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AP source: Toyota to agree to $16.4 million fine

WASHINGTON (AP) - 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.

(Copyright 2010 by The Associated Press. All Rights Reserved.)


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