.

A Toyota spokesman declined to comment. But a well-informed source told AFP the automaker was expected to sign the necessary legal documents early Monday.

"They've agreed to pay the maximum fine in record time, the most we can get," the source said. "They have 30 days to pay."

Earlier this month, the US Department of Transportation said it was seeking "the maximum civil penalty of 16.375 million dollars against Toyota" after it failed to report its safety defects in a timely manner.

Toyota had failed to report "the dangerous 'sticky pedal' defect for at least four months, despite knowing of the potential risk to consumers," said the National Highway Traffic Safety Administration, the department's watchdog. Under federal law, automakers are required to disclose defects within five business days.

It is the largest civil fine against an automaker ever sought by the NHTSA. To date, the largest federal penalty paid by an automaker was one million dollars, levied against General Motors in 2004 for delaying a windshield wiper recall.

Toyota has recalld around 2.3 million cars in the United States for the pedal defect.

Worldwide it has recalled more than eight million cars over several problems, including the sticking accelerator pedal which caused cars to speed out of control.

Toyota had until Monday to agree to pay the fine, or contest it. If the two parties had not agreed a settlement, the matter could have gone to court.

The sudden acceleration problem allegedly caused by the gas pedal defects has been blamed for more than 50 deaths in the United States, and Toyota faces a slew of legal challenges in US courts.

The automaker has been hit with at least 97 lawsuits seeking damages for injury or death linked to sudden acceleration and 138 class action lawsuits from customers suing to recoup losses in the resale value of Toyota vehicles.

A San Diego court recently heard arguments from two dozen attorneys across the United States who want to consolidate the lawsuits into one multibillion-dollar case in a single jurisdiction.

In March, the US government announced a series of investigations into the causes of "unintended acceleration" in Toyota and other brands of cars, calling in NASA engineers to help.

The Department of Transportation plans to buy cars that are suspected of unintended acceleration and subject them to a battery of tests.

The NHTSA is itself under fire for allegedly failing to adequately review consumer complaints about Toyota and other cars, but it is the beleaguered Japanese carmaker that remains in the spotlight for now.

Toyota overtook General Motors in 2008 as the world's top automaker. But the safety issues that have recently bedeviled it have raised questions about whether it sacrificed its legendary quality to become number one.

Toyota executives were hauled over the coals in the US Congress earlier this year and the company's previously stellar reputation for safety was left in tatters.

The latest blow to the company's reputation came just last week.

Toyota suspended production and global sales of the Lexus GX 460 sport utility vehicle after US magazine Consumer Reports gave the SUV a rare "Don't Buy: Safety Risk" rating.

When pushed to its limits, the rear of the GX "slid out until the vehicle was almost sideways before the electronic stability control system was able to regain control," the magazine said.

The US government also issued an advisory asking motorists to use caution when driving the vehicle.

Also, last week, the embattled automaker decided to recall 870,000 Sienna minivans in the United States and Canada because of corrosion problems.

The recall affects 1998 through 2010 Sienna minivans that Toyota said could experience corrosion in the spare tire carrier cable if they have been operated in cold climates with high road salt use.

In total, the automaker has issued roughly 10.5 million recall notices worldwide in the last seven months.

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