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Wednesday, February 24, 2010

Akio Toyoda- Prez Toyota - to face probe in US on safety concerns in the products

The president of Toyota will face tough questioning from US politicians later as their probe into safety problems at the firm continues.

Akio Toyoda is to be quizzed on events that led to 8.5 million vehicles being recalled worldwide and how his firm responded to the public's concerns.

Mr Toyoda has already released opening remarks which admitted that the firm's expansion "may have been too quick".

The Congress committee has already been scathing of Toyota's US boss.


TOYOTA RECALLS:
Oct 2009 - 3.8 million vehicles are recalled in the US following floor mat problems. More recalls follow in the next few months, over various safety concerns, totalling 8.5 million worldwide by Feb 2010
5 Feb - Toyota president Akio Toyoda apologises for the recalls and pledges to target quality control. However, he is criticised for not bowing deeply enough
9 Feb - Mr Toyoda publicly apologises again and this time is seen to get the bow right
18 Feb - Mr Toyoda announces that he will face questioning in Congress, having previously said that he would not, after being formally asked to do so
23 Feb - Congressional hearings begin, with Toyota's head of US operations, James Lentz, among the first to be grilled.


Sales impact

The reputation of Toyota has been severely damaged by a string of major problems across a range of vehicles.

The main issues have been faulty accelerator pedals, accelerator pedals getting stuck in floor mats, and a problem with braking systems on its hybrid models.

Manny Lopez, auto editor at the Detroit News, told the BBC the recalls were having a big impact on Toyota's business.

"They're struggling mightily," he said. "There was a study out here in the US a couple of days ago that said that Toyota has lost about 5% of market share.

"That's just since the first recall at the beginning of January, and they stand to lose more than that before the month is over and over the next couple of months."

'Groping for story'

The BBC's Adam Brookes in Washington said that the House Energy and Commerce Committee had "not yet accepted that Toyota understands why these cars surged out of control".

"The committee is groping for the rest of the story," he added.

Mr Toyoda will be the most high profile figure to appear before the politicians.

He had initially said that he wished to stay in Japan and planned to send Yoshi Inaba, chief of Toyota's North America operations, to face Congress.

But last week he signalled a change of heart and said he would testify, after the chairman of the House Oversight and Government Reform Committee formally called for him to do so.

He was criticised by the Japanese media earlier this month for not bowing deeply enough at a news conference arranged for him to say sorry for the recalls, leading to questions about the sincerity of his apology.

'Deeply sorry'

The grandson of the company's founder said in his pre-prepared remarks that he took a personal responsibility for improving the quality of Toyota cars.

   
We now understand that we must think differently when investigating complaints and communicate faster, better and more effectively
James Lentz, Toyota Motor USA

"All the Toyota vehicles bear my name. For me, when the cars are damaged, it is as though I am as well. I, more than anyone, wish for Toyota's cars to be safe, and for our customers to feel safe when they use our vehicles."

And he added: "We pursued growth over the speed at which we were able to develop our people and our organisation and we should be sincerely mindful of that."

Mr Toyoda also said he was "deeply sorry" for accidents that had occurred and made a personal apology to the family of Mark Saylor, a California highway patrol officer killed along with his wife, daughter and brother-in-law in a crash that led to renewed US government scrutiny of problems with acceleration in some models.

Congress has already heard from Toyota Motor USA chief James Lentz, who they quizzed for more than two hours on Tuesday.

Under questioning, he agreed that about 70% of complaints about unintended acceleration remained unexplained.

"That is probably fair to say," he said. "There are many factors that lead to it."

"We now understand that we must think differently when investigating complaints and communicate faster, better and more effectively with our customers and our regulators," he added.

Ignored

The committee also heard from Rhonda Smith - who fought back tears as she told of a "near death" experience in October 2006 after the Toyota Lexus she was driving would not slow down.


Mrs Smith said the company "chose to blatantly ignore" her concerns and told politicians that both Toyota and the National Highway Traffic Safety Administration had dismissed her belief that the vehicle's electronics were to blame.

On Monday, Toyota said it had received subpoenas asking it to produce documents relating to the safety problems and the company's disclosure policies.

The subpoenas were served earlier this month by a federal grand jury in New York and by the US financial watchdog, the Securities and Exchange Commission.

Toyota can expect support from one quarter. More than a hundred dealers from around the US have travelled to Washington.

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