Toyota to pay $16 million U.S. fine

Gregory Warner Apr 19, 2010
HTML EMBED:
COPY

Toyota to pay $16 million U.S. fine

Gregory Warner Apr 19, 2010
HTML EMBED:
COPY

TEXT OF INTERVIEW

Steve Chiotakis: Reports are Toyota will likely pay a U.S. government-imposed fine and move on. The carmaker had until today to decide whether to shell out $16 million for not notifying the government promptly about defective gas pedals. Regulators say Toyota knew about the problem in September, but didn’t issue a recall until January. Marketplace’s Gregory Warner is with us live from Philadelphia this morning with the latest. Good morning, Gregory.

Gregory Warner: Good morning, Steve.

Chiotakis: So, 16 million bucks for a company like Toyota, that sounds like peanuts. Why is this fine even news?

Warner: Yeah, $16 million is about what Toyota makes in 45 minutes — at least that’s what I calculated for 2009, and 2009 was a bad year. But thew news is here that by agreeing to pay the fine, the company is that by agreeing to pay the fine, the company is quote “accepting responsibility for hiding the safety defect.” That does not mean the company is admitting guilt. Toyota is walking a fine line here, of course, cause they’re preparing their defense against dozens of personal injury cases and wrongful death suits filed against them in the past few months.

Chiotakis: So what exactly was the government’s claim against Toyota, Gregory?

Warner: In the words of Transportation Secretary Ray LaHood, who announced the fine this month, Toyota quote “knowingly hid a dangerous defect” and did not take action “to protect millions of drivers and their families.” Lawyers for the injured drivers are going to argue in court that Toyota committed consumer fraud and racketeering, that the company conspired to mislead consumers and the government. Racketeering suits are hard to prove but they pay big — a judge can triple the amount that a defendant would pay. And if juries agree, we’ll be hearing about claims in the billions.

Chiotakis: I’m sure. All right, Marketplace’s Gregory Warner, reporting from Philadelphia this morning. Gregory, thanks.

Warner: Thanks Steve.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.