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Toyota official: Our deal with U.S. regulators avoided massive recall, saved us $100 million

UPDATED Monday at 12:30 p.m. with Toyota statement:

A top Toyota official claimed that a negotiated agreement with U.S. government auto-safety regulators prevented a widespread vehicle recall and saved the Japanese auto giant more than $100 million, according to a document obtained by The Washington Post after it was turned over to congressional investigators.

The document is a July 2009 presentation, listing Toyota North America president Yoshi Inaba on its cover, that was given to the automaker's Washington office.

Under the heading "Wins for Toyota & Industry," Inaba wrote: "Negotiated 'equipment' recall on Camry/ES re. SA, saved $100M+, w/ no defect found." "SA" stands for "sudden acceleration."

In 2007, the National Highway Traffic Safety Administration, responding to complaints filed by Toyota and Lexus owners about sudden acceleration, started an investigation to determine if Toyota floor mats were catching the vehicles' gas pedals and causing unintended sudden acceleration.

Toyota responded to the probe by telling NHTSA that there was no way the floor mat could cause the acceleration, if it was put in place correctly by the driver.

As a result, later in 2007, Toyota recalled only 55,000 Camrys and Lexus ES350s, costing the company significantly less than a widespread recall.

But the problem didn't go away, and Toyota ended up recalling 2.1 million vehicles last fall for what it calls "floor mat entrapment" of the gas pedal, and an additional 3.8 million vehicles last month, for what it says is an unrelated problem with sticking gas pedals.

The document was first obtained by the Detroit News on Sunday and later by The Washington Post.

Seeking to clear up Inaba's role in the presentation, Toyota sent this e-mail this morning:

"The presentation was delivered to Mr. Inaba, not by him. It provided an outline of the constantly changing government, industry and regulatory environments in which Toyota and other automotive companies operate.

Our first priority is the safety of our customers and to conclude otherwise on the basis of one internal presentation is wrong. Our values have always been to put the customer first and ensure the highest levels of safety and quality. Our recently announced top-to-bottom quality review of company operations, along with new quality process initiatives and a renewed commitment to transparency are all designed to reaffirm these long-held values."

The document was turned over to the House Oversight and Government Reform committee, which will grill Toyota president Akio Toyoda, Inaba and Transportation Secretary Ray LaHood during a Wednesday hearing.

"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?," said Kurt Bardella, spokesman for Rep. Darrell Issa (R-Calif.), the committee's ranking minority member. "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. If anything but the safety of America's drivers influenced the decision-making process, the entire purpose of NHTSA will be undermined."

The committee also has subpoenaed documents from Dimitrios Biller, a former top attorney for Toyota North America, which he claims the company squelched and which would have allowed liability lawsuits to go forward against Toyota.

As Toyota heads to the Hill on Wednesday, Toyota lobbyists are attempting to prepare the way for them, my colleagues at The Post report in this story.

Follow me on Twitter at @theticker

By Frank Ahrens  |  February 22, 2010; 12:30 PM ET
Categories:  Congress , Corporations , The Ticker  | Tags: Akio Toyoda, Toyota problems, Toyota recall update, toyota, toyota recall model and years, unintended acceleration  
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Comments


Oh so, Issa and the deregulatory Right get to pretend they're all for cumbersome red tape. Toyota's recalls were caused by their Grover Norquist starve-the-beast ideology.

What a pack of liars!

Posted by: lichtme | February 22, 2010 7:36 AM | Report abuse


Rep. Darrell Issa (R-Calif.)—

a real champion of corporate regulation.

(yeah right)

Posted by: lichtme | February 22, 2010 8:02 AM | Report abuse

It seems NHTSA regulatory authority was derived - for all practical purposes - from Toyota Motor Corporation rather than the U.S. Department of Transportation. Then the question becomes: Did Congress intend it to be this way? And if so, why? It's hard upon reading this story to believe members of Congress didn't willingly participate with Toyota in gaming the regulatory agency - not that I'm surprised. This could get very messy politically. I mean more messy than it already is. LOL

Posted by: tuzoner | February 22, 2010 8:14 AM | Report abuse

It will be interesting to see in the upcoming hearings if the Congress calls any of the ex government officials who are now on Totyota's lobbying payroll and who orchestrated the negotiated settlement of a more immediate recall?

Instead of having an Asian face across the witness table to bash for putting Americans at risk our Congress should be fair and balanced and expose some of our own people who, in spite of the evidence and risk to safety, decided their objectives of personal gain and profit were more imporant than public safety.

Posted by: bobfbell | February 22, 2010 8:16 AM | Report abuse

Saving face thru any means in the best shinto tradition,,the usual contempt for american lives shown so much in the last century.

