A document claiming Toyota Motor Corp saved over $100 million by getting U.S. regulators to agree a cheap fix for unintended acceleration problems raised pressure on the company's president as he arrived in Washington to prepare for a grilling from congress.
Akio Toyoda is set to testify before the U.S. lawmakers this week in an effort to contain a safety crisis that threatens the reputation and continued success of the automaker in the market that made it a global powerhouse.
Toyota has recalled over 8.5 million vehicles globally in recent months for problems including sticky accelerators, accelerators that can be pinned down by loose floormats and a braking glitch affecting its hybrid models.
The company said on Monday it had received a federal grand jury subpoena for documents related to unintended acceleration that led to the recall of millions of cars in the United States.
Regulators believe five deaths are associated with floor mats and are reviewing up to 29 other fatality reports to see if they are related to unintended acceleration.
A 2009 internal document turned over to lawmakers and made available on Sunday shows Toyota's Washington D.C. staff trumpeting savings of more than $100 million by convincing regulators to end a 2007 investigation of sudden acceleration complaints with a relatively cheap floormat recall.
The document seems certain to add to the high-stakes debate about whether Toyota missed or ignored complaints about sudden acceleration in its vehicles and whether U.S. safety regulators were tough enough.
Toyota shares rose as much as 3 percent earlier on Monday, lifted by a rally in exporters after the yen slipped against the dollar, but pared gains to close up 1.2 percent.
Investors remain reluctant to buy up Toyota, given uncertainty over how the congressional hearings will go, said Fumiyuki Nakanishi, head of the investment information department at SMBC Friend Securities.
We are likely to see more selling of Toyota shares and buying of Honda shares, he said.
Toyota stock has lost 19 percent over the past month but has steadied over the past 10 trading sessions.
VERY TELLING DOCUMENT
Toyota on Sunday reiterated that it was conducting a top-to-bottom review of all its operations.
Our first priority is the safety of our customers and to conclude otherwise on the basis of one internal presentation is wrong, the company said.
But the U.S. Department of Transportation said the document highlighted Toyota's slow response to the safety problems.
Unfortunately, this document is very telling, said department spokeswoman Olivia Alair in an emailed statement.
Toyota Motor Sales U.S.A. said General Manager Bob Carter would provide an update on its recall actions later on Monday.
Toyota has launched a publicity campaign to convince current and prospective customers that the company is addressing the problems. Its U.S. sales plummeted 16 percent in January and the company has estimated the recalls will cost it $2 billion at the operating level in the fiscal year ending March.
Toyota said it would temporarily halt production in France over the next two months due to soft sales, although it did not specify the number of idle days.
Last week, it had announced a similar stoppage at its factory in Britain for an extra week after Easter, on top of recent and planned output cuts in North America and Japan.
Japanese rival Mazda Motor Corp said it would not launch a special marketing campaign to draw customers away from Toyota, shunning a strategy used by other car makers keen to capitalize on Toyota's recall woes.
TOYODA TESTIMONY KEY
Toyoda, who is set to testify Wednesday after initially ruling out such an appearance, has acknowledged that the automaker founded by his grandfather let its standards slip during fast growth over the past decade.
The company has been tight-lipped about Toyoda's schedule, with a spokesman declining to confirm whether its president was already in the United States. Japanese media reported he had arrived in Washington and television showed images of his private jet.
Analysts said Toyoda's appearance in Washington will be a defining moment in whether and how quickly it can move beyond its safety crisis.
Congress is doing him a favor. He can be apologetic and be contrite and take responsibility and acknowledge that there have been some stress points in growth of the company, said Jeffrey Sonnenfeld, a Yale School of Management senior associate dean and an expert on corporate leadership.
(Additional reporting by David Bailey and Soyoung Kim in Detroit and Chang-Ran Kim, Yumiko Nishitani and Yoshifumi Takemoto in Tokyo; Editing by Lincoln Feast and Jon Loades-Carter)