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LaHood Admits Toyota Fine Not Big Enough

Ray LaHood, the transportation secretary.
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Ray LaHood, the transportation secretary.

The message from the Secretary of Transportation is clear: If he could, he would fine Toyota more than the proposed $16.4 million the Feds are seeking for the automaker failing to alert the government quickly enough about defective gas pedals.

When I asked Ray LaHood today if he would rather see Toyota pay a higher fine, he said, "Of course."

Fact is, the federal government is limited by the Tread Act on how much it can fine an automaker for failing to notify authorities of a defect within 5 business days. The maximum penalty is $16.375 million. Toyota hasn't determined if it will fight the fine or pay it. Either way, some, including LaHood believe the company is not paying enough.

When you bring this up to Toyota executives, they'll point out the fine is far larger then any penalty other automakers have been hit with in the past. True. But you could also argue that waiting four months to recall 2.3 million vehicles with defective gas pedals is a more serious violation than other recalls in recent years.

It's all a matter of perspective.

Should the U.S. be able to slap larger fines on automakers? In my opinion, Yes. Limiting penalties does not send a serious enough threat to automakers that they have to follow the federal recall laws.

What should the be, I'm not sure.

As for Toyota, the fine is what it is. It's the maximum allowed under the law, even though that's not enough for the Secretary of Transportation.

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