Internal Toyota memo surfaces on savings, safety

1:22 PM, Feb 22, 2010   |    comments
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An internal Toyota document dated last July says the company saved $100 million in 2007 by getting the government to OK just replacing floor mats in 55,000 vehicles as a solution to sudden acceleration complaints.

It's listed under "wins for Toyota - safety group" in the report, which is among documents obtained by a subpoena from the House Committee on Oversight and Government Reform.

That and other references to saving money on safety issues raise the question of "whether Toyota was lobbying for less rigid actions from regulators to protect their bottom line," said Kurt Bardella, spokesman for the committee's ranking Republican, Darrell Issa of California.

The panel is to hold a hearing Wednesday on Toyota's recalls and whether the National Highway Traffic Safety Administration (NHTSA) acted promptly on Toyota safety complaints. Toyota global head Akio Toyoda is to appear.

The Toyota report also cautioned that "NHTSA is more sensitive to public/congressional criticism" and that, combined with changes in regulations, will result in "more investigations and more forced recalls."

Toyota finally, this year, recalled 5.4 million vehicles not only to replace the mats but also to change poorly designed gas pedals because of sudden acceleration complaints. It also recalled more than 2 million vehicles for sticky gas pedals.

Another key document surfaced as a result of subpoenas to U.S. auto insurers. State Farm, the biggest, says that in a review of files for the subpoena, it found a letter to NHTSA dated Feb. 27, 2004, citing five cases of Toyota or Lexus sudden acceleration in the previous 12 months.

That's three years earlier than the insurer previously had said, and some five years before Toyota detailed sudden acceleration problems for the government.

A NHTSA note dated March 1, 2004, told State Farm its report "was very timely" as it was "looking into similar reports." NHTSA started in December 2003. The disclosures add to Toyota's stiffest challenge since it set up shop in the U.S. in 1957.

Also looming: A hearing Tuesday by the House Committee on Energy and Commerce. Both panels will "be out for blood. They are going to grandstand because it's an election year," says Paul Argenti, crisis-communication professor at Dartmouth. 

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