Toyota Dealerships Strongly Defend Company Brand

Visit msnbc.com for breaking news, world news, and news about the economy

Visit msnbc.com for breaking news, world news, and news about the economy

Sources: MSNBC, Toyota

Did Toyota Care More About Profits Than Customers? Yes!

Visit msnbc.com for breaking news, world news, and news about the economy

Visit msnbc.com for breaking news, world news, and news about the economy

Toyota Apologizes But Asserts Electronics OK



The president of Toyota's operations apologized for the company's handling of safety issues Tuesday while insisting that electronic problems did not contribute to sudden acceleration of its cars. Transportation Secretary Ray LaHood argued that such a possibility could not be ruled out.

Toyota's James Lentz and LaHood presented differing views in prepared testimony before the House Energy and Commerce Committee's investigative panel, the first of three congressional panels holding hearings on Toyota's problems.

The chairman of the House Energy and Commerce investigative subcommittee, Rep. Bart Stupak, D-Mich., set the tone for sharp questioning of Lentz at the hearing's outset.

"Toyota all but ignored pleas from consumers to examine sudden unintended acceleration events," he said. "They boast in a briefing of saving Toyota $100 million by negotiating a limited recall. They claim that they first became aware of sticking pedals in late October of 2009 when in fact they had received numerous complaints many months and years earlier."

"They misled the American public," Stupak added, "by saying that they and other independent sources had thoroughly analyzed the electronics systems and eliminated electronics as a possible cause of sudden unintended acceleration when, in fact, the only such review was a flawed study conducted by a company retained by Toyota's lawyers."

Lentz said in prepared testimony that Toyota had poor communications within the company, with government regulators and with its customers.

But he also said that Toyota has no problems with its electronic throttle controls, which have been blamed as a possible cause of unintended acceleration in some Toyota models.

Also being heard from Tuesday are drivers like Rhonda Smith, a Sevierville, Tenn., woman whose Toyota-made Lexus suddenly zoomed to 100 miles per hour as she tried to get it to stop — shifting to neutral, trying to throw the car into reverse and hitting the emergency brake. Finally, her car slowed down before she crashed.

Smith wrote down her feelings after the 2006 scare, saying she had "a near death experience, which occurred on October 12, 2006 between approximately 10:50 and 11:00 a.m. At almost exactly 6 miles God intervened" and slowed the car. She said that nothing she had tried had worked.

Smith's description of her nightmare ride in October 2006 will precede testimony by safety experts — and set the tone for the hearing. Toyota executives and the secretary of transportation also will be at the witness table. Members of the House Energy and Commerce Committee's investigative panel will be armed with preliminary staff findings that Toyota and the government failed to protect the public.

Toyota, which has recalled 8.5 million vehicles to fix acceleration problems in several models and braking issues in the 2010 hybrid Prius, is bringing apologies to the hearing.

"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."

More than 150 Toyota dealers gathered in the Capitol Tuesday morning before the hearing to lobby lawmakers in support of the carmaker. Many wore buttons saying, "I am Toyota in America."

"We made a choice, a conscious decision, to be part of something, rather than just submit to it," said Tammy Darvish, a Washington area dealer who helped organize the action, which Toyota also helped coordinate.

Dealers Complain

Toyota dealers are complaining that the besieged automaker is being treated unfairly by the U.S. government. Some say it's because the government has invested billions in two competitors, General Motors and Chrysler.

At a news conference in advance of the hearing Tuesday morning, some complained the government is picking on Toyota, even though there have been dozens of recalls of other automakers' vehicles in the past year.

Toyota revealed Monday that federal prosecutors and the Securities and Exchange Commission are now investigating the company's safety problems and what it told government investigators.

Lentz was defiant on one point, asserting that Toyota is confident "no problems exist with the electronic throttle control system in our vehicles. We have designed our electronic throttle control system with multiple fail-safe mechanisms to shut off or reduce engine power in the event of a system failure."

LaHood, in written, prepared testimony, said his agency will ensure the safety of Toyota vehicles. He added the department's investigation includes the possibility that interference with electronics had a role in sudden acceleration.

"Although we are not aware of any incident proven to be caused by such interference, NHTSA (the National Highway Traffic Safety Administration) is doing a thorough review of that subject to ensure safety," the secretary said. "If NHTSA finds a problem, we will make sure it is resolved."

Slow to Respond

Committee investigators have made preliminary findings that the government was slow to respond to 2,600 complaints of sudden unintended acceleration from 2000 to 2010.

LaHood countered, "Every step of the way, NHTSA officials have pushed Toyota to take corrective action so that consumers would be safe."

On Wednesday, the House Oversight and Government Reform Committee will hear from company president Akio Toyoda, who is expected to speak to the committee and the American public through a translator.

In an opinion piece published by The Wall Street Journal, Toyoda acknowledged that the automaker had stumbled badly.

"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," wrote Toyoda.


Sources: MSNBC, Toyota

Toyota's Loyal Customers Unfazed By Mysterious Recall

Visit msnbc.com for breaking news, world news, and news about the economy

Americans Confused, But Still Driving Their Toyotas


Some Toyota customers are swearing off the brand, while others aren't much worried about sticky gas pedals. For just about everybody, confusion reigns.

Toyota first announced its massive recall last week, which followed one last November. Both involve issues with gas pedals in millions of Toyota's most popular models.

Toyota owners are still waiting for a coherent story about what is actually going on, said Sylvia Marino, executive director at auto sales site Edmunds.com.

"People are feeling a cross between shock, concern and disbelief," she said. "There's a huge amount of confusion. People are saying, 'I think I own a car affected by a recall but I'm not sure,' and it's going to take time for owners to get an official recall notice from their dealer."

Even local dealerships don't have the answers customers are looking for.

Bobby Moore, service director at Atlanta Toyota, said his dealership has received a large volume of phone calls from customers wondering if their particular car is affected by the recall, what Toyota is doing to solve the problem and when the issue will be fixed.

Visit msnbc.com for breaking news, world news, and news about the economy

He said people seem to be feeling a combination of confusion and frustration, and while the dealership has been able to answer most of their questions, there are still a lot of holes.

A Toyota spokesman has said that the carmaker is very close to announcing a solution to the sticking gas pedal issue for cars.

Visit msnbc.com for breaking news, world news, and news about the economy

Still cruising: While the phones may be ringing off the hook at dealerships, many Toyota owners are not all that worried, said James Bell, vice president at Kelley Blue Book.

"Sure you're going to see the reports of people running to Toyota stores and throwing the keys at the dealer," he said. "But I think the general sense is that while this is a problem, we're not going to all of a sudden see speeding Toyotas left and right on the freeway."

Matt Schoder of Sandusky, Ohio said he and his wife are still driving their 2007 and 2010 Camrys -- both of which are covered under the recall -- without concern.
0:00 /1:18Toyota recalls spread

"This could happen to any brand, and it has," he said. "They will come out stronger in the end. Good companies -- and people -- learn from their mistakes."

Matt Fitterer, from Spokane, Wash., said he isn't worried about the recall either and that he will continue to drive his 2009 Toyota Corolla.

"My reaction was that it's not a big deal, the brand itself is very reliable so I know they'll find a fix," said Fitterer. "And if I get pulled over by a cop, I'll just tell them my gas pedal got stuck!"

Slamming the brakes: Other Toyota owners who are more concerned may continue driving their cars because they have no other choice. But when it's time to buy a new vehicle, spending money on another Toyota will be out of the question.

Marino said that of the customers currently in the market for a new car and considering a Toyota, about half of these people may delay purchasing a vehicle until more is learned about the recall.

A third to a quarter of those people considering Toyotas will likely switch to other manufacturers, as indicated by comments such as the post one Toyota owner wrote in an Edmunds.com forum:

"I will NEVER, EVER purchase another Toyota in my life. Toyota has gotten too big, too fast and they're quality has gone down hill."

Taking the GM bait: After Toyota announced its most recent recall, General Motors pounced on the opportunity to take advantage of its competitor's fumble, offering incentives of $1,000 and low financing rates to Toyota customers who have had their vehicles recalled.

Bell said that over the last quarter, Kelley Blue Book has been tracking the number of people visiting its site who identify themselves as Toyota owners but who also view GM vehicles, as well as the number of GM owners who shop around for Toyotas.

The data collected so far shows that GM owners are more likely to also view Toyota vehicles, whereas Toyota customers hardly ever look for GM products.

GM's incentive program could therefore be a great way to attract those Toyota owners who may not have considered GM's lineup before the recall, said Bell.

"It'll make people take pause and say, 'let's go have a sniff and see what they're like,'" he said.

Jeff Morris, a salesman at Jim Crivelli Chevrolet, a GM dealer in Pennsylvania, said that while Thursday was the first day the incentives were offered, the new deals are already attracting customers.

"It seems like a lot of people are in a kind of a state of panic about their Toyota products," he said. "We've already seen interest, so I think [the incentive program] is really going to help business."


Sources: CNN, MSNBC, Toyota

Toyota's Sticky Gas Pedals Conspiracy Or Poor Manufacturing?

Visit msnbc.com for breaking news, world news, and news about the economy

Visit msnbc.com for breaking news, world news, and news about the economy

Toyota Extends Recall To China, Europe


Toyota Motor Corp. said Thursday it's closing in on solutions to a gas pedal system problem, but it still had no details on when drivers would see repairs as an embarrassing recall spread to more than 2.4 million vehicles on three continents.

Toyota dealers in the U.S. have been swamped with calls from concerned owners but had few answers as the recalls snowballed. Elkhart, Ind.-based CTS Corp., which made the parts, is cranking out redesigned gas pedal assemblies that fix the problem, which is caused by condensation around an arm attached to the pedal and springs that send the pedal back to the idle position.

Toyota engineers are developing ways to repair the pedal systems in existing cars and trucks, said spokesman Brian Lyons.

No decision has been made yet on whether to repair the pedals or replace them altogether, he said, and he would not estimate how long it will take for customers to see action. Lyons says the automaker has not decided if the new pedals will go first to factories so production of eight models can resume or to dealers for modification of new cars on their lots and cars being driven by their customers.

Toyota on Thursday extended its recalls to China and Europe, deepening the massive recalls that threatened to undermine the reputation of the world's top automaker as a manufacturer of safe, durable vehicles.

The automaker has informed Chinese authorities it will start a recall in February for 75,500 RAV4 vehicles that were manufactured in China between March 2009 and January 2010, said Toyota spokeswoman Ririko Takeuchi. Toyota is still unsure how many vehicles could have the defect in Europe.

House lawmakers, meanwhile, said they intend to hold a Feb. 25 hearing to review the complaints of sudden unintended acceleration in Toyota vehicles. "Like many consumers, I am concerned by the seriousness and scope of Toyota's recent recall announcements," said House Energy and Commerce Committee Chairman Henry Waxman, D-Calif.

Earlier this week, the company said it was suspending U.S. sales and production of eight models — including the Camry, America's top-selling car — to fix faulty pedal systems that could stick and cause acceleration without warning. A week before the sales suspension, Toyota had issued a U.S. recall for the same eight models, affecting 2.3 million vehicles, even before the recalls in China and Europe.

Also this week, Toyota announced the recall of 1.09 million vehicles in the United States over concerns that floor mats could bend across gas pedals, causing sudden acceleration. That recall covered five models — 2008-2010 Highlander, 2009-2010 Corolla, 2009-2010 Venza, 2009-2010 Matrix, and 2009-2010 Pontiac Vibe, a General Motors Corp. vehicle that shares parts with the Matrix. Those were in addition 4.2 million vehicles recalled in late 2009 over floor mat concerns. Some of the models in both recalls overlap.

Visit msnbc.com for breaking news, world news, and news about the economy

CTS also makes pedals for Honda Motor Co., Mitsubishi Motors, Nissan Motor Co. and Ford Motor Co. in China, but the company said pedals made for those manufacturers don't have the same design. Still, Ford on Thursday halted production of some full-sized commercial vehicles in China because they contain CTS gas pedals.

CTS officials say they have ramped up production at three factories to manufacture redesigned pedals. The pedals are meant to solve problems with condensation that Toyota has said can cause them to react slowly when a driver presses on the gas. In rare cases, the gas pedals can get stuck.

CTS says it is also working with the Japanese automaker to find a potentially quicker repair for vehicles already on the road.

Lyons says the company's No. 1 priority is figuring out how to repair the largest number of vehicles in the shortest amount of time.

Repairs to the pedals still have to go through the normal durability testing to make sure they work properly, Lyons said. He would not estimate how long it will take for Toyota to decide on repairing versus replacement, nor would he say how long it will be until cars and trucks are fixed.

Toyota officials met Thursday with the National Highway Traffic Safety Administration to discuss a potential fix for the recalled vehicles, according to a person who was briefed on the meeting. The person, who was not authorized to speak publicly about the private meeting, said NHTSA officials discussed the potential remedy with Toyota and the government said they would express any concerns they may have about the proposed fix.

The automaker does not need NHTSA's specific approval but company officials do not want to proceed with a fix if the government has concerns about it. NHTSA has not signed off on any fixes at this point, the person said.

Since the initial recall last October, the company has held discussions with the government over the accelerator problem, and NHTSA was expected to review a possible remedy for the latest recall.

The sales suspension in the U.S. — Toyota's biggest market — could endanger the company's fledgling earnings recovery. Toyota only returned to the black for the July-September quarter with net income of 21.8 billion yen ($241 million) after three straight losing quarters.

"It is still uncertain how this recall problem will affect Toyota's profits. But investors are worried it could really pressure the company's overall earnings," said Masatoshi Sato, market analyst at Mizuho Investors Securities Co. Ltd.

Fitch Ratings warned Thursday the massive recalls and sales suspension could dent Toyota's recovery, especially in the vital U.S. market.

Fitch placed Toyota's credit rating of 'A+' on watch negative, meaning the rating could be downgraded. That could increase the interest rate Toyota pays on any debt.

"The recalls and sales and production suspension cast a negative light on Toyota's reputation for quality, just as the company emerges from an unprecedented downturn in the auto industry," Fitch said in a statement.

In March of 2007, Toyota started getting reports of gas pedals being slow to rise after being depressed for acceleration. Engineers fixed the problem in the Tundra pickup early in 2008.

But troubles persisted in other models, eventually leading to last week's U.S. recall and the plans to suspend sales and shut down of six factories while Toyota tries to fix the problems.


Sources: MSNBC, Toyota