WASHINGTON - Top executives at Toyota Motor Corp 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.
Two days of congressional hearings, which started on Tuesday, 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.
Lawmakers expressed fears that Toyota's current massive recalls do not cover all complaints of unintended acceleration. They called for more research and questioned whether safety regulators are too cozy with the auto industry.
Toyota's recent safety problems revolve around sticky accelerators, accelerators that can be pinned down by loose floor mats and a braking glitch affecting its hybrid models.
The automaker faces a criminal investigation, with the U.S. Attorney Office in Manhattan obtaining a subpoena from a federal grand jury. The U.S. Securities and Exchange Commission has also requested information.
Toyota's top-ranking U.S. executive, Jim Lentz, arrived for Tuesday's hearing before a panel of the House Energy and Commerce committee in a silver 2010 Toyota Highlander SUV, one of the vehicles subject to the sticky accelerator recall.
Company President Akio Toyoda, grandson of Toyota's founder, will testify on Wednesday before a panel of the House Oversight and Government Reform committee.
The 53-year-old Toyoda apologized for Toyota accidents in a copy of his testimony prepared for Wednesday's hearing. We pursued growth over the speed at which we were able to develop our people and our organization, Toyoda said.
He also said future recall decisions would no longer be made solely by engineers in Japan, that outside advisers would be consulted.
The unintended acceleration problems have been linked to at least five U.S. deaths, with 29 other fatality reports being examined by U.S. authorities.
Several lawmakers at Tuesday's hearing criticized Toyota's resistance to probing whether its electronic throttle systems can suffer from electromagnetic interference (EMI).
Toyota's leadership has been ambiguous about whether these two recalls fully account for and address the problem of sudden unintended acceleration, said Rep. Bart Stupak, the Michigan Democrat who chairs the oversight and investigations subcommittee.
Henry Waxman, the California Democrat who chairs the full commerce committee, called for fundamental reforms to Toyota's leadership and said reforming the National Highway Traffic Safety Administration would require legislation.
Toyota failed its customers and the government neglected its responsibilities, Waxman said. Today we will try to find out why.
But several Republicans on the committee cautioned that Toyota should not be subject to an unfair grilling. I don't believe that we should go on a witch hunt, said Joe Barton, the ranking Republican on the full committee.
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.
U.S. Transportation Secretary Ray LaHood said he would hold Toyoda to his assurance that the carmaker is working to address all safety issues.
Aaron Bragman, an analyst at IHS Global Insight, said the situation looked likely to get worse this week for Toyota.
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.
Adding to the Japanese automaker's deepening crisis, new documents surfaced over the past two days which detailed how Toyota beat back U.S. safety regulators' efforts for a wider probe in 2007.
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.
Toyota's U.S. shares were down 1.3 percent at $72.00 on the New York Stock Exchange in midday trading Tuesday, down more than 21 percent from their 12-month high reached last month.
(Additional reporting by Chang-Ran Kim and Kevin Krolicki; writing by Tim Dobbyn, editing by David Holmes, Dave Zimmerman and Matthew Lewis)