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NINETY EIGHT REGENCY

Governors of states with Toyota plants defend beleaguered automaker

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Governors of states with Toyota plants defend beleaguered automaker

David Shepardson and Alisa Priddle / The Detroit News

Four governors from states with Toyota Motor Corp. plants spoke out Wednesday in defense of the Japanese automaker and questioned the U.S. government's conflict of interest as a stakeholder in some of Toyota's rivals.

In a rare show of support for the embattled Toyota, the governors wrote to congressional representatives who will lead hearings about Toyota's recalls and how it handled customer complaints.

"Despite the federal government's obvious conflict of interest because of its huge financial stake in some of Toyota's competitors, it has spoken out against Toyota including statements U.S. government officials have later been forced to retract," the letter said, a reference to comments last week by Transportation Secretary Ray LaHood.

The letter was signed by governors Steve Beshear of Kentucky, a Democrat; and Republicans Mitch Daniels of Indiana; Haley Barbour of Mississippi; and Bob Riley of Alabama.

"It is unfortunate and unfair that Toyota has fallen victim to aggressive and questionable news coverage of these issues when the real story is how quickly Toyota identified the problems, found solutions and delivered those solutions to its dealers worldwide," the governors wrote.

The letter emerged as the pressure on Toyota continued unabated from Chicago, where the automaker was a center of attention at the Chicago Auto Show, to Washington, where a congressional hearing on Toyota's recalls scheduled for Wednesday was postponed after a fresh snowstorm struck the capital. Rep. Darrell Issa of California, the ranking Republican on the House Committee on Oversight and Government Reform, said Toyota President Akio Toyoda should come before the committee and testify this month.

"Given the number of outstanding questions surrounding Toyota's relationship with U.S. regulators and in the best interests of moving forward, I'd like to help facilitate a dialogue between Mr. Toyoda and lawmakers from both parties and both chambers," said Issa, one of the lawmakers addressed by the governors.

Toyoda, the grandson of the automaker's founder, told reporters in Japan that he would come to the United States to meet with company staffers and dealers, among others, but did not say when. Company officials say he is unlikely to come before March. Congressional hearings will start in late February.

At the Chicago Auto Show media preview Wednesday, Toyota's troubles were front and center. Toyota officials came to Chicago hoping to use the show to reassure a nervous public about the safety of its vehicles, both present and future.

But the company's most important presentation, the unveiling of the new Toyota Avalon sedan, was overshadowed by the enormous media interest in the automaker's difficulties over the recent recalls.

Toyota has recalled more than 8 million vehicles since September, mostly to fix problems that could lead to unintended acceleration.

The new Avalon was largely ignored as a crush of reporters pressed executives for updates about Toyota's recalls.

Other manufacturers also struggled to get their message out. Even executives from rival companies were being asked about the likely impact of Toyota's troubles.

Bob Carter, head of Toyota brand sales in the U.S., said that the automaker is fixing vehicles at a furious rate while preparing to launch the Avalon, the largest sedan in the Toyota lineup in North America. It will go on sale this spring with "a wide array of safety features," he said.

The unveiling of the Avalon shows life goes on at Toyota, said Howard Polirer, director of industry relations for AutoTrader.com. He said that if plans to show the Avalon had been dropped, it would have generated speculation that future products from the automaker were also in jeopardy.

As for current customers, dealerships have repaired more than 220,000 vehicles with gas pedal problems and continue to do so at a rate of about 52,000 a day, Carter said. He reiterated that Toyota doesn't believe electronic throttle issues are involved.

Dealers on Tuesday received the software fix they need to address braking issues with the Prius and Lexus HS hybrids. Letters to Prius customers will go out by week's end and Lexus owners will get their letters within weeks, Carter said. But anyone who comes into a dealer now will be taken care of.

Because the congressional hearing on the recalls was postponed, the auto show became the public forum for Toyota to address its woes, said Ed Kim, director of industry analysis for AutoPacific in Tustin, Calif.

Given the criticism the automaker has come under for not being transparent enough or quick to action, "they had to say something," Kim said.

Other automakers at the show were careful not to appear opportunistic as the world's No.1 automaker continues to falter.

Mark Reuss, president of GM North America said to do so would be tacky.

Jim Farley, Ford Motor Co.'s head of global marketing, did not want to speak ill of Toyota, his former employer.

But he said Ford was seeing more Toyota trade-ins, and uncertainty about the resale value of Toyota vehicles has boosted prices in the used car market in the last 30 days. "That's what happens when you take 20 percent of vehicles out of the used-car market."

Honda Motor Co. has not seen an influx in sales from Toyota customers, said spokesman Kurt Antonius. Honda is "not taking advantage of the situation," he said. "We have our own vehicles to sell and they are a tough competitor and we will continue to compete with them.

"Everyone's had recalls," Antonius said. "It's not a new phenomenon in our business."

Meanwhile, legal threats against Toyota continued to mount. Lawyers with nearly two dozen firms around the country hope to consolidate their claims that Toyota's recalls have cost customers billions of dollars.

P. Tim Howard, a Northeastern University law professor leading the group seeking class-action status for lawsuits, said Wednesday that the more than 8 million vehicles recalled by Toyota have collectively lost more than $2 billion in resale value because of the recalls.

Toyota's Carter dismissed suggestions that quality had slipped as a result of the company's growth to become the world's largest automaker.

"Nothing is more important to Toyota than restoring the trust and confidence of our customers," Carter said.

From The Detroit News: http://detnews.com/article/20100211/AUTO01/2110351/1148/Governors-of-states-with-Toyota-plants-defend-beleaguered-automaker#ixzz0fF76MBlb

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Beshear isn't the greatest governor this state has had. Then again, no recent Kentucky governor was all that great.

Beshear essentially said the Toyota recall was voluntary on LEX18 news this evening. I wonder what the NHTSA would tell him ...

Beshear needs to be reminded of the other automakers that provide jobs to Kentucky. GM has been here longer than Toyota and Ford is going to have a major high volume plant in Louisville as soon as its ramped up to make the new Focus. And if Toyota goes, I can see Ford filling some of the economic void left behind.

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>>"...Despite the federal government's obvious conflict of interest because of its huge financial stake in some of Toyota's competitors..."<<

>>"Four governors from states with Toyota Motor Corp. plants spoke out Wednesday in defense..."<<

Pot... meet kettle.

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