Toyota chief faces congress spotlight

 @ibtimes
on February 23 2010 11:24 PM

Toyota Motor Corp's president braced for tough questions from a congressional panel on Wednesday after the Japanese automaker conceded it had let safety standards slip and could still not explain most incidents of unintended acceleration.

President Akio Toyoda again apologized for the series of problems that have led to the recall of more than 8.5 million vehicles, been blamed for at least five deaths and set off fierce criticism of both the world's largest automaker and the U.S. National Highway Traffic Safety Administration (NHTSA).

We pursued growth over the speed at which we were able to develop our people and our organization, and we should sincerely be mindful of that, Toyoda said in written testimony ahead of his appearance on Wednesday.

In a first day of congressional hearings, Rhonda Smith, driver of a Toyota Lexus in a 2006 incident where her car reached 100 mph, told lawmakers she felt Toyota and NHTSA had dismissed her belief that the vehicle's electronics were to blame.

Shame on you, Toyota, for being so greedy. And shame on you, NHTSA, for not doing your job, a tearful Smith told a panel of the House Energy and Commerce Committee.

LOST SIGHT OF CUSTOMER

Tuesday's hearing was mostly measured in tone.

Toyoda, grandson of Toyota's founder, may not fare as well before the often more vocal House Oversight and Government Reform Committee on Wednesday. That hearing is due to begin at 11 a.m. EST (1600 GMT).

Toyoda had already pledged to focus more on quality and less on growth when he took over the reins last June, aiming to reduce the number of models sold worldwide and 'get back to basics'.

Toyota's top-ranking U.S. executive, Jim Lentz, arrived for Tuesday's hearing in a silver 2010 Toyota Highlander SUV, one of the vehicles subject to the sticky accelerator recall.

I think we outgrew our engineering resource, Lentz told the hearing. And the most important thing is that we lost sight of the customer.

Lentz agreed that 70 percent of complaints about unintended acceleration remained unexplained. That is probably fair to say, he said. There are many factors that lead to it.

ELECTRONICS QUESTIONED

The unintended acceleration problems with Toyota vehicles have been linked to at least five U.S. deaths, with 29 other fatality reports being examined by U.S. authorities.

Toyota's recent recalls have focused on loose floor mats that can pin down the accelerator, sticky accelerators and a braking glitch affecting its Prius and other hybrid models.

But many lawmakers, some Toyota owners and safety experts fear Toyota's electronic throttle control system can be subject to electromagnetic interference.

Henry Waxman, the California Democrat who chairs the full commerce committee, said NHTSA lacked the expertise and resources to assess Toyota's insistence that its vehicles could not fail.

Ultimately, I believe addressing this problem will require legislation.

U.S. Transportation Secretary Ray LaHood promised that NHTSA would get into the weeds on electronic safety issues.

Japanese politicians have publicly worried about the impact the recalls would have on growth, exports and Japan's image.

It's a matter of safety and quality, so it is important for them to gain the understanding of the American people and work to rebuild trust, Chief Cabinet Secretary Hirofumi Hirano told a news conference. The fact that there was a fault in quality must be accepted gravely.

While Toyota's safety problems have dented its once gold-plated reputation for quality, auto industry recalls are commonplace.

South Korea's Hyundai Motor Co said it stopped U.S. sales of its 2011 Sonata sedan due to potential faults in the front door latches that could affect 5,000 vehicles.

And India's top carmaker Maruti Suzuki India, 54 percent-owned by Japan's Suzuki Motor, is recalling 100,000 of its A-Star hatchbacks to fix a possible fuel leak.

Shares in Toyota were down 1.5 percent in Tokyo, having slid 22 percent since January 21, when it expanded its recall to include sticking accelerators. Hyundai shares fell 3 percent in Seoul, while Maruti shares edged down 0.2 percent.

(Additional reporting by John Crawley and Kevin Krolicki in WASHINGTON; David Bailey in DETROIT; Miyoung Kim in SEOUL; Janaki Krishnan in MUMBAI; Graphic by Catherine Trevethan; Writing by Lincoln Feast, Editing by Ian Geoghegan)

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