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NINETY EIGHT REGENCY

Panel says NHTSA, Toyota fell short investigating acceleration complaints

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Panel says NHTSA, Toyota fell short investigating acceleration complaints

David Shepardson and Christine Tierney / The Detroit News

Washington -- A congressional committee, on the eve of its hearing into the recall of millions of Toyota Motor Corp. vehicles, accused the automaker Monday of misleading the public and chastised Toyota and federal safety regulators for failing to properly investigate safety concerns.

The new criticism came as Toyota disclosed a federal grand jury in New York has opened a criminal investigation into its handling of recalls stemming from reports of runaway vehicles. And the U.S. Securities and Exchange Commission opened a separate probe.

The committee criticism and news of the grand jury and SEC investigations were the latest in a month-long pummeling surrounding Toyota's recall of 8.5 million vehicles worldwide.

They come at a terrible time, as Toyota goes before Congress to defend itself and shore up its vaunted reputation for quality.

The House Energy and Commerce Committee holds a closely watched hearing today to scrutinize the responses of Toyota and the government into reports of unintended acceleration.

Led by President Akio Toyoda, the grandson of the company's founder, Toyota will try to convince Congress that it has learned from its mistakes. Toyoda himself will testify before another House committee Wednesday; he is sending a top-ranking executive to testify today.

The committee and its investigations subcommittee, chaired by Rep. Bart Stupak, D-Menominee, outlined their preliminary findings Monday.

"Toyota consistently dismissed the possibility that electronic failures could be responsible for incidents of sudden unintended acceleration," the committee wrote to Toyota.

Toyota's public statements were misleading on its investigation of electronics as a possible culprit for unintended acceleration, it said, and at odds with what the automaker told investigators.

Toyota isn't the only one in Congress' crosshairs.

The House energy and commerce panel also harshly criticized the National Highway Traffic Safety Administration on Monday for failing to do enough to investigate Toyota vehicles, especially on electronics issues. The initial blame for unintended acceleration was directed at mats that trapped the accelerator.

New e-mails obtained by The Detroit News on Monday show that in August 2007, NHTSA considered expanding its runaway vehicle probe to other models, but decided to close the investigation that October.

In an August 2007 e-mail, Chris Santucci, a former NHTSA official who is manager of technical and regulatory affairs at Toyota, described a meeting at NHTSA on the issue.

"When I told them (I was there) for the ES 350 floor mats, they either laughed or rolled their eyes in disbelief," he wrote.

NHTSA response 'deficient'

NHTSA has received 2,600 reports of runaway Toyotas since 2000, and reports of 34 deaths.

"NHTSA's response to complaints of sudden unintended acceleration in Toyota vehicles appears to have been seriously deficient," the committee said in a letter to Transportation Secretary Ray LaHood.

