Toyota says growth trumped safety, vows changes

 @ibtimes on February 23 2010 8:56 PM

The head of Toyota Motor Corp blamed the company's drive for rapid growth for slipping safety standards and said he was deeply sorry for accidents caused by problems with Toyota vehicles.

President Akio Toyoda made his apology in written testimony due to be delivered to a congressional panel on Wednesday, as a leading lawmaker told a separate hearing on Tuesday that legislation would be needed to reform the National Highway Traffic Safety Administration (NHTSA).

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.

The world's largest automaker is seeking to repair damage over unintended acceleration and braking problems that have led to the recall of more than 8.5 million vehicles globally.

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 the written testimony, which detailed reforms that would shift control of recall decisions away from the automaker's Japanese headquarters.

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. The hearing is due to begin at 11 a.m. EST (1600 GMT).

Among the witnesses will be a relative of those who died last August when off-duty California Highway Patrol officer Mark Saylor was killed along with three members of his family in a Toyota Lexus sedan.

The crash was a catalyst for renewed attention to the acceleration problems that Toyota had played down in earlier NHTSA investigations.

Toyota shares closed down 1.9 percent at $71.55 in New York on Tuesday, their lowest level since April last year. They fell 1 percent in morning trading in Tokyo on Wednesday.

ELECTRONIC THROTTLES

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 sticky accelerators, accelerators that can be pinned down by loose floor mats and a braking glitch affecting its 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 Toyota did not initiate a study into possible electronic defects until two months ago and NHTSA does not have an electrical or software engineer on staff.

Waxman 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.

Toyota and NHTSA say they have not been able to link conclusively an acceleration incident to interference but have pledged to examine the issue.

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, said Toyota's U.S. sales chief. There are many factors that lead to it.

Other safety improvements pledged by Lentz and Toyoda included a new product safety executive in North America, engineers on accident sites within 24 hours and 100 readers to download data from crash recorders in some Toyota vehicles.

U.S. Transportation Secretary Ray LaHood, who began speaking more than five hours after the hearing began, promised that NHTSA would get into the weeds on electronic safety issues.

LaHood said, contrary to Waxman's assertion, that NHTSA had, in fact, two electrical engineers on staff. LaHood pledged a total review of the electronic controls on Toyota vehicles.

MOST DIRECT APOLOGY

The sprawling investigation into Toyota's safety problems and the automaker's response now includes a criminal probe by U.S. prosecutors and requests for information from the U.S. Securities and Exchange Commission.

In his written testimony, Toyoda apologized to the surviving family of Saylor.

It was the most personal and direct apology so far from Toyoda, who has appeared uncomfortable with the media spotlight and initially resisted calls to testify before lawmakers.

Lentz said Toyota engineers in Japan had told him that there was no evidence of any flaw with the automaker's electronic controls.

Toyota recently began working with an outside consultancy, Exponent Inc, on the electronic throttle issue.

David Gilbert, a professor of auto technology at Southern Illinois University Carbondale, testified that he had found a possible flaw in Toyota's electronic throttles.

Lentz said Exponent was able to reproduce the results described by Gilbert but said Toyota was not sure Gilbert had devised a fair way of replicating real world conditions.

Some lawmakers were supportive of Toyota or prefaced their questions by saying they owned Toyota vehicles.

Diana DeGette, a Colorado Democrat, said there were three Camrys in her household.

Michael Burgess, a Republican from Texas, said U.S. government ownership of General Motors posed an inherent conflict of interest in assessing Toyota.

The U.S. Treasury assumed a majority stake in GM last year in return for bailout money and bankruptcy financing.

Several hundred Toyota dealers have descended on Washington as part of a campaign organized by the automaker to help win back popular and political support.

Among them was Mike Jackson, chief executive of AutoNation Inc. He told Reuters Insider that some sort of incentives on the warranty or maintenance side would help bring back sales.

I'm certain that once the vehicles have been repaired and production has resumed that going into March and April, that (Toyota's) sales will recover.

(Additional reporting by Kevin Krolicki and Kim Dixon; writing by Tim Dobbyn, editing by David Holmes, Dave Zimmerman and Matthew Lewis)

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