Economy Watch

So far, we've seen Toyota and Ford recall some of their hybrids because drivers have been experiencing squishy-feeling brakes.

So I wondered about the hybrids made by General Motors, which include the Cadillac Escalade SUV, the Chevy Silverado pickup, the GMC Yukon and GMC Yukon Denali SUVS, the Chevy Tahoe SUV and the GMC Sierra pickup.

GM said: No problem so far. The company's hybrid brake design -- a regenerative-braking system, like that used by Ford and Toyota hybrids -- was designed by GM and built by partsmaker TRW, a GM spokesman said. Toyota and Ford used a different supplier.

To double-check, I took a look at the National Highway Traffic Safety Administration consumer complaint site, which you can see by clicking here.

I found two complaints about faulty brakes on GM hybrids in 2009 and 2010 model years. That compares with more than 200 complaints filed in the U.S. and Japan about braking problems with the Toyota Prius.

The owner of a 2009 Chevy Tahoe hybrid wrote: "I was backing out of the garage with my family when I realized the brakes weren't working to slow us out of the driveway. I drove through the subdivision at 15 m.p.h. and I couldn't get it to stop!"

I found another complaint about faulty brakes on a 2009 Yukon Denali hybrid, with the driver having to use the emergency brake to stop the truck.

In 2009, GM recalled Escalade, Yukon and Denali models for what it called a faulty fuel sensor control module that could cause stalling. But that's not a brake issue.

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It may seem like every Toyota ever made is under some form of recall or investigation, but that's not quite the case. Here is what you need to know if you are a Toyota or Lexus owner.

-- The first thing: If you have any doubt about your Toyota or Lexus vehicle, contact your dealer.

-- Also, and this should go without saying: If you receive a recall notice, take your car to your dealer as soon as possible.

-- In September of last year, Toyota recalled the following vehicles for potential floor mat entrapment of the gas pedal (Total of 3.8 million vehicles.):

The Transportation Department now says that it is looking into more than 80 complaints it has received from owners of the 2009-2010 Toyota Corolla about the vehicle's steering.

The latest image hit to the Japanese auto giant comes on the same day that the company said it will recall some 400,000 hybrids -- including its high-profile Prius -- to fix driving complaints about squishy-feeling brakes.

According to the complaints filed at the National Highway Traffic Safety Administration, the Corollas can veer left or right at highway speeds.

"I purchased [a] 2010 Toyota Corolla in November of 2009, and since then I am having [a] problem with the steering wheel," one driver wrote to NHTSA. "I can not keep the vehicle driving straight on the freeway. I think it is very dangerous."

Let me emphasize here: The Transportation Department has not launched a formal investigation into the Corolla steering, as it did last week with the Prius brakes. Instead, said Transportation spokeswoman Olivia Alair, the agency is reviewing the Corolla complaints "as we do with all complaints."

Also, understand this: Toyota is a massive automaker, at one point rivaling GM for U.S. sales. It is bound to get owner complaints simply because of the sheer number of vehicles it sells. Even though this news comes the same day as the Prius recall and on the heels of the stuck-gas-pedal recall, it may not necessarily mean that the automaker is suffering a general breakdown in quality. That will be a matter for the Transportation Department and its Japanese counterpart to decide.

Click here to see an explanation of how the Transportation Department goes about a review.

An excerpt:

"Q: How many reports must be filed before NHTSA investigates an issue?

A: There is no established number. Agency technical experts review each and every call, letter, and online report of an alleged safety problem filed with NHTSA. Although NHTSA has no jurisdiction over defects that are not safety-related, it does review each report that suggests a potential safety defect involving groups of motor vehicles or vehicle equipment."

Nevertheless, this is the last thing Toyota needs as it tries to repair its once-impregnable image for quality and reliability.

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Toyota issued a global recall of its 2010 Prius this morning during a marathon, emotional news conference featuring company President Akio Toyoda, the company founder's grandson.

The recall ropes in 223,000 hybrids sold in Japan, along with 133,000 Priuses and 14,500 Lexus HS250h vehicles in the United States. The problem with the hybrids is communication between their electronic and hydraulic braking systems. Sometimes when one switches over to the other, the brakes can feel squishy. However, Toyota is also recalling some 2010 Camrys with an altogether different braking problem: leaking fluid.

Moments ago, the U.S. Department of Transportation weighed in on the recall.

"Last Thursday, the National Highway Transportation Safety Administration opened a formal investigation of 2010 Toyota Prius hybrid vehicles in response to consumer complaints about braking difficulties, and today, Toyota has acknowledged a safety defect," Transportation Secretary Ray LaHood said in a statement. "When I spoke with Toyota President Akio Toyoda last week, he assured me that his company takes U.S. safety concerns very seriously. The U.S. DOT will remain in constant communication with Toyota to hold them to that promise. In the meantime, if you are concerned about your car's braking performance, contact your Toyota dealer."

