Obama Urges Toyota, Rivals to Act Fast on Defects

President predicts Toyota will recover from problems

President Barack Obama warned carmakers their brands are at risk if they drag their feet on safety recalls, in his first public remarks on Toyota's deepening defect crisis. Obama noted that Toyota was now under federal investigation over its recalls but predicted the company would recover from its present troubles.

"Every automaker has an obligation when public safety is a concern to come forward quickly and decisively when problems are identified," Obama said in an interview with Bloomberg BusinessWeek magazine. "We don't yet know whether that happened with Toyota. That's going to be investigated," he said.

"My hope is that, moving forward, all automakers recognisz that their brands are at stake when it comes to safety issues."

Obama said Toyota was likely to recover from its woes, which have left the company staring at recall-related costs of at least two billion dollars and triggered a plunge in its share price.

"Obviously, Toyota has been an extraordinary automaker for a very long time, and I suspect that they will continue to be, despite this recent glitch," he said.

Strident remarks by Obama's transport chief on the Toyota crisis have raised eyebrows in Japan, particularly given the U.S. government's major stake in rivals General Motors and Chrysler. Transportation Secretary Ray LaHood vowed to hold the Japanese firm's "feet to the fire."

LaHood panicked markets last week when he said that owners of millions of Toyota vehicles affected by accelerator defects should "stop driving" them, but later toned down his remark.

U.S. officials and lawmakers are planning to haul in Toyota officials, including embattled boss Akio Toyoda, to explain the massive recall and answer accusations they were slow to respond to the accelerator and brake problems.

Toyota said on Feb. 12 that Toyoda had put off a visit to Washington until "around early March" because of heavy snow now blanketing the capital. It declined to say whether he would miss a February 24 hearing by a House of Representatives committee into the quality issues.

Darrell Issa, the top Republican on the Oversight and Government Reform Committee, said he would ask the panel's Democratic chairman to invite Toyoda to attend on February 24. Issa said US lawmakers were eager to "hear directly" from the Toyota chief about his company's woes. Toyota's North America president Yoshimi Inaba is scheduled to appear at the February 24 hearing. Further congressional hearings on the matter are also scheduled for the following day and on March 2.

A federal court hearing in San Diego next month will aim to group legal action involving 22 law firms across 16 states involving Toyota vehicle owners chasing financial compensation as a result of the crisis.

Toyota faces more potential trouble after U.S. authorities said they may investigate some models of its best-selling Corolla following more than 80 complaints that its steering veers off-center at high speeds.

The firm said it was considering new measures to improve its disclosure on quality improvements, after the Yomiuri newspaper reported Toyota plans to disclose all flaws it has fixed following complaints from drivers.

Toyota shares gained 2.1% to 3,460 yen on Feb. 12, continuing to recover some lost ground after plunging by more than 20% in about two weeks.

Copyright Agence France-Presse, 2010

See Also
Toyota Facing Avalanche of U.S. Lawsuits
Atop the Mountain, Toyota Facing Questions
All Toyota Brake Recall Articles

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