On Eve of Congressional Hearings, Internal Memos Cast Toyota in Unsavory Light
February 22, 2010

Toyota Motor Corp., girding for what is certain to be a combative inquest from two separate House of Representatives committees this week, will not be starting off on the right foot after leaks of internal memos that could be construed as gloating about coercing favorable regulatory reaction to reports about potentially unsafe vehicles.

Most damning, perhaps, is a memo outlining a presentation in which a company executive lists as a "win" efforts that negotiated a fairly low-level recall of some 55,000 vehicles in 2007 to replace floormats.

One of the vehicles involved in that action - in which the Toyota-employee author of the presentation claims a savings of more than $100 million - was the Lexus ES, the vehicle driven last summer by a California Highway Patrol officer and three family members who were killed in an accident attributed to a stuck accelerator pedal. Shortly after that accident, Toyota began what was a string of wide-ranging recalls to ensure floormats did not interfere with the accelerator pedal and a subsequent recall to repair accelerator pedals found to be faulty.

The two recalls have affected more than 7 million Toyota and Lexus models.

Although the tone of the memo boasting of $100 million in cost savings could be little different from those summarizing many automakers' activities seeking to limit the scope of potentially costly recalls, for Toyota the memo will be seen as confirmation the company deliberately and actively underplayed years' worth of reports of unintended acceleration in its vehicles.

Conspiracy Theory

But the revelation also may add new impetus to critics who point to what may be often cozy relationships between automakers and the National Highway Traffic Safety Administration, the agency that evaluates whether consumer complaints and documented accidents merit investigations of certain vehicles or components.

The agency also is likely to come under fire for inconsistent oversight and procedures, and in the weeks leading up to Toyota's hearings before the House this week - one of which will include testimony from company president and CEO Akio Toyoda - there were numerous reports of the small army of lobbyists Toyota employs in Washington.

The situation is increasingly acquiring the earmarks of influence pedaling. One of the statements in the leaked Toyota memo indicated the company "secured safety rulemaking favorable to Toyota."

The memo also mentions delays negotiated in the implementation of certain safety features and safety engineering.

The timeline of reported incidents of unintended acceleration, including notice from one large insurance company that also had identified what it believed to be a trend in reported accidents involving unintended acceleration, may be seen as evidence Toyota was enjoying favorable treatment from NHTSA investigators.

Tuesday, the House Committee on Energy and Commerce will start the Toyota hearings. Scheduled to address the Committee that day are David L. Strickland, NHTSA Administrator, and James Lentz, president and COO for Toyot Motor Sales USA Inc.

On Wednesday, the House Committee on Oversight and Government Reform will follow with a hearing likely to be more flammable, as company president Akio Toyoda is on the docket.   - Bill Visnic, Senior Editor

Posted by Michelle Krebs at 4:00 AM under Featured , Toyota | Comments (3) | digg this | Seed Newsvine

Technorati Tags: akiotoyoda, davidstrickland, housecommitteeonenergyandcommerce, housecommitteeonoversightandgovernmentreform, jameslentz, lexuses, nationalhighwaytrafficsafetyadministration, nhtsa, toyota, toyotacongressionalhearings, toyotarecalls, unintnendedacceleration