According to many media sources, Toyota Motor Corporation (NYSE: TM) will pay the $16.4 million penalty levied on it for not disclosing sticking pedal information which eventually caused the company to recall millions of its cars. The odd part of its acceptance of the fine is that Toyota will not admit that it did anything wrong. The payment will not help the firm’s other legal problems which are likely to be dominated by a number of class action suits.
The Transportation Department has been beaten up by Congress for its tardiness in discovering the Toyota problems and doing less than it should have once it was aware of them. There has been a great deal of disappointment that the agency did not fine Toyota more, but the $16.4 million fee is capped by law. If it were not , Transportation says the penalty would be over $1 billion. So, the rules are the rules.
The public and members of Congress who are already angered by the Transportation Department’s sloth will be critical of the settlement because Toyota will dodge admitting guilt. And that criticism is warranted, unless the Department rejects the payment of the fine as being both too little and also too forgiving to Toyota’s image.
Toyota sales have already rebounded, in part because of incentives. The federal government is doing nothing to impede the world’s No.1 car company from being one of the leading vehicle companies in the US again. And, it shows how poorly the Transportation Department has handled the problem.
Douglas A. McIntyre
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