Toyota Saved $100 Million by Limiting Safety Recalls

Feb. 22, 2010
Company negotiated recall of the 2007 Toyota Camry and Lexus ES with U.S.

Pressure rose on Toyota days before its chief faces a U.S. congressional grilling, as new documents showed the automaker boasted about saving $100 million by limiting its safety recalls.

Internal company documents subpoenaed by a Congress panel showed that Toyota executives reported last year that the company had limited the financial impact of its product recalls through lobbying in Washington.

In one internal document, Toyota's top North America executive Yoshimi Inaba spoke of "wins for Toyota and (the car) industry" achieved by its Washington bureau when it "secured safety rulemaking favorable to Toyota."

Inaba said in the presentation that Toyota saved $100 million by negotiating with U.S. authorities a limited recall of the 2007 Toyota Camry and Lexus ES requiring it to take back floor mats but not fix car defects.

The company also said it had avoided an investigation into rust problems affecting the undercarriage of its Tacoma pickup trucks.

Toyota reacted to the release of the documents by pledging: "Our first priority is the safety of our customers, and to conclude otherwise on the basis of one internal presentation is wrong."

Critics have attacked Toyota for its sluggish response to complaints linked to accelerator systems that cause cars to race out of control, and of covering up the defects. Former Toyota lawyer Dimitrios Biller, now involved in a legal battle with the company, has accused it of hiding and destroying evidence of safety flaws and of "a culture of hypocrisy and deception."

America's top automobile insurer State Farm has said it first reported Toyota acceleration problems to the U.S. Department of Transportation in 2004, also prompting questions as to whether U.S. regulators dithered in response.

Toyoda and Inaba are due to face questioning on the safety recalls on Wednesday at a hearing by the House Oversight and Government Reform Committee -- one of three scheduled Congress hearings on Toyota's safety woes.

A major focus is expected to be Toyota's so-called electronic throttle control or 'drive-by-wire' system in which the accelerator pedal and the engine are linked electronically rather than mechanically. Toyota has said there is nothing wrong with the system.

Congress members are also expected to examine when the world's biggest carmaker first knew of the "sticky accelerator" problems, and whether it took its time before informing U.S. regulators and the public about them.

The office of the committee's ranking Republican, Darrell Issa, said Inaba's presentation raised "significant questions regarding the interactions between Toyota Japan, Toyota North America and government regulators."

"Did regulators do their due diligence once problems were brought to their attention? Did Toyota raise potential safety problems with regulators as soon as they knew a problem existed?" asked Issa's spokesman. "But there are also questions involving what happened in-between and whether Toyota was lobbying for less rigid actions from regulators to protect their bottom-line."

Copyright Agence France-Presse, 2010

See Also
Foundation Shaken, Toyota Aims to Restore Credibility
U.S. Transportation Officials Aware of Toyota Problems in 2003
All Toyota Brake Recall Articles

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