This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Ford, Toyota, GM: Comparing the Fines


U.S. Transportation Secretary Ray LaHood announced on April 5 that the National Highway Traffic Safety Administration (NHTSA) is seeking the maximum civil penalty of $16.375 million against Toyota for failing to notify the auto safety agency of its dangerous "sticky pedal" defect for at least four months, despite knowing of the potential risk to consumers.

"This is just the first salvo in what promises to be a very expensive legal battle for Toyota," Wall Street Strategies analyst David Silver wrote in a note to investors. "The government indicated it is still considering more fines for the company; however, what could hurt worse for the company is that... [the] announcement could be used as fodder for the billions of dollars worth of civil lawsuits (and class action lawsuits) that have been filed against Toyota."

The penalty being sought against Toyota would be the largest civil penalty ever assessed against an auto manufacturer by NHTSA. Noteworthy is that this penalty relates only to Toyota's "sticky pedal" defect. The NHTSA is still investigating Toyota to determine if there are additional violations that warrant further penalties.

"Auto manufacturers are legally obligated to notify NHTSA within five business days if they determine that a safety defect exists," the announcement said. "NHTSA learned through documents obtained from Toyota that the company knew of the sticky pedal defect since at least September 29, 2009."

The NHTSA said that on that day Toyota issued repair procedures to its distributors in 31 European countries and Canada to address complaints of sticky accelerator pedals, sudden increases in engine RPM and sudden vehicle acceleration, and that the documents also show that Toyota was aware that consumers in the United States were experiencing the same problems.

About 2.3 million vehicles in the U.S. were recalled in late January for the sticky pedal defect.

3 of 7

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,113.54 +61.81 0.36%
S&P 500 1,983.53 +9.90 0.50%
NASDAQ 4,456.0160 +31.3120 0.71%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs