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Toyota boasted about saving 100 million dollars by limiting its safety recalls
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02/22/2010 10:28 PM
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New documents raise heat on Toyota
[link to ca.news.finance.yahoo.com]
TOKYO (AFP) - Pressure rose on Toyota days before its chief faces a US congressional grilling, as new documents showed the automaker boasted about saving 100 million dollars by limiting its safety recalls.
The beleaguered Japanese giant has pulled more than eight million vehicles worldwide and faces a host of US lawsuits linking its defects to more than 30 deaths in class action suits that could cost it billions of dollars.
As its president Akio Toyoda, the grandson of the company's founder, braces for a showdown with a Congress panel on Wednesday, more bad news hit the iconic company embroiled in the worst crisis in its 70-year history.
Internal company documents subpoenaed by the Congress committee showed that Toyota executives reported last year that the company had limited the financial impact of its product recalls through lobbying in Washington.
Related article: Toyota said lobbying efforts limited recall impact
In one internal document, Toyota's top North America executive Yoshimi Inaba spoke of "wins for Toyota and (the car) industry" achieved by its Washington bureau when it "secured safety rulemaking favourable to Toyota".
Inaba said in the presentation that Toyota saved 100 million dollars by negotiating with US authorities a limited recall of the 2007 Toyota Camry and Lexus ES requiring it to take back floor mats but not fix car defects.
The company also said it had avoided an investigation into rust problems affecting the undercarriage of its Tacoma pickup trucks.
Toyota reacted to the release of the documents by pledging: "Our first priority is the safety of our customers, and to conclude otherwise on the basis of one internal presentation is wrong."
Critics have attacked Toyota for its sluggish response to complaints linked to accelerator systems and of covering up the defects.
Former Toyota lawyer Dimitrios Biller, now involved in a legal battle with the company, has accused it of hiding and destroying evidence of safety flaws and of "a culture of hypocrisy and deception".
America's top automobile insurer State Farm has said it first reported Toyota acceleration problems to the US Department of Transportation in 2004, also prompting questions as to whether regulators dithered in response.
Toyoda and Inaba are due to face questioning on the safety recalls on Wednesday at a hearing by the House Oversight and Government Reform Committee -- one of three scheduled Congress hearings on Toyota's safety woes.
A major focus is expected to be Toyota's so-called electronic throttle control or 'drive-by-wire' system in which the accelerator pedal and the engine are linked electronically rather than mechanically.
Toyota has said there is nothing wrong with the system.
Congress members are also expected to examine when the world's biggest carmaker first knew of the "sticky accelerator" problems, and whether it took its time before informing US regulators and the public about them.
The office of the committee's ranking Republican, Darrell Issa, said Inaba's presentation raised "significant questions regarding the interactions between Toyota Japan, Toyota North America and government regulators".
"Did regulators do their due diligence once problems were brought to their attention? Did Toyota raise potential safety problems with regulators as soon as they knew a problem existed?" asked Issa's spokesman in a statement.
"But there are also questions involving what happened in-between and whether Toyota was lobbying for less rigid actions from regulators to protect their bottom-line."
The recalls have spelled a public relations disaster for Toyota, which has apologised to customers in major advertising campaigns -- but Japan's biggest business lobby said Toyoda could still limit the wider damage.
Hiromasa Yonekura, the incoming chairman of the Japan Business Federation or Nippon Keidanren, said: "It's good to put out the fire by responding swiftly. I don't think there will be an impact on the entire industry."
Tatsuya Mizuno, auto analyst at Mizuno Credit Advisory, said "it's still too early to comment on the latest internal documents".
"But if it's regarded as another action by Toyota to try to hide things, it's going to deal another blow to the company. What Toyota is facing is not only a technical problem but a management one."
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02/22/2010 10:29 PM
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