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Toyota Subpoenaed By Grand Jury

Potential criminal charges could be another black eye.

by on Jul.20, 2010

Toyota says the steering behavior of its Corolla is "appropriate," but a grand jury is now investigating its actions.

Toyota could be in trouble yet again, and the subpoena it has received from a U.S. federal grand jury in New York suggests that its latest setback could result in criminal charges relating to steering problems with its Corolla and other models.

The newest subpoena was issued on June 29, Toyota confirmed today, without explaining why it waited so long to confirm the development.  It also was advised in March that the company would have to supply documents to a grand jury investigating matters related to its unintended acceleration recalls and braking problems with the Toyota Prius.

Since a spate of safety-related recalls began last October, Toyota has recalled more than 8.5 million vehicles, most for fixes related to unintended acceleration, but also to deal with problems as diverse as hybrid braking issues and extensive corrosion of pickups and minivans.  It has also had to address concerns about steering problems with the Corolla and Matrix, 500 owners complaining the vehicles wander at highway speeds.

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A week ago, Toyota announced that its own investigation had concluded “the design and performance of the steering system is appropriate” in the two models.  But it has also issued a Technical Service Bulletin, or TSB, that would permit dealers to replace their power steering units if customers complain.  The move stops short of a recall that would have added yet another 750,000 vehicles to the list of those recently called back by the maker.

“The company and its subsidiaries are sincerely cooperating with authorities on the probe,” the maker said in regards to the latest subpoena.


Toyota Appoints Panel to Review its Safety

Outside experts will offer advice on safety, recalls.

by on Apr.30, 2010

Former U.S. Transportation Secretary Rodney Slater will head a new, outside panel investigating Toyota's safety problems.

An outside panel, comprised of a variety of experts from the safety, aviation, business and technology fields, will be empowered to advise Toyota how to deal with ongoing safety problems and what to do to prevent similar problems in the future.

The 7-member group will look at all aspects of Toyota’s operations, including internal policies that have delayed action on safety issues, as well as alleged – but so far unproven – issues with the computer control systems used in the maker’s vehicles.

“This is a very important company dealing with a very important issue,” Rodney Slater, the former U.S. Secretary of Transportation, who was asked to put together the panel, told The Detroit News.

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Another senior member of the panel will be Norman Augustine, who served 16 years as a technology advisor to the president, and later became CEO of Lockheed Martin, and Roger Martin, dean of the University of Toronto’s Rotman School of Management.


Toyota May Face Record Government Fine

Maker “failed to live up to its legal obligations.”

by on Apr.05, 2010

Toyota "failed to live up to its legal obligations," declares Transportation Secretary Ray LaHood as the government announces a record fine it hopes to levy against Toyota.

Toyota could face the largest civil penalty ever assessed against an automaker because it “knowingly hid a dangerous defect,” the nation’s top safety overseer, Transportation Secretary Ray LaHood, charged.

The maker may be required to pay a fine of $16.4 million, the largest allowed under the law, in connection with the recall of 2.3 million cars and trucks equipped with potentially sticky accelerators.  The massive service action was announced in January, three months after another recall, involving 3.8 million Toyota vehicles, to deal with the possibility loose carpets could jam their accelerator pedals and cause the vehicles to race out of control.

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“We now have proof Toyota failed to live up to its legal obligations,” which give an automaker only a brief window to report known safety defects to the National Highway Traffic Safety Administration, said LaHood.

“They knowingly hid a dangerous defect for months from U.S. officials and did not take action to protect millions of drivers and their families,” added LaHood, who has been a harsh critic of the Japanese maker, in recent months.


Toyota May Have a Fix for its Accelerator Fix

Maker will install new pedal if accelerator repair doesn’t work.

by on Mar.24, 2010

Toyota may have a new fix for cars that weren't fixed by the first fix.

A growing number of Toyota owners are complaining that the prescribed fix for a sticky accelerator isn’t working – and that’s prompting the embattled automaker to come up with a fix for the fix.

So far, Toyota has announced two separate recalls, since last October, to deal with complaints about so-called unintended acceleration, an issue now linked to dozens of deaths and a growing number of accidents.  In the most recent service action, announced on January 21, and originally involving 2.3 million vehicle,, the maker said it would fix potentially sticky accelerator pedals on eight models by inserting a small metal shim designed to resist binding.

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But since repairs began, federal regulators have received more than 100 complaints by owners of Toyoa vehicles who say the fix did not solve their problem with sudden acceleration.  Now Toyota say it will replace the pedal assembly entirely, if necessary.