Posted by: gonville1 | February 22, 2010 8:48 AM | Report abuse

The investigation started in 2007 which the regulators was told by the Toyota that the problem was caused by the drivers placing mats incorrectly. It then started to casade into something else.
We then get Issa's spokeman saying: "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?,"
"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. If anything but the safety of America's drivers influenced the decision-making process, the entire purpose of NHTSA will be undermined."

I smell a rat when I hear from the anti regulation right(Issa and his party) and Democrats on the subject if the regulator were lobbied by the company in order to protect their bottom line. Now you'll see Toyota and their lobbyists bracing for the show and tell "fake anger" by the committee members.
I'll see what transpired before I make further judgment.

Posted by: beeker25 | February 22, 2010 9:37 AM | Report abuse

Issa and the deregulatory Right get to pretend they're all for cumbersome red tape. Toyota's recalls were caused by their Grover Norquist starve-the-beast ideology....

Concur.
And, in 07 the G(nO)P was in power...

Posted by: mloaks | February 22, 2010 9:47 AM | Report abuse

So, here we have the cart getting ahead of the horse. And, shall we say, pulling the horse over the cliff.

This $100M "savings" will all vanish like melting snow when the first liability lawsuits hit the jury rooms.

And rightly so, since Toyota most likely still hasn't identified the underlying cause of, um, "SA" but is claiming that it has -- in order to get its cars back on the showroom floors.

Posted by: laboo | February 22, 2010 10:02 AM | Report abuse

I 'm still waiting for a couple of Toyota leaders to commit Hara Kiri and then maybe we'll get back to buying toyotas. And through in a few NHTSA officials too who brokered this deal.

Posted by: bog1 | February 22, 2010 10:13 AM | Report abuse

Toyota would rather save money than lives? Perhaps we should call them Pinto instead.

Posted by: kravitzkravitz | February 22, 2010 10:25 AM | Report abuse

Now non union company Toyota is repairing for American non union workers mistakes and getting billions from japan ,can't blame USA unions for this .cheaper non union workers and cheap engineers caused the problems.Quality gone ,just go cheap and sell more as quick as we can ,Dumb American buyers will still support Toyota and Lexus,just watch,no shame for lies.

Posted by: dcg326 | February 22, 2010 10:26 AM | Report abuse

Now non union company Toyota is repairing for American non union workers mistakes and getting billions from japan ,can't blame USA unions for this .cheaper non union workers and cheap engineers caused the problems.Quality gone ,just go cheap and sell more as quick as we can ,Dumb American buyers will still support Toyota and Lexus,just watch,no shame for lies.Pay off possible.

Posted by: dcg326 | February 22, 2010 10:27 AM | Report abuse

The legacy of the Bush administration lives on and on at the cost of middle and lower-income Americans.

The unadulterated co-option by the money and influence of corporate interests, shows up again as the "regulators" were instructed to aid business interests in exchange for potential lives of citizens.

Of course Toyota is to blame, but who let it slip dangerous vehicles into the car lots?


Posted by: capitalx | February 22, 2010 10:32 AM | Report abuse

BUY Toyota!!! ha-ha-ha, you get what you pay for buy junk get junk, Congress needs to get on someones case real bad here.....

Posted by: theidahokid | February 22, 2010 10:49 AM | Report abuse

Issa and the deregulatory Right get to pretend they're all for cumbersome red tape. Toyota's recalls were caused by their Grover Norquist starve-the-beast ideology....

Concur.
And, in 07 the G(nO)P was in power...

________________

Nope, sorry....Democrats controlled Congress - both HOuses - in 2007.

Posted by: boosterprez | February 22, 2010 11:04 AM | Report abuse

Delightful to see Toyota, its dealerships, and the best government money can buy startin' to squirm. When it comes to consumers, NHTSA stands for No Help To Solve Anything.

http://www.uc2.blogspot.com

Posted by: ParrisBoyd | February 22, 2010 11:25 AM | Report abuse

What a concept. You find yourself in trouble, you're super rich, so you go buy some congressmen. Bet that never happened before.............

Posted by: GordonShumway | February 22, 2010 11:25 AM | Report abuse

What's with these Japanese guys acting like American corporations?

Posted by: AlanGoldberg54 | February 22, 2010 11:35 AM | Report abuse

This is the company that so many politicians last year stood up and said our American automobile makers should emulate. I hoped that putting corporate profits completely ahead of consumers' safety and lives was a thing of the past; but I was naive on that.

David McGee
Lynchburg, VA

Posted by: dhmcgee | February 22, 2010 12:17 PM | Report abuse

Issa and the deregulatory Right get to pretend they're all for cumbersome red tape. Toyota's recalls were caused by their Grover Norquist starve-the-beast ideology....

Concur.
And, in 07 the G(nO)P was in power...

