Toyota began receiving complaints about its potentially lethal sudden acceleration problem from Europe in late 2008, and issued repair guidelines for those countries last September. It didn’t announce an accelerator recall here until January. Now the Transportation Department wants to fine Toyota a record $16.4 million for failing to notify regulators quickly about the flaw. That’s the largest fine the government can levy against an automaker under the law. Toyota’s most recent profit was $1.7 billion.
At the risk of putting too fine a point on it, this is one reason white-collar malfeasance pays. The laws and regulations are a patchwork; the corporations have the finest lawyers money can buy, as well as politicians where they have factories; regulators for years have been too cozy with industry. For example, Toyota bragged that it had saved $100 million in recent years by negotiating smaller recalls with regulators.
Even the $2.3 billion fine against Pfizer for fraudulent marketing practices is a “cost of doing business” for a corporation that banked $50 billion in annual revenue. But it’s better than the penalty Toyota faces.
Will “market forces” apply their own rough justice to Toyota? Perhaps, with the help of civil lawsuits (the “trial lawyers”). And at least the company’s president has apologized and promised reforms. That’s more than most American CEOs would do, least of all the princes of Wall Street. But the double standard will remain. The low-income kid who robs a liquor store goes away quickly, hard time. The same isn’t true for corporations — even though the Supreme Court holds they have the same rights as a person — or in most cases for their highly paid leaders.
The Back Story: In the What Goes Up Must Come Down Dept., construction is the biggest job loser from the Great Recession. According to federal data analyzed by Huffington Post, construction shed 1.9 million jobs since the Great Recession began in December 2007. Durable goods lost 1.6 million, while business and professional services lost nearly 1.5 million. Education and health positions rose by 883,000.
Today’s Econ Haiku:
The rally was fast
But today it slipped on Greece
The Euro got fried