NHTSA recommends that Prius owners contact a Toyota dealer immediately if they notice a change in vehicle braking.

This is a much more somber statement than the one LaHood made during Hill testimony last week, when he told owners of Toyota vehicles under recall to stop driving them immediately and take them to a dealer. Even though he tried to back off what he called a "misstatement" later in the day, his warning crashed Toyota stock 7 percent that day.

Wednesday's planned hearing of the House Oversight and Government Reform featuring Toyota executives has been postponed and is now penciled in for Feb. 23, the committee said today.

UPDATED: The committee just said it has settled on Feb. 24, at 10 a.m. for its hearing with Toyota execs, titled: "Toyota Gas Pedals: Is the Public At Risk?"

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Wall Street rebounded at opening today on speculation that debt-troubled Greece will get some help from its neighbors and some strong reports from U.S. economic stalwarts McDonald's and Coke.

In the first 20 minutes of trading, the Dow is up 1.2 percent.

The broader S&P 500 is up 1.1 percent and the tech-heavy Nasdaq is up 1 percent.

In other news this morning, Toyota finally pulled the trigger on its global Prius recall, saying it wold call back some 400,000 of the high-profile hybrids to fix driver concerns about squishy-feeling brakes.

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UPDATED at 12:05 a.m.

Struggling Japanese auto giant Toyota is recalling the 2010 Priuses in Japan because of braking problems, following a government-ordered investigation of the brakes.

No word yet on a recall for Priuses sold in the United States, where owners have filed more than than 100 complaints that the high-profile hybrid's brakes can feel squishy when braking is applied on bumpy roads, the company said moments ago.

Toyotal also is recalling the Lexus HS 250h sedan, the upscale version of the Prius, and the Sai, which is sold only in Japan.

Toyota president Akio Toyoda will hold a press conference Tuesday afternoon at the company’s Tokyo headquarters to discuss the Prius, a spokesman said, The Post's Blaine Harden reported from Japan moments ago.

The Japanese press has been reporting for days that Toyota has decided on a worldwide recall of the latest models of the Prius, which have sold briskly in Japan and the United States since they were rolled out last year. About 170,000 vehicles would be subject to the recall in Japan and about 103,000 in the United States, according to press reports.

The recall represents the latest image blow to Toyota, which had won a two-decade reputation for quality and reliability. In January, Toyota recalled 2.1 million vehicles, including the Prius, for sticking accelerator pedals. This added to a 3.8-million vehicle recall in September for what Toyota has said is an unrelated problem involving the accelerator pedal becoming trapped by the floor mat.

The U.S. Department of Transportation launched a formal investigation on the Prius brakes last week.

Click here to read an op-ed from Akio Toyoda in Tuesday's Washington Post. He writes:

"We also are putting in place steps to do a better job within Toyota of sharing important quality and safety information across our global operations. This shortcoming contributed to the current situation. With respect to sticking accelerator pedals, we failed to connect the dots between problems in Europe and problems in the United States because the European situation related primarily to right-hand-drive vehicles."

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I hate to kick a guy when he's down, but sometimes people just bring it on themselves: Today, Dodge released pictures of the new color scheme for its top-end muscle car, the Challenger. The color is called "furious fuchsia."

Click here to see it, then come right back.

I'm going to pause here for a moment to let that sink in.

Okay, moving on.

Dodge, as you know, is a division of Chrysler, which went through bankruptcy last year and is still trying to find itself, unlike General Motors, which also went through bankruptcy (and is 61 percent owned by the U.S. taxpayer) last year. For years, Chrysler was the weakest of the Big Three, and now, that's only more true.

As the only U.S. automaker not to take taxpayer help, Ford is gulping up rivals' market share. GM, while no exemplar of how to shave off burdensome brands, is refocusing on its core vehicles.

Chrysler? It's kind of all over the place.

Chrysler was able to make it through bankruptcy with the aid of Fiat, which now owns 20 percent of the company and appears to be in charge of the venerated Detroit automaker. A Chrysler-badged Lancia (owned by Fiat) appeared at the Detroit auto show last month. Chrysler and Fiat's Lancia are about to roll out a joint-production plant in Geneva. Dodge has spun off its popular Ram truck into a separate brand.

Maybe there's a strategy in all this, but it seems hard to believe it involves making pink muscle cars.

The car itself is not the problem: I am on record as saying that, if I had an extra $42,000 sitting around, there would be a brand-new, 425-horsepower Dodge Challenger sitting unapologetically in my garage yesterday. This car has a proud history, and the updated version is no joke.

But it would be in red or orange. Not furious fuchsia.

Furious fuchsia is not a name for a muscle car color. It is a name for a nail polish color. Or a riot grrrl band. Or even a particularly flamboyant disco. But not a muscle car.

Did we mention 85 percent of Dodge Challenger buyers are male?

Pity the poor Dodge spokesman who was forced to say the following line to CNN: "I saw it in person, and it actually looks pretty cool. It's tough to capture how it looks in the daylight."

