Documents: Toyota boasted saving $100M on recall

WASHINGTON (AP) - Toyota officials claimed they saved the
company $100 million by successfully negotiating with the
government on a limited recall of floor mats in some Toyota and
Lexus vehicles, according to new documents shared with
congressional investigators.
Toyota, in an internal presentation in July 2009 at its
Washington office, said it saved $100 million or more by
negotiating an "equipment recall" of floor mats involving 55,000
Toyota Camry and Lexus ES350 vehicles in September 2007.
The savings are listed under the title, "Wins for Toyota -
Safety Group." The document cites millions of dollars in other
savings by delaying safety regulations, avoiding defect
investigations and slowing down other industry requirements.
The documents could set off alarms in Congress over whether
Toyota put profits ahead of customer safety and pushed regulators
to narrow the scope of recalls. Two House committees are holding
hearings this week on the Japanese automaker's recall of 8.5
million vehicles in recent months to deal with safety problems
involving gas pedals, floor mats and brakes.
The world's largest automaker has been criticized for responding
too slowly to complaints of sudden acceleration in its vehicles,
threatening to undermine its reputation for quality and safety.
The documents were turned over to the House Oversight and
Government Reform Committee and obtained by The Associated Press on
Sunday. The presentation was first reported by The Detroit News.
A Toyota spokeswoman did not immediately comment.
Kurt Bardella, a spokesman for Rep. Darrell Issa, R-Calif., the
top Republican on the Oversight Committee, said the documents raise
questions on "whether Toyota was lobbying for less rigid actions
from regulators to protect their bottom line."
The new documents show the financial benefit of delay. In the
presentation, Toyota said a phase-in to new safety regulations for
side air bags saved the company $124 million and 50,000 man hours.
Delaying a rule for tougher door locks saved $11 million.
On defect regulations, the document boasts that Toyota "avoided
investigation" on rusting Tacoma pickup trucks. The National
Highway Traffic Safety Administration investigated the case in 2008
but closed it without finding a safety defect. Toyota agreed to buy
back certain rusty pickups, inspect other and extend warranties.
The document lists seven "Wins for Toyota & Industry,"
including "favorable recall outcomes," "secured safety
rulemaking favorable to Toyota" and "vehicles not in climate
legislation." Another page lists "key safety issues," including
"Sudden acceleration on ES/Camry, Tacoma, LS etc."
In one passage, the document says Toyota "negotiated
'equipment' recall on Camry/ES re SA; saved $100M+, w/ no defect
NHTSA had launched an investigation in March 2007 over
allegations that floor mats were interfering with accelerator
pedals. Toyota told the government a month later that there was
"no possibility of the pedal interference with the all-weather
floor mat if it's placed properly and secured."
By that August, the government had connected the problem to a
dozen deaths and a survey of 600 Lexus owners discovered 10 percent
reported sudden or unexpected acceleration. But the recall in
September 2007 was limited to 55,000 Camry and ES350 vehicles to
replace the floor mats.
The 10-page internal presentation was dated July 6, 2009, less
than two months before a high-speed crash near San Diego killed a
California highway patrol officer and his family and reignited
concerns over sudden acceleration in Toyotas.
In October 2009, Toyota issued its largest-ever U.S. recall,
involving about 4 million vehicles, over concerns of pedals getting
stuck in floor mats.
The presentation lists Yoshi Inaba, Toyota's chief executive in
North America, on its cover. Inaba is scheduled to testify before
the House Energy and Commerce Committee on Wednesday, along with
Toyota president Akio Toyoda and Jim Lentz, president of Toyota
Motor Sales USA.
Separately, the government said Sunday it was already
investigating reports of sudden acceleration in Toyota vehicles
when the nation's largest auto insurer shared complaints about the
The Transportation Department released documents showing that in
December 2003 it began investigating 39 complaints of sudden
acceleration involving 2002-03 Toyota Camry sedans. That was about
three months before State Farm shared with NHTSA complaints of
sudden acceleration in 2003-04 Lexus ES300s and 2002-04 Camrys.
The document released by Transportation Secretary Ray LaHood
said the department had received allegations of 26 crashes and 4
injuries involving drivers complaining of their vehicles surging
when backing up, pulling in and out of parking spaces and shifting
Reports of deaths in the U.S. connected to sudden acceleration
in Toyota vehicles have surged in recent weeks, with the toll of
deaths allegedly attributed to the problem reaching 34 since 2000,
according to new consumer data gathered by the U.S. government.

(Copyright 2010 by The Associated Press. All Rights Reserved.)

AP-NY-02-21-10 1836EST

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