Toyota Will Pay $48.8 million in Fines Related to Recalls

Over the past year, Toyota has agreed to pay $48.8 million or the equivalent of about $30 per Toyota vehicle sold in the US in 2010 in fines related to multiple product recalls.

The two latest penalties, announced earlier this month, amount to $32.425 million --$16.375 million in one case and $16.050 million in the other --in response to the US Department of Transportation's assertion that Toyota failed to comply with the requirements of the National Traffic and Motor Vehicle Safety Act for reporting safety defects to the National Highway Traffic Safety Administration (NHTSA).

Although Toyota has not admitted any violation of its obligations under the US Safety Act, Steve St. Angelo, Toyota's Chief Quality Officer for North America, said in a statement that the company see these settlements as "an opportunity to turn the page to an even more constructive relationship with NHTSA and focus even more on listening to our customers and meeting their high expectations for safe and reliable vehicles."

"As we have demonstrated in recent months, our North American operations now have a greater voice in making safety decisions, and we are taking appropriate action whenever any issues emerge, St. Angelo explained. "We've substantially strengthened our ability to investigate customer concerns through our rapid-response SMART evaluation process and other measures. And, we are continuing to equip our vehicles with advanced features, including our Star Safety System and Smart Stop Technology, both of which are standard on all new models sold in the US."

Although these fines are steep, as The New York Times points out, the payments could pale in comparison to the billions of dollars in liabilities Toyota could face if lawsuits related to the recalls succeed. As discussed in earlier blog posts, expanding global supplier networks demand constant scrutiny. Consumer safety, brand reputation and (or course) your company's bottom line are at stake.

TAGS: Finance
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