AP source: Toyota set to agree on record fine

Toyota Motor Corp. is expected to agree to a fine of more than $16 million on for failing to promptly report to the government
problems with sticking gas pedals on its vehicles, a Transportation Department official said.

Toyota faces a Monday deadline to accept or contest the $16.4 million fine, the largest ever assessed by the government against
an automaker, over evidence it knew about the defective gas pedals in September but did not issue a recall until January.

Under federal law, automakers are required to notify the government within five business days when they find a potential
safety defect.

The transportation official said Toyota is expected to pay the full amount of the fine within 30 days as a way of avoiding
going to court against the government. The official was not authorized to speak publicly and spoke only on condition of anonymity.

The official said Toyota did not intend to admit wrongdoing explicitly but the company still faces dozens of personal injury
and wrongful death lawsuits in federal courts. Federal prosecutors and the Securities and Exchange Commission are conducting
investigations related to the recalls.

From the government's viewpoint, the official said, the agreement to pay the full fine constituted an acceptance of responsibility
for hiding the safety defect in violation of the law.

Toyota declined comment on the fine.

Toyota announced it would recall 2.3 million vehicles in January to address sticking pedals on popular vehicles such as the
Camry and Corolla. The Japanese automaker has recalled more than 8 million vehicles worldwide because of acceleration problems
in multiple models and braking issues in the Prius hybrid.

The fine was based upon timelines provided by Toyota that showed it had known about the sticky pedal defect at least since
Sept. 29, 2009, when it issued repair procedures to distributors in 31 European countries to address complaints of sticking
pedals, sudden increases in engine RPM and unexpected vehicle acceleration.

The documents also indicated that Toyota knew that owners in the U.S. had experienced the same problems.

The Japanese automaker has been weighing its options since the fine was announced in early April but analysts expected it
to pay the penalty.

"When you look at the toll it's taken on Toyota's reputation, when you look at the number of vehicles involved,
when you look at the hardship it's placed on Toyota's customer base, it's only right for Toyota to take this fine,"
said Dennis Virag, president of Automotive Consulting Group based in Ann Arbor, Mich.

The penalty is the largest the government can assess under law. Without the cap, government lawyers said Toyota could have
faced fines of $13.8 billion, or $6,000 for each of 2.3 million vehicles that were sold with defective pedals.

Transportation officials have not ruled out additional fines. The department is reviewing whether Toyota delayed for six
weeks the late January recall of the 2009-2010 Venza in the United States to address floor mats that could entrap the accelerator
pedal after making a similar recall in Canada.

Toyota recalled the Venza in Canada in December and reported to the U.S. government on Dec. 16 that the floor mats could
move forward and interfere with the pedal. Toyota told U.S. authorities at the time that the floor mats in question were not
imported into the U.S. but the Venza was added to the floor mat recall in late January.

Please enable JavaScript to view this content.

Editor's note: You can comment on IBJ stories by signing in to your IBJ account. If you have not registered, please sign up for a free account now. Please note our updated comment policy that will govern how comments are moderated.

{{ articles_remaining }}
Free {{ article_text }} Remaining
{{ articles_remaining }}
Free {{ article_text }} Remaining Article limit resets in {{ count_down }} days.