Toyota’s Global Troubles: Cosmic Rays and Lawyers

No sign the safety crisis at the world’s largest maker is ending.

by on Mar.16, 2010

The bottom line is only one place Toyota could take a beating in the months to come, after CEO Akio Toyoda took his own hits at a Congressional hearing.

In the comic books, cosmic rays are likely to turn your big, green and mean, or give you the ability to fly and turn invisible.  But frustrated in their attempts to find a cause for still-unexplained problems with Toyota vehicles that allegedly race out of control, investigators are now looking at the possibility that rare cosmic ray strikes could cause onboard computer systems to race out of control.

Toyota is finding itself in an unusual and increasingly untenable position.  The maker has already recalled more than 8 million vehicles around the world.  But despite its efforts to focus on two fixes – and several high-profile efforts to dismiss critics who contend there are other, as yet-unidentified problems with electronic controls – there’s little sign the safety crisis surrounding the world’s largest automaker is about to end.

Quite the contrary.  Though a hefty increase in incentive spending is bringing buyers back to U.S. showrooms, sales are slipping in other parts of the world, notably Europe, where Toyota struggled long and hard to crack into a market much less open to Asian imports than the States.

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Meanwhile, hundreds of plaintiff attorneys are queuing up for the right to take the automaker on in court in what could turn into one of the most contentious legal battles ever involving the auto industry, observers warn.


Antitrust Matters Emerge in European Community

Automotive electronics pricing at suppliers is under scrutiny.

by on Feb.26, 2010

“Lear is cooperating fully with the European Commission..."

Lear Corporation has just reported that it is part of an investigation into anti-competitive practices among automotive electrical and electronic component suppliers by the European Commission.

The EU Commission said it was investigating several suppliers, but so far, only Lear and Leoni Kabel Gmbh of Roth, Germany, have acknowledged they are part of the ongoing investigation.

Japan’s Fair Trade Commission has raided offices of Sumitomo Electric Industries Ltd. and Furukawa Electric Company.

“Lear is cooperating fully with the European Commission in their investigation, and I am confident that our Company is not involved in any anti-competitive practices,” said Bob Rossiter, Lear’s chairman and chief executive officer.
The antitrust investigations are looking at whether the companies improperly divided business with automakers, the EC statement said.

“The commission has reason to believe that the companies concerned may have violated [European Union] antitrust rules that prohibit cartels and restrictive businesses practice,” the EC said.

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Earlier this week the Federal Bureau of Investigation and U.S. Department of Justice also appeared unannounced and uninvited at the offices of three different Japanese automotive suppliers in the Detroit area, raising questions about whether the investigation was triggered by complaints from automakers.   (more…)

After D.C. Hearings, Now What for Toyota?

Reluctant CEOs appearance not enough to begin brand’s turnaround from the damages of an ongoing safety scandal.

by on Feb.25, 2010

Toyota CEO Toyoda was cool under fire, but may not have doused the flames of the safety scandal.

Throughout a blistering afternoon that could have broken a weaker man, Akio Toyoda, often described as the “reluctant” President and CEO of embattled Toyota Motor Co., retained a sense of cool as he stared down the members of a Congressional committee investigating problems that have not only resulted in the recall of millions of Toyota products but tattered a reputation the maker has spent decades cultivating.

It was a critical moment for both Toyota and Toyoda, the executive initially declining to come to Washington, then reversing that stand in the wake of furious headlines.  But with a relatively weak grip on English, and the likelihood that the members of the House Oversight and Government Reform Committee would engage as much in a sort of Kabuki theater as a real inquiry, many observers wondered whether the 53-year grandson of Toyota’s founder could salvage both the automaker’s reputation – and his own.

Sticking close to the script, Toyoda wouldn’t give much ground, despite the toughest questions.  But neither would he yield many details – leaving that up to his subordinates.  And there may lie the real future of Toyota, for in two days of testimony before a pair of Capitol Hill committees, the company that has long stressed safety and quality as its hallmarks suddenly seems both more interested in the bottom line and less able to build safe, reliable cars.

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Toyoda’s appearance before the Oversight Committee began on a reasonably congenial note.  After swearing in, the Toyota chief executive read from a prepared statement in a heavily accented but understandable English.  And, as he has done during three news conferences, back in Japan, in recent weeks, Toyoda began with an apology for the problems his company has caused.

