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Toyota recalls Lexus SUVs, denies breaking rules

Toyota will recall 9,400 Lexus GX 460 vehicles to correct a problem that could lead to a loss of control. Separately, it says it did not illegally hide gas-pedal defects from safety regulators and is paying the fine just to resolve the issue.

April 19, 2010|By Ralph Vartabedian, Ken Bensinger and Jerry Hirsch

Toyota Motor Corp. will recall 9,400 Lexus GX 460 sports utility vehicles to correct a problem that could lead to a loss of control, it said Monday. It is the latest in a string of safety recalls for the automaker in recent months.

The company confirmed last week that it had isolated a defect — identified by Consumer Reports magazine during routine testing — that could cause the vehicle's rear end to lose traction while turning in certain circumstances.

Although Toyota did not identify the cause of the instability, it said it had duplicated and confirmed the Consumer Reports test and would fix the problem by modifying the onboard vehicle stability control software.

Separately on Monday, Toyota agreed to pay a record $16.4-million fine to the federal government for failing to promptly disclose that gas pedals in eight models could stick and cause sudden acceleration.

Transportation Department officials said Monday that additional fines are possible as regulators press forward with a trio of investigations concerning how Toyota handled recalls in recent years.

Unlike the most-publicized recalls, the Lexus action is not related to runaway acceleration. Instead, it's designed to address the risk of rollover. Consumer Reports issued a rare "don't buy" warning last week, leading Toyota to temporarily halt sales of the vehicle luxury SUV.

Toyota and other automakers have rapidly adopted vehicle stability control systems as safety features. They use sophisticated electronics that apply the throttle and brakes to counteract possible skids and other losses of control. No other vehicle tested by Consumer Reports, however, had the same problem, the magazine said.

"We are confident this VSC software update addresses the concern," said Steve St. Angelo, recently named Toyota's top U.S. quality official.

Engineers at Consumer Reports said the automaker probably had the correct fix.

"When we tested the vehicle you could see the light on the stability control flashing. It had identified the condition but was just slow activating the brakes to control the slide. A software update should work," said David A. Champion, one of the magazine's test engineers.

He said the stability control system worked correctly during other tests.

"It was just this one condition that it was not picking up enough," Champion said.

Both Consumer Reports and Toyota said that glitch was serious enough to cause an accident under certain conditions.

Champion said Toyota acted quickly to halt sales of the SUV, analyze Consumer Reports test results and come up with a fix.

The automaker said that 9,400 vehicles would be included in the recall, which does not include any other models. Dealers will have the software update by the end of the month, the company said.

In agreeing to pay the $16.4-million fine levied by the National Highway Traffic Safety Administration, Toyota is treading a delicate legal line. Although it won't fight the penalty, the automaker denied responsibility for what the agency has called an "inexplicable" decision to delay the recall of 2.3 million vehicles to correct sticking pedals by about four months.

By law, automakers have five business days to inform NHTSA of a potential safety defect. Toyota argued Monday that it did not break the law.

"We agreed to this settlement in order to avoid a protracted dispute and possible litigation," the automaker said in a statement. "Toyota denies NHTSA's allegation that it violated the Safety Act or its implementing regulations."

The automaker "suggested it was only paying to stay in the good graces of NHTSA," said B. Craig Hutson of Gimme Credit, a corporate credit research firm.

That stance contrasts sharply with the one taken by Transportation Secretary Ray LaHood.

"By failing to report known safety problems as it is required to do under the law, Toyota put consumers at risk," LaHood said. "I am pleased that Toyota has accepted responsibility for violating its legal obligations to report any defects promptly."

The distinction could be crucial.

Toyota is facing scores of personal-injury, product liability and class-action lawsuits in which an admission of guilt could be used as evidence against the company. But refusing to pay the fine could have led to a prolonged and public fight with the Justice Department.

ralph.vartabedian@latimes.com

ken.bensinger@latimes.com

jerry.hirsch@latimes.com

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