Problem:

Number of people who will see furious fuchsia Dodge Challenger in person: approximately 50,000.

Number of people who will see furious fuchsia Dodge Challenger on TV, the Internet, in magazine ads and so forth: approximately 50 million.

Sergio Marchionne is the smart, smooth head of Fiat and is probably Chrysler's best chance to become relevant again. It's hard to believe he checked off on "furious fuchsia."

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Politico's Mike Allen is reporting that embattled Japanese auto giant Toyota has hired Democratic D.C. lobbyists/PR firm the Glover Park Group to plead its case in Washington.

The Glover Park Group includes former Democratic heavyweights Joe Lockhart (former Clinton spokesman) and former Gore chief of staff Michael Feldman.

Citing Senate records, Politico reports that Toyota spent $4.1 million lobbying Congress last year, twice as much as any Japanese automaker. Which was still half as much as GM spent lobbying Congress last year.

Read the entire report by clicking here.

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Today brings another unsourced report from another Japanese media outlet that Toyota is preparing a recall of its high-profile hybrid, the 2010 Prius, to take care of complaints from drivers that the vehicle's brakes are squishy.

Today's report comes from Japan's Kyodo news agency. It reports, though does not identify its source, that the Japanese auto giant will recall 270,000 Priuses on Tuesday. The company has not confirmed the report.

Last week's report came from Japanese news outlet Nikkei, and its number was 160,000 Priuses. The company last week denied that report.

Over the weekend, however, Toyota said it is working on a plan to fix the Prius brakes and would announce something this week.

The problem in a nutshell: The Prius, like other hybrids, uses an innovative braking system known as "regenerative braking" that has an electronic and more conventional hydraulic braking system. When the Prius switches from one system to another, sometimes over bumpy roads, there is a momentary feeling of squishiness in the brakes. Toyota says the brakes are fine and if you keep applying them, the vehicle will brake. Of course, that's not what a number of the more than 100 complaints by 2010 Prius owners to NHTSA have said, so Toyota has a problem on its hands.

So here's what's probably going on: Automakers understandably hate to issue recalls. Recalls are the last-ditch resort because (a) they are so expensive, (b) they kill your public image, (c) they may not have diagnosed the problem accurately and the recall won't work, and (d) a lot of people will not bring their recalled vehicles in to be fixed because they are busy or they don't think the problem is that bad.

Toyota has likely been trying to figure out if this brake squishiness is a real mechanical problem that is the result of a design flaw or if it's a perception problem that can be fixed with a software change that will make the brakes feel firmer.

Then, the automaker has been trying to figure out whether it's a systemic problem on all the company's assembly lines -- maybe, because it's been installing a software fix on recently produced Prius brakes (an issue, by the way, that Ford hybrids have, as well) -- or whether it's isolated to a few assembly plants.

Then, Toyota is trying to figure out if this is a safety issue or a perception issue. Make no mistake -- automakers run a cost calculus on recalls, weighing the potential hazard of a situation (and that includes the potential for class-action lawsuits, which Toyota is already facing) against the cost of the recall.

Here's a good academic study on the production cost vs. liability cost of the Ford Pinto's exploding gas tank.

For Johnson & Johnson, which faced eight deaths in Chicago in the early '80s because a never-apprehended villain poisoned the company's Tylenol with cyanide, the choice was simple: Our product is killing people. We need to take all Tylenol off the shelves everywhere, immediately.

Toyota's choice is not so simple. No deaths have been attributed to the squishy Prius brakes and only four crashes are alleged to have happened because of them. But the P.R. hit Toyota is taking is massive.

If the automaker chooses to execute a recall, it wants to run the cheapest recall possible that will fix the problem, i.e, a software fix versus ripping out the entire brake assembly.

Toyota has a lot of parts in motion right now, as it tries to figure out what to do about its 2010 Prius, which has been the automaker's halo vehicle -- the car that is meant to embody all that is best about Toyota. That's why you're seeing this drip-drip-drip unsourced reports on the future of the Prius. It's not an easy choice Toyota faces.

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UPDATED at 11:10 a.m.

Stocks have erased their early losses and eased into positive territory.

Nearly two hours into the trading day, the Dow is just above water.

The broader S&P 500 and the tech-heavy Nasdaq are both up three-tenths of 1 percent.

Global debt concerns push stocks down at opening

9:57 a.m.: Stocks are down at opening as investors and traders remain concerned about debt problems in Europe.

In the first 20 minutes of trading, the Dow is down six-tenths of 1 percent.

The broader S&P 500 is down half of 1 percent and the tech-heavy Nasdaq is down four-tenths of 1 percent.

The recovery is at a real tipping point right now, and I'll talk about that later.

There are no big market-moving data planned for release today.

Toyota said yesterday that it's going to announce plans "soon" to deal with customer complaints about the braking system on the company's high-profile hybrid, the Prius.

The company had to deny yet another report that it is about to recall the Prius.

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