Gross & Schuster

Gross & Schuster

Free consultations - No fee if no recovery
In-home & hospital visits available

You Are Our Focus. Call Us To Learn How We Can Help You.

PENSACOLA 850-434-3333

FORT WALTON 850-244-7191

CRESTVIEW 850-682-3000

Record fine against Toyota a balance sheet rounding error

The National Highway Traffic Safety Administration has decided to play hardball with the Toyota Motor Corp. by slapping the company with a record fine for safety violations. The carmaker will pay $17.2 million for delaying a safety recall and not reporting other problems in a timely manner. The violations included floor mat problems that could jam the accelerator and send the car speeding out of control. Sounds like a steep penalty until you consider Toyota’s profit for the third quarter alone was $3.2 billion. That’s about $1.46 million an hour, so it will take just under 12 hours to pay off the fine, which equals 0.0053125 percent of Toyota’s quarterly profit.

The fine is the largest allowed by law, so it’s not like the federal government isn’t trying. Toyota has been penalized four times in the last two years, and in 2010 alone paid out $48.8 million to settle three violations. For those keeping count at home, that took about 33 hours and 15 minutes worth of profits out of shareholder’s pockets. Some safety experts wonder if such puny financial penalties have any real impact, or if the car companies see them as a cost of doing business.

Toyota admits no wrongdoing, and promises to collect more data faster and get it to the government sooner. The company says it settled to avoid expensive litigation, and insisted that it works closely with NHTSA to keep drivers safe. Toyota has recalled over 14 million vehicles to fix floor mat and sticky gas pedal problems. The company is supposed to report significant problems within five days, but it delayed notification about the floor mat-gas pedal interference for more than a month. NHTSA says “every moment of delay” puts drivers at risk of death or injury.

Starting next year the maximum fine NHTSA can levy rises to $35 million, but these are civil penalties, not criminal. So long as Toyota is willing to pull out the checkbook and buy its way out of trouble, company officials have little incentive to change the way they do business.

Source: The Associated Press, “U.S. fines Toyota for delayed safety reports,” Tom Krisher, Dec, 18, 2012

Related Articles

On behalf of Terence Gross of Gross & Schuster, P.A. posted in Car Accidents on Thursday, June 3, 2010. A recent study by the Center for Excellence in Rural Safety at the University of Minnesota found that Americans strongly support public policies that have been statistically shown to reduce traffic[…]

On behalf of Terence Gross of Gross & Schuster, P.A. posted in Car Accidents on Wednesday, June 16, 2010. Harold L. Stewart of Jay, former police chief in Flomaton, has passed away from injuries he received in a May 14 car accident in Century. According to the Florida Highway Patrol,[…]

Click for the BBB Business Review of this Attorneys & Lawyers in Pensacola FL

© 2015 by Gross & Schuster, P.A. All rights reserved.
Disclaimer | Site Map | Privacy Policy

Call Us To Learn How We Can Help You. 850-434-3333