________________

Nope, sorry....Democrats controlled Congress - both HOuses - in 2007.

________________

NHTSA is part of the executive branch (Bush at the time). Government 101, my friend.

Posted by: cmr2328 | February 22, 2010 12:20 PM | Report abuse

You mean that by not covering up their liabilities, Toyota actually saved 100 million bucks ? Imagine that.

Posted by: truthhurts | February 22, 2010 12:36 PM | Report abuse

So, the NHTSA, like other federal oversight agencies under Bush, gave in to his administration's motto regarding BIG BUSINESS:

"FIRST, CAUSE NO LOSS OF PROFITS"

Posted by: kinkysr | February 22, 2010 12:42 PM | Report abuse

NHTSA was gutted by Reagan back in the 80's under the guise of "Government is the problem". We were susposed to get airbags which ended up being delayed until the mid-90's. Tire pressure monitors were going to be mandatory as well. Today you can only find them on higher end vehicles. Bumper standards were weakened as well from 5 MPH to 2.5 MPH. Think of the injuries and lives cost as well as insurance premiums saved. Grover Norquist, Issa and the starve-the-beasters should roast in a flaming Pinto.

Posted by: MerrillFrank | February 22, 2010 12:44 PM | Report abuse

While they're at it, can they drag GM up there as well? While Toyota may have an occasional stopping problem (ahem), at least when you turn the key they start for 200,000 miles. It'll be interesting to see what kind of garbage GM has in mind for us post bailout.

Posted by: tslats | February 22, 2010 12:46 PM | Report abuse

Why would we need any watchdog agencies in this country? It is each man/ woman for themself and the heck with it. "Let the buyer beware" has been our motto since the 1980s and it has worked sooo well. We have "starved the beast" to the point that people believe it un-American to pay taxes for things like governmemnt saftey experts. For all the people who own Toyotas, I am sorry, that is most likely the best you are going to get out of this.

Posted by: Thinking4 | February 22, 2010 1:09 PM | Report abuse

This kind of thing will no longer be a problem when Toyota Corporation starts exercising its basic right to free speech, and purchases enough of our government to make sure that the only safety regulation is caveat emptor.

Posted by: daweeni | February 22, 2010 1:09 PM | Report abuse

Where are the JAIL TERMS?

Why did these execs not go to jail and have their houses seized for KILLING AMERICANS?

Seriously, they killed more people than al-Qaeda has killed in America in the last 8 years and they're NOT going to JAIL?

Posted by: WillSeattle | February 22, 2010 1:26 PM | Report abuse

"This kind of thing will no longer be a problem when Toyota Corporation starts exercising its basic right to free speech, and purchases enough of our government to make sure that the only safety regulation is caveat emptor."

So true... now I can only hope that at least a few of those killed in related accidents were avid fox viewers and republicans. It has gotten to the point where the blindness of the average idiotic Amerindian GOP voter to stuff like this is so inexcusable... the world would be better off if they all died in a mass simultaneous combustion.

Posted by: ukangitmynutz | February 22, 2010 1:39 PM | Report abuse

If a future jury has any sense of irony, it might find Toyota $100M per death/serious injury for their irresponsibility.

Posted by: shhhhh | February 22, 2010 1:51 PM | Report abuse

According to an article published on 2/8/10 in the Wall Street Journal:

http://online.wsj.com/article/SB10001424052748704820904575055733096312238.html?mod=WSJ_hps_LEADNewsCollection

"By August 2007, NHTSA wanted Toyota to issue a Lexus and Camry recall to remove the floor mats Toyota blamed for the acceleration problems. 'Toyota assured us that this would solve the problem,' said Nicole Nason, then NHTSA's administrator.

In their probe, NHTSA investigators asked Toyota, 'Are you sure it's not the gas pedal?' Ms. Nason said. 'They assured us it's just the floor mat.' "


Joan Claybrook really had it right about NHTSA's "collaborative approach for undermining its role." But, more should be said about Bush appointee, Nicole Nason, the NHTSA head (2006-2008), who, prior to her NHTSA leadership role, had lobbied for the Bush administration against auto safety proposals

http://www.washingtonpost.com/wp-dyn/content/article/2006/01/18/AR2006011802375.html

and blocked NHTSA staff from speaking on the record.

http://wheels.blogs.nytimes.com/2007/08/22/whats-off-the-record-at-nhtsa-almost-everything/

