USA: Pressure rises on Toyota as company's president prepares for congressional hearing.

Record ID: 723373

  • Title: USA: Pressure rises on Toyota as company's president prepares for congressional hearing.
  • Date: 10th February 2010
  • Summary: WASHINGTON, D.C., UNITED STATES (FEBRUARY 22, 2010) (REUTERS) (SOUNDBITE) (English) JOAN CLAYBROOK, PUBLIC CITIZEN SAYING: "I think there are going to be fireworks because it's now clear that Toyota intentionally tried to avoid doing these recalls on the sudden acceleration vehicles and they did it for dollars and cents." CLAYBROOK LOOKING THROUGH TOYOTA DOCUMENT THAT DESCRIBES COST SAVINGS FOR AVOIDING A RECALL CLOSE-UP OF CLAYBROOK CLOSE-UP OF COPY OF DOCUMENT (SOUNDBITE) (English) JOAN CLAYBROOK, PUBLIC CITIZEN SAYING: "The regulators also are there to protect the American people and if the company misbehaves, that's when the regulators take action. Here they didn't take action and Toyota boasts about it when they're doing briefings in their Washington office with their Japanese officials and say that they've saved the company $100 million by avoiding a big recall and doing instead what's called an equipment recall of the floor mats. So I think that Toyota has been exposed and they have to eat crow. I think there's a lot that's going to go on at these congressional hearings that requires an explanation by both Toyota and the Department of Transportation which didn't do its job either."
  • Embargoed: 25th February 2010 12:00
  • Keywords:
  • Location: Usa
  • Country: USA
  • Topics: Industry,Domestic Politics
  • Reuters ID: LVA1VLHAGB1N9IPUBLJ24IGN2HH0
  • Story Text: As Toyota's president heads into congressional hearings this week, the pressure is rising. Committee members learned of a 2009 internal company document that raises the question of whether Toyota missed or ignored complaints about sudden acceleration in its vehicles to save money.
    A document claiming Toyota Motor Corp saved over $100 million by getting U.S. regulators to agree to a cheap fix for unintended acceleration problems raised pressure on the company's president as he arrived in Washington to prepare for a grilling from congress.
    Akio Toyoda is set to testify before the U.S lawmakers this week in an effort to contain a safety crisis that threatens the reputation and continued success of the automaker in the market that made it a global powerhouse.
    Toyota has recalled over 8.5 million vehicles globally in recent months for problems including sticky accelerators, accelerators that can be pinned down by loose floormats and a braking glitch affecting its hybrid models.
    The company said on Monday (February 22) it had received a federal grand jury subpoena for documents related to unintended acceleration that led to the recall of millions of cars in the United States.
    Regulators believe five deaths are associated with floor mats and are reviewing up to 29 other fatality reports to see if they are related to unintended acceleration.
    A 2009 internal document turned over to lawmakers and made available on Sunday shows Toyota's Washington D.C. staff trumpeting savings of more than $100 million by convincing regulators to end a 2007 investigation of sudden acceleration complaints with a relatively cheap floormat recall.
    The document seems certain to add to the high-stakes debate about whether Toyota missed or ignored complaints about sudden acceleration in its vehicles and whether U.S. safety regulators were tough enough.
    "I think there are going to be fireworks because it's now clear that Toyota intentionally tried to avoid doing these recalls on the sudden acceleration vehicles and they did it for dollars and cents," said Joan Claybrook of consumer advocacy group Public Citizen.
    Toyota reiterated that it was conducting a top-to-bottom review of all its operations. It said repairs are well underway.
    "Our dealers are repairing over 50,000 vehicles a day. With hundreds of thousands of vehicles already fixed since the recalls were announced and our new vehicles coming off our assembly lines already have the newly redesigned parts installed," said Bob Carter, Group Vice President and General Manager for Toyota Motor Sales, U.S.A.
    But the U.S. Department of Transportation said the document highlighted Toyota's slow response to the safety problems.
    "Unfortunately, this document is very telling," said department spokeswoman Olivia Alair in an emailed statement.
    Toyota has launched a publicity campaign to convince current and prospective customers that the company is addressing the problems. Its U.S. sales plummeted 16 percent in January and the company has estimated the recalls will cost it $2 billion at the operating level in the fiscal year ending March.
    Toyota said it would temporarily halt production in France over the next two months due to soft sales, although it did not specify the number of idle days.
    Last week, it had announced a similar stoppage at its factory in Britain for an extra week after Easter, on top of recent and planned output cuts in North America and Japan.
    Japanese rival Mazda Motor Corp said it would not launch a special marketing campaign to draw customers away from Toyota, shunning a strategy used by other car makers keen to capitalise on Toyota's recall woes.
    Toyoda, who is set to testify Wednesday after initially ruling out such an appearance, has acknowledged that the automaker founded by his grandfather let its standards slip during fast growth over the past decade.
    The company has been tight-lipped about Toyoda's schedule, with a spokesman declining to confirm whether its president was already in the United States. Japanese media reported he had arrived in Washington and television showed images of his private jet.
    Analysts said Toyoda's appearance in Washington will be a defining moment in whether and how quickly it can move beyond its safety crisis.
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