Toyota hopes to overcome mounting problems with a promise to do better.
There’s plenty of action all around Vancouver, as the Winter Olympics enter their final days, but the real face-off won’t be between the U.S. and Russian hockey teams, but between U.S. lawmakers and officials from Toyota gathered today and tomorrow on Capitol Hill.
The House Energy and Conference Committee will be looking into the ongoing scandal involving Toyota’s sudden rash of safety problems.
The carefully-planned event could have all the drama of a race for Olympic gold, but the impact could be far longer-reaching for the Japanese automaker.
The challenge for Toyota will be to strike a balance between acknowledging it made mistakes, say industry analysts, while also showing that it is taking the necessary steps to fix defective vehicles and prevent future problems. Part of the challenge for the maker will be proving a negative that its cars, trucks and crossovers do not suffer from as yet-unidentified electronic glitches that can lead them to race out of control.
“In recent months, we have not lived up to the high standards our customers and the public have come to expect from Toyota,” said Lentz, president and chief operating officer of Toyota Motor Sales U.S.A. Inc. in prepared testimony. “Put simply, it has taken us too long to come to grips with a rare but serious set of safety issues, despite all of our good faith efforts.”
So far, Toyota has recalled more than 8 million vehicles worldwide for a pair of problems that can result in so-called “unintended acceleration.” It has also announced recalls of the Tundra pickup for excessive rust, and of the Prius for defective brakes – a problem first identified by TheDetroitBureau.com last December. And there are numerous additional investigations underway, several targeting the popular Corolla model. Among other things, it’s alleged that the Corolla can develop unexpected steering issues.
There will be plenty of testimony pointing to problems with Toyota vehicles from owners like Rhonda Smith, of Sevierville, Tennessee. She says that leading up to a crash, her Lexus vehicle suddenly raced out of control, reaching speeds of up to 100 mph, despite her efforts to stop it, including hitting the emergency brake, shifting into neutral and trying to put the transmission into reverse.
Up to now, Toyota has pointed to two mechanical problems it says could lead to unintended acceleration: loose floor mats that could “entrap” a gas pedal, and sticky accelerators. The latter issue led the maker to temporarily shut down five North American assembly plants, last month, and halt sales of eight popular models. Currently, said Bob Carter, general manager of the Toyota division, dealers are repairing about 50,000 vehicles a day, using a small shim designed to prevent accelerators from sticking.
In an oddly awkward media presentation, on Monday, several Toyota executives tried to prove that there cannot be any unexplained electronic glitches, that involved going through the development, testing and production procedures Toyota uses.
“In every study to date have found no evidence electronic problems are the cause of unintended acceleration complaints,” asserted Paul Williamson, of the University of Toyota. But pressed to state unequivocally that electronic systems have not and cannot fail, spokesman John Hanson admitted, “We don’t rule anything out.”
The debate is certain to continue on Capitol Hill, both today and tomorrow, when the subject of Toyota safety is turned over to the House Oversight and Government Reform Committee. That second session could prove even more contentious, as lawmakers will get a chance to take shots at Akio Toyoda, the automaker’s 53-year-old president and CEO and grandson of Toyota’s founder.
In a move that echoed the awkwardness of Toyota’s overall response to its current crisis, Toyoda initially declined to attend the hearings, and then reversed himself under intense media scrutiny.
What’s said on Capitol Hill is always a critical matter, especially under the glare of television spotlights. But things could prove even more challenging for Toyota officials, now that the maker has been subpoenaed by U.S. District Court looking for documents related to various safety issues, including both unintended acceleration and Prius braking.
The Securities and Exchange Commission is also looking into possible disclosure violations and even potential securities fraud. (Click Here for details.)
In recent days, there have been signs that Toyota is beginning to escalate its own message, going beyond the mea culpas it has been issuing in TV spots and newspaper ads. It has taken to task an ABC
Yoshimi Inaba, Toyota’s top U.S. official, poked a finger at the Obama Administration, questioning its standing on the auto industry. In Japan, many news outlets have suggested that anti-Japanese sentiments fuel the Toyota controversy, a position that company officials have certainly not discouraged and may have actively encouraged by the generally pro-business Japanese press.
But Toyota isn’t the only potential victim of this week’s hearings. As TheDetroitBureau.com noted in an editorial, serious questions need be asked about the role of government regulators, notably in the National Highway Traffic Safety Administration. (Click Here for the editorial.)
Over the weekend, a leaked document showed Toyota officials celebrating a “win” after having severely limited the scope of a previous recall for unintended acceleration. But the flip side is that NHTSA permitted that action to be scaled back. It also agreed to Toyota’s plan to issue a limited Service Bulletin for extensive problems with Prius headlights, rather than a broader and far more costly recall.
The hearings, say observers, could raise serious questions about a potentially cozy relationship between industry and government, even though Transportation Secretary Ray LaHood insisted that, “NHTSA officials have pushed Toyota to take corrective action.”
But there’s little doubt Toyota has the most to lose on Capitol Hill. And that’s leading the maker to carefully position itself. In an Op/Ed in the Wall Street Journal, Toyoda wrote, “It is clear to me that in recent years we didn’t listen as carefully as we should – or respond as quickly as we must – to our customers’ concerns.”
If the public comes away not convinced that Toyota will do a better job going forward the damage could be immeasurable.