“My name is on every car. You have my personal commitment that Toyota will work vigorously and unceasingly to restore the trust of our customers,” said the man often referred to as “The Prince,” back in Japan.  In turn, the assembled Congress men and women offered polite thanks for Toyoda’s decision to come to Washington.  But the friendly tone didn’t last very long, and the executive switched to working in Japanese, through a translator.


FBI Raids Three Key Japanese Auto Suppliers

Potential antitrust violations under investigation.

by on Feb.24, 2010

Denso was one of three Japanese auto electronics suppliers to be raided by the FBI.

Concerns about potential antitrust violations led the FBI to raid the U.S. offices of three major Japanese suppliers, though it is unclear if still other manufacturers are involved in the investigation.

Among the company’s targeted were Denso Corporation,  one of the world’s largest producers of automotive components and a member of the Toyota Motor keiretsu, a closely-linked network of cross-held companies that characterizes the way the auto industry operates in Japan.  Also raided were Yazaki North America and Tokai Rika.

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A spokeswoman for the U.S. Justice Department confirmed that the government is looking into possible antitrust action by automotive electronics suppliers.

“The antitrust division is investigating the possibility of anti-competitive cartel conduct,” said the department’s Gina Talamona, in a prepared statement. “We are coordinating with the European Commission and other foreign competition authorities.”   (more…)

Horror of Saylor Fatal Lexus Accident Reviewed at Opening of Congressional Hearing

Toyota and NHTSA excoriated for “troubling patterns” of ignoring safety. Toyota unintended acceleration unresolved.

by on Feb.24, 2010

“If Camry and Prius were airplanes they would be grounded,” said Towns.

Committee chairman Edolphus Towns opened his Toyota safety hearings today with harsh words:  “NHTSA failed the taxpayers. Toyota failed their customers – we now have 39 deaths attributed to Toyota products,” said Towns.

“If Camry and Prius were airplanes they would be grounded,” said Towns.

Department of Transportation Secretary Ray LaHood said that  any of the Toyota vehicles subject to recall “are not safe.”

“If your car is listed take it to the dealer to get it fixed,” said LaHood.

Toyota’s recalls – thus far – address  five separate Toyota product safety issues. In total, some 5.3 million Toyota vehicles across 14 model lines  are affected by one or more of
these recalls in the United States.

Millions more Toyota products are involved in global recalls.

LaHood says NHTSA has the resources to enforce safety laws.

Toyota, of course, initially and subsequently asserted that unintended acceleration was solely the result of “pedal entrapment” from floor mats.

That assertion was negated when NHTSA investigators found the floor mats of a Toyota locked in the trunk of a vehicle that was involved in a fatal accident.   (more…)

Three Charges Arise at Hearing on Toyota Safety

Both Toyota and NHTSA accused of cover-ups, incompetence and unacceptable behavior at the first House Hearing.

by on Feb.23, 2010

In sworn testimony today, Toyota's U.S. head Jim Lentz now admits that 70% of unintended acceleration complaints are not covered by current Toyota recalls. Worse, recall authority resided in Japan. Then, Lentz admitted he was unaware of the safety recall procedures in use at Toyota globally. The flow of information was one way - from the U.S. to Japan, said Lentz. The Japanese did not share global information about defects with Toyota U.S. or its American consumers or with NHTSA.

Politicians Henry Waxman, Chairman of the House Committee on Energy and Commerce, and sub-committee chairman  on Oversight Investigation,  Bart Stupak, kicked off a hearing in Washington late this morning with three specific charges against Toyota and the National Highway Traffic Safety Administration.

It was just the beginning of  a tough hearing that showed how badly Toyota is out of touch with customer concerns.

As the hearing progressed there were also other accusations about Toyota’s lack of concern for its customers and claims of ignorance on the part of Toyota’s U.S. head about Toyota’s apparently secret safety procedures.

Both Waxman and Stupak are of course running for reelection this year, as is the rest of the lower house of Congress amid voter frustration about Congressional incompetence in the face of rising unemployment and its ongoing failure to institute reforms that would make illegal the ongoing Wall Street practices that led to the collapse of the global financial markets that caused the continuing  Great Recession.

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So the hearing gives Congressmen a unique opportunity to express concern in a rare  non-partisan way that they actually care about something that the voters are concerned about – as opposed to the issues of the lobbyists who constantly court them and provide post-public-office  jobs for them.  (I realize this is a dubious assertion.)

It was in this context that Waxman and Stupak said that a “preliminary review” of the documents provided by Toyota raised three concerns.  (more…)