Toyota Boss Mum on Big NHTSA Fine, Dividend Cut
By Bill Visnic April 7, 2010In a conference call with analysts and reporters today, Toyota Motor Corp. President Akio Toyoda spoke of the company's new and ongoing initiatives to repair its battered image and improve vehicle quality, but did not speak of the $16.4-million fine the National Highway Traffic Safety Administration handed the company last week for being slow to report knowledge of sticky accelerator pedals in many Toyota vehicles.
The call was billed as one to deal largely with financial matters, but Toyota's boss and other executives also didn't mention a report from Japan on Tuesday saying the company plans to cut its dividend for the 2009 fiscal year that ended March 31. A later story said Toyota had not decided on the matter.
Fiscal year 2008 was the first time in company history the dividend was reduced, a humbling event for Toyota after losing nearly $5 billion.
The company president also was evasive about how long Toyota will stay with an almost unprecedented level of incentives instituted in March to boost traffic in U.S. showrooms. Edmunds.com estimated Toyota spent $420 million on incentives in March, which included zero-percent financing on many volume-selling models and free scheduled maintenance for two years.
But Toyoda would not shut the door on continuing to entice consumers with incentives. The company said it hiked incentives by $400-$500 per unit in March and the president said it will continue "to use incentives as efficiently as possible."
Toyoda called the incentive drive "the quickest way" to restore customer confidence and bring back reluctant buyers in an already depressed U.S. market.
"Going forward, we intend to be very flexible," with incentive strategies, Toyoda said.
Still Talking Unintended Acceleration
Asked about whether Toyota was confident it had identified all possible causes of unintended acceleration -- it already has recalled nearly 8 million vehicles to repair sticky accelerator pedals and replace floor mats that may trap the pedal when depressed -- Toyoda stressed that no investigation by any party, including the company itself, had demonstrated the company's electronically controlled throttles or software could be to blame.
Toyoda said the company still is involvedwith an internal investigation and plans to release the results of the study when it is completed.
He also reminded that the company has put in place a chief quality officer for each major global region to ensure consumer complaints such as those about sticking throttles are quickly and effectively brought to the attention of decision makers. Toyota's slow response to reports about the throttles are the reason for the largest-ever NHTSA fine given to an automaker and documents released by Toyota in compliance with the NHTSA investigation show customers and dealers in other countries made the company aware of the problem in Europe in early 2009 and had sporadic reports years earlier.
In what may be an indicator of the strength of Toyota's brand even after such adversity, a Wall Street Journal online poll said 60 percent of Americans believed the $16.4 NHTSA fine for Toyota was too harsh. -- Bill Visnic, senior editor
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