Toyota Motor (TM)

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Toyota Took Too Long to Respond, Executive Says



By MICHELINE MAYNARD
Published: February 23, 2010

WASHINGTON — A top Toyota executive will tell a House committee on Tuesday that the automaker took “too long to come to grips with a rare but serious set of safety issues.”

Representative Henry A. Waxman, shown here in April 2009, said Toyota dismissed the idea that computer issues could be at fault for sticking accelerator pedals, rather than properly investigate it.

The executive, James E. Lentz III, the president of Toyota Motor Sales U.S.A., in remarks prepared for the House Energy and Commerce Committee, tried to assure lawmakers, and by extension American consumers, that the repairs that dealers had begun were the correct solution, and he maintained the computers in the cars were not to blame.

“We are confident that no problems exist with the electronic throttle control system in our vehicles,” Mr. Lentz said. The carmaker has identified problems with the floor mats and the accelerator pedal as the causes of unintended sudden acceleration in the cars.

The comments were partly intended to rebut leading Democrats on the committee, who accused Toyota of relying on a flawed study in dismissing the notion that computer issues could be at fault for sticking accelerator pedals, and then made misleading statements about the repairs. The Democrats, Henry A. Waxman, the chairman of the energy committee, and Bart Stupak, a subcommittee chairman, made their comments in a 11-page letter to Mr. Lentz. The letter was released on Monday.

In his remarks, Mr. Lentz again apologized for the way Toyota has handled its recall crisis. Toyota earlier released more than 75,000 pages of documents, including 20,000 in Japanese, that the committee had requested.

“In recent months, we have not lived up to the high standards our customers and the public have come to expect from Toyota,” Mr. Lentz said. “Simply put, it has taken us too long to come to grips with a rare but serious set of safety issues.”

He went on, “The problem also has been compounded by poor communications both within our company and with regulators and consumers.”

Since last fall, Toyota has recalled more than eight million vehicles worldwide — more than six million in the United States alone — in two actions related to complaints about accelerator pedals that can stick, making it hard to stop the vehicles.

This month, Toyota released a study of vehicles it had commissioned from Exponent, a research company, that said electronics were not to blame. But in the letter to Mr. Lentz, Mr. Waxman and Mr. Stupak said Toyota had dismissed the idea and had not investigated it properly. Further, it said the six vehicles involved in Exponent’s study, none of which were shown to have problems with their electronic systems, made up too small a sample from which to draw a conclusion.

“Our preliminary assessment is that Toyota resisted the possibility that electronic defects could cause safety concerns, relied on a flawed engineering report and made misleading public statements concerning the adequacy of recent recalls to address the risk of sudden unintended acceleration,” the representatives said.

The letter was released a day after the disclosure that Toyota had estimated that it saved $100 million by negotiating with regulators for a limited recall of 2007 Toyota Camry and Lexus ES models for sudden acceleration, the same problem that has since prompted it to recall millions of cars.

The estimate was in a confidential internal Toyota presentation from July 2009 listing legislative and regulatory “wins” for the company. The presentation was among thousands of pages of documents provided in response to subpoenas by the House Committee on Oversight and Government Reform, another panel holding hearings on Toyota’s safety problems.

Toyota’s chief executive, Akio Toyoda, is set to testify before the oversight panel on Wednesday.

The representatives, in a separate letter to the transportation secretary, Ray LaHood, said they also were concerned about the competency of investigations into Toyota’s problems by the National Highway Traffic Safety Administration, the federal safety agency.

“It appears that N.H.T.S.A. lacks the expertise needed to evaluate defects in vehicle electronic controls, and its response to complaints of sudden unintended acceleration in Toyota vehicles appears to have been seriously deficient,” the letter to Mr. LaHood said.

In another document that came to light Monday, Toyota said in a second July 2009 document that it faced a “more challenging” regulatory environment under the Obama administration, which it said was not “industry friendly.” In the internal document, which was first reported by Politico.com, Toyota said the federal safety agency was focusing more on legal issues and less on engineering issues.

On Monday, Toyota confirmed that it faced two more investigations related to the unintended acceleration and braking that had led to the recall of millions of its cars.

Toyota said Monday night that it was expanding the number of vehicles that will receive a brake override system, meant to reduce engine power when the accelerator pedal and brake pedal are pressed simultaneously. It will add the feature on 2005 to 2010 model Tacomas, 2009 to 2010 Venzas and the 2008 to 2010 model Sequoia. It already announced plans to install the system on five other models. In a statement, Toyota said it had received a Securities and Exchange Commission request and a federal grand jury subpoena for documents related to the sudden unintended acceleration.

Toyota and its subsidiaries received a subpoena related to reports of sudden acceleration on Toyota vehicles and brake problems on its Prius hybrid on Feb. 8 from the United States attorney’s office for the Southern District of New York. The S.E.C. request, made on Friday from its Los Angeles office, was to voluntarily submit documents. Toyota Motor Sales U.S.A. separately received a subpoena from the same office for related documents on Toyota models, including the company’s disclosure policies.

The Toyota presentation involving the $100 million estimate was prepared last summer when Yoshimi Inaba, the president of Toyota’s North American operations, was in Washington for meetings with its staff. Mr. Inaba is among the officials set to testify at the hearings this week. The document was first reported on Sunday by The Detroit News.

In the document, Toyota executives said the National Highway Traffic Safety Administration, which investigates safety complaints, had become “more sensitive to public/Congressional criticism, resulting in more investigations and more forced recalls.”

But the company said it had achieved “favorable safety outcomes” and “secured safety rulemaking favorable to Toyota.”

Among those rulings was a 2007 recall of the Camry and Lexus ES 350 sedans for complaints that their accelerator pedals could become stuck.

In the document, Toyota said it had “negotiated an equipment recall” without a finding of a defect, saving $100 million.