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Toyota to pay record US fine, announces Lexus recall

April 20, 2010

Toyota agreed Monday to pay a record 16.4 million dollar fine for hiding gas pedal defects and announced yet more recalls as the US government warned it was not done investigating the Japanese automaker.

"By failing to report known safety problems as it is required to do under the law, Toyota put consumers at risk," US Transportation Secretary Ray LaHood said in a statement.

"I am pleased that Toyota has accepted responsibility for violating its legal obligations to report any defects promptly."

Toyota failed to disclose a "sticky pedal" defect for at least four months despite knowing the potential risk to consumers, the National Highway Traffic Safety Administration (NHTSA) said.

Under federal law, automakers are required to disclose defects within five business days.

Toyota said in a statement that it "denies NHTSA's allegation that it violated the Safety Act or its implementing regulations" and regrets that the agency chose to levy a fine.

"We believe we made a good faith effort to investigate this condition and develop an appropriate counter-measure," the world's largest automaker said in a statement.

"We have acknowledged that we could have done a better job of sharing relevant information within our global operations and outside the company, but we did not try to hide a defect to avoid dealing with a safety problem."

Toyota said it agreed to pay the fine "in order to avoid a protracted dispute and possible litigation, as well as to allow us to move forward fully-focused on the steps to strengthen our quality assurance operations."

It is the largest civil fine against an automaker ever sought by the US authorities and relates to defects that affected 2.3 million vehicles recalled in the United States in January.

Toyota has come under intense scrutiny after it issued roughly 10.5 million recall notices worldwide in the last seven months.

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.

More than 50 deaths in the United States have been blamed on defects that allegedly caused the vehicles to speed uncontrollably and Toyota faces a slew of legal challenges in US courts.

In March, the US government announced a series of investigations into the causes of "unintended acceleration" in Toyotas and other brands of cars, calling in NASA space agency 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.

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 Thursday after US magazine Consumer Reports gave the SUV a rare "Don't Buy: Safety Risk" rating because of a rollover danger.

On Monday, it announced a formal recall of the 6,000 affected vehicles and said "vigorous testing" had found a remedy for problems with the vehicle stability control system.

"Lexus is confident that the update will make the performance of the GX even better for our customers," said Mark Templin, Lexus group vice president and general manager.

The embattled automaker had already recalled 870,000 Sienna minivans in the United States and Canada on Friday because of corrosion problems that could cause the spare tire to fall off.

Toyota said it has implemented a number of measures to respond more rapidly when customer complain of problems with their vehicles and to improve its overall quality standards.

"We are proud of the vehicles that Toyota produces and are confident they are among the safest on the road," the automaker said in a statement.

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