A top Toyota Motor Corp U.S. executive promised a quality shake-up on Tuesday as the Obama administration said it would hold the carmaker's chief to a pledge to address safety issues after massive recalls.
Congressional hearings over the next two days are critical for the world's largest automaker as it seeks to repair damage over unintended acceleration problems and braking issues that have led to the recall of more than 8.5 million vehicles around the world.
Criminal investigations are now being hinted at by subpoenas from the U.S. Securities and Exchange Commission and a federal grand jury in New York.
Toyota's top-ranking American executive, Jim Lentz, will testify on Tuesday before a panel of the U.S. House Energy and Commerce committee in proceedings scheduled to start at 1100 EST.
Company President Akio Toyoda, grandson of Toyota's founder, will testify on Wednesday before a panel of the House Oversight and Government Reform committee.
In a statement prepared ahead of the hearings, U.S. Transportation Secretary Ray LaHood said he would hold Toyoda to his assurance that the carmaker is working to address all safety issues.
In addition to Toyota executives, U.S. safety regulators will also be grilled on the question of why red flags were missed.
The mood of the investigative committees going into these hearings is looking increasingly hostile toward Toyota, said Aaron Bragman, analyst at IHS Global Insight.
Adding to the Japanese automaker's deepening crisis on Monday, new documents surfaced which detailed how Toyota beat back U.S. safety regulators' efforts for a wider probe in 2007.
From a public relations standpoint, this has been an unmitigated disaster from the start for Toyota, handled poorly by a team unfamiliar with major public relations catastrophes, Bragman said.
The situation looks likely to get worse this week for Toyota, as now the company's advertising and public relations teams' attempts to win over the public and media seem disingenuous at best.
In testimony prepared for his appearance on Capitol Hill, Toyota's Lentz said: We now understand that we must think differently when investigating complaints and communicate faster, better and more effectively with our customers and our regulators.
Mike Jackson, chief executive of AutoNation Inc, was one of several hundred Toyota dealers and workers who came to Washington on Tuesday as part of a campaign organized by the automaker to help win back popular and political support.
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, Jackson told Reuters Insider.
In the wake of Toyota's massive recall, Consumers Union, the nonprofit publisher of Consumer Reports, issued a call on Tuesday for urgent changes to strengthen U.S. auto safety regulation.
It said that the U.S. safety regulatory system should be reformed to become more transparent and that the National Highway Traffic Safety Administration should have more funding and the ability to impose tougher sanctions.
PRELUDE TO TESTIMONY
In a preview of the line Toyota's president could take in his testimony, Toyoda said in a statement published in The Wall Street Journal he was committed to making sure Toyota learns from the crisis and changes its ways.
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, Toyoda said.
The extended apology from Toyoda came hours after Toyota said it had received a federal grand jury subpoena from the U.S. attorney's office in Manhattan on February 8.
The automaker also said the SEC had asked for documents related to unintended acceleration of Toyota vehicles and the company's disclosure policies. Toyota said it would cooperate with the investigations.
Toyota's U.S. shares were down 0.8 percent at $72.35 on the New York Stock Exchange on Tuesday morning, down more than 21 percent from their 12-month high reached last month.
(Additional reporting by Chang-Ran Kim and Kevin Krolicki; writing by Matthew Lewis, editing by Hugh Lawson, David Holmes and Dave Zimmerman)