Posted by: wheresthetruth | February 22, 2010 2:16 PM | Report abuse

"We have "starved the beast" to the point that people believe it un-American to pay taxes for things like government safety experts."
Posted by: Thinking4 | February 22, 2010 1:09 PM
==
Thinking4, you are correct.
You know, Thinking4, "we" Americans really don't like taxes, especially when the money goes for "make-work" gov't. flunkies like the members of the National Highway Transportation Safety Board (NHTSB), etc., don'cha know?
I guess parsimonious taxpayers thinks those experts should work for free, when they investigate accidents -- or maybe they grow on trees?
As our crisis continues, we can get jealous of those who work in any facet of government.
The problem is that, like Dr. Paul Krugman says today, in his excellent essay, "The Bankruptcy Boys" (NYTimes, 22 Feb 2010):
"... the defacto strategy is to oppose any responsible action until we are in the midst of a fiscal catastrophe."
Maybe the next time a Toyota accelerates and causes an accident, we'll have to give the operator our credit card for prepaid charges so that we can call 9-1-1 for help, you reckon?
Oh yes, and force those people who dream up any "frivolous" lawsuits against Toyota and suppliers for shoddy manufacture of the accelerator system to do their own testing.
Talk about the cost of "caveat emptor"!
Looks to me like GWB and the neo-cons achieved more than even beyond Ronald Reagan's wildest dreams.
Once we can't pay for basic services even at the local level, you reckon that the ensuing chaos may bring the currently angry populace to its senses?
I don't know, but when/if that happens (and I believe that day is not so far way), I'M the one who's going to be furious.
To think that in a few short years, these nuts could overturn what I've voted for, for the past 50 years.
Sickening.

Posted by: Judy-in-TX | February 22, 2010 2:32 PM | Report abuse

Toyota buys FAVORITE status from the government and OOOOHHH it's bad, and the government should have stepped in.

Healthcare insurance buys FAVORITE status from government and OOOOOH don't change the system because that would be SOCIALISM.

Stupido Americans

Posted by: kare1 | February 22, 2010 2:32 PM | Report abuse

In reference to the comment about hara kiri - I was discussing this with a buddy at the gym on Saturday. We both agree that if Mr. Toyoda is truly sorry he will atone the Japanese way - by committing hara kiri during his testimony at the Capitol!

Posted by: VAbaseballfan | February 22, 2010 2:36 PM | Report abuse

If you drive your toyota and you have a crash because of the defective car,

Can you healthcare insurance company deny your claim because of your pre-existing DANGEROUS car??

Would you agree with the GOPs and limit your ability to file and collect on a negligence claim? (they want that on healthcare)?

Posted by: kare1 | February 22, 2010 2:37 PM | Report abuse

Toyota would rather save money than lives? Perhaps we should call them Pinto instead.

Posted by: kravitzkravitz | February 22, 2010 10:25 AM | Report abuse

_____________________________

And health insurance companies would rather make money than save lives??

Posted by: kare1 | February 22, 2010 2:40 PM | Report abuse

Toyota saved $ 100 million. 34 Americans died. Industry lawyers want to limit tort rewards.
When do the regulatory agencies start doing their jobs? When will Toyota accept responsibility for actions indifferent to customer safety and survival?

Posted by: janlovell_7 | February 22, 2010 2:43 PM | Report abuse

YOU ASKED FOR IT! YOU GOT IT ... TOYOTA!

Posted by: unseenmirage | February 22, 2010 6:23 PM | Report abuse

Toyota has hidden more than defects! How far would it go to stop grassroots consumer organization of its vehicle owners? Does it manipulate what is said about it online? Does it go further than that? There is oh, so much more to this story than the public knows!

Posted by: autoresearcher | February 22, 2010 9:59 PM | Report abuse

Yeah RIGHT!!!!!!!! Toyota cares less about Americans driving their "Death Traps"! Two weeks ago a dear friend was driving one of the Camry's from hell and nearly lost his life! Everyone is backing off from putting Toyota in the hot seat, but instead of recalls everyone who owns one of these makes of Cars should take it back to the dealership and DEMAND their MONEY BACK! No one should ever be forced to drive something that can kill them and even do harm to someone else!

Posted by: ifordc | February 22, 2010 10:19 PM | Report abuse

Toyota has hidden more than defects! How far would it go to stop grassroots consumer organization of its vehicle owners? Does it manipulate what is said about it online? Does it go further than that? There is oh, so much more to this story than the public knows!

Posted by: autoresearcher | February 22, 2010 10:24 PM | Report abuse

This is sad for all concerned, the victims, the victims family's and all Toyota's customers. The right to work states which house these manufacturers didn't care about out auto industry when the recession became worse during the Fall of 2008 and Winter of 2009. The congressman and Senators from the "right to work states" which manufacture Toyota, and other foreign automobiles, insisted American car companies file bankruptcy and stop asking the government for assistance.
After this latest Toyota fiasco, I say kick them out of our market, until they can prove their ability to manufacture safe cars for our citizens to drive in our country..

Posted by: rnmina1 | February 23, 2010 4:43 AM | Report abuse

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