Internal documents from Toyota Motor Corp. regarding its plan to save $100 million by limiting its safety recalls is causing grave concern and prompted a subpoena of company paperwork by U.S. congressional investigators.
The world’s largest automaker is already clouded with congressional, regulatory, and legal investigation regarding its recall debacle that has snowballed to around 8 million vehicles and at least eight models having been affected. Two U.S. House committees are looking into the matter, and a Senate panel will begin to investigate next week.
Akio Toyoda, the troubled president of Toyota, will be a witness before the House Oversight and Government Reform Committee on Wednesday, Feb. 24. Members from Congress will interrogate him about the large-scale recalls and the timeliness of the company’s remedy.
Toyoda will be scrutinized by a panel of lawmakers even though he has already experienced a torrid of public backlash about Toyota’s global quality control. He is no stranger to criticism—considering that the timing and sincerity of his recent apology was undermined, as well as the possibility of Toyotas’s U.S. boss Yoshi Inaba replacing the global leader himself to face the repercussions at the congressional committee hearing.
“I have received Congressman Towns’ invitation to testify before the House Committee on Oversight and Government Reform on February 24 and I accept. I look forward to speaking directly with Congress and the American people,” said the Japanese President of Toyota.
According to Reuters, Lawmakers will also hear this week from other Toyota executives as well as U.S. Transportation Secretary Ray LaHood. Tuesday’s witnesses before the House Energy and Commerce Committee include Toyota U.S. sales chief Jim Lentz.
In early February, the U.S. Securities and Exchange Commission (SEC), the financial watchdog, had confirmation from legal sources alleging that there was an internal company document dating back from 2007 that claimed Toyota “saved” $100 million when the recall exercise was executed. Moreover, Yoshi Inaba seems to have made a presentation in July 2009 titled “Wins for Toyota—Safety Group” boasting of the company’s gains by postponing rulemaking and deferring fault inspections.
Disturbing details that have surfaced include a “negotiated equipment recall” of floor mats with an estimated number of Toyota Camry and Lexus ES350 vehicles, which totaled a saving of $100 million.
What has come to light is that a massive recall was not instigated in 2007 given that the National Highway Traffic Safety Administration dismissed further investigations of the defective accelerator issues—despite consumer warnings of “extremely dangerous” risks and the potential of a widespread problem. Hence, there are even alarm bells raised about the nature of the relationship between the regulators and Toyota.
“One of the questions is ‘Is this relationship too cozy?’” said Kurt Bardella, a spokesman for Rep. Darrell Issa, the ranking Republican on the Oversight Committee.
At present, U.S. regulators believe that five deaths are associated with floor mats and are reviewing up to 29 other fatality reports to see if they are related to the unintended acceleration problem.
One legal expert said he was not surprised that parallel criminal and civil probes had started given the huge news of the Toyota recall and the large number of people it has affected, but said subpoenas do not by any means indicate Toyota will be criminally or civilly charged.
“You are looking to try and ascertain whether this company knowingly put out a product that is defective, or alternatively, when they learned they had a problem, whether they took prompt steps to try and correct it,” said Phillip Stern, a former U.S. prosecutor and former SEC lawyer now with Neal Gerber Eisenberg law firm in Chicago in an interview with Reuters.
From October 2009, Toyota began a voluntary recall of millions of cars due to its gas pedal potentially being wedged by a faulty floormat design.
The world’s largest automaker is already clouded with congressional, regulatory, and legal investigation regarding its recall debacle that has snowballed to around 8 million vehicles and at least eight models having been affected. Two U.S. House committees are looking into the matter, and a Senate panel will begin to investigate next week.
Akio Toyoda, the troubled president of Toyota, will be a witness before the House Oversight and Government Reform Committee on Wednesday, Feb. 24. Members from Congress will interrogate him about the large-scale recalls and the timeliness of the company’s remedy.
Toyoda will be scrutinized by a panel of lawmakers even though he has already experienced a torrid of public backlash about Toyota’s global quality control. He is no stranger to criticism—considering that the timing and sincerity of his recent apology was undermined, as well as the possibility of Toyotas’s U.S. boss Yoshi Inaba replacing the global leader himself to face the repercussions at the congressional committee hearing.
“I have received Congressman Towns’ invitation to testify before the House Committee on Oversight and Government Reform on February 24 and I accept. I look forward to speaking directly with Congress and the American people,” said the Japanese President of Toyota.
According to Reuters, Lawmakers will also hear this week from other Toyota executives as well as U.S. Transportation Secretary Ray LaHood. Tuesday’s witnesses before the House Energy and Commerce Committee include Toyota U.S. sales chief Jim Lentz.
In early February, the U.S. Securities and Exchange Commission (SEC), the financial watchdog, had confirmation from legal sources alleging that there was an internal company document dating back from 2007 that claimed Toyota “saved” $100 million when the recall exercise was executed. Moreover, Yoshi Inaba seems to have made a presentation in July 2009 titled “Wins for Toyota—Safety Group” boasting of the company’s gains by postponing rulemaking and deferring fault inspections.
Disturbing details that have surfaced include a “negotiated equipment recall” of floor mats with an estimated number of Toyota Camry and Lexus ES350 vehicles, which totaled a saving of $100 million.
What has come to light is that a massive recall was not instigated in 2007 given that the National Highway Traffic Safety Administration dismissed further investigations of the defective accelerator issues—despite consumer warnings of “extremely dangerous” risks and the potential of a widespread problem. Hence, there are even alarm bells raised about the nature of the relationship between the regulators and Toyota.
“One of the questions is ‘Is this relationship too cozy?’” said Kurt Bardella, a spokesman for Rep. Darrell Issa, the ranking Republican on the Oversight Committee.
At present, U.S. regulators believe that five deaths are associated with floor mats and are reviewing up to 29 other fatality reports to see if they are related to the unintended acceleration problem.
One legal expert said he was not surprised that parallel criminal and civil probes had started given the huge news of the Toyota recall and the large number of people it has affected, but said subpoenas do not by any means indicate Toyota will be criminally or civilly charged.
“You are looking to try and ascertain whether this company knowingly put out a product that is defective, or alternatively, when they learned they had a problem, whether they took prompt steps to try and correct it,” said Phillip Stern, a former U.S. prosecutor and former SEC lawyer now with Neal Gerber Eisenberg law firm in Chicago in an interview with Reuters.
From October 2009, Toyota began a voluntary recall of millions of cars due to its gas pedal potentially being wedged by a faulty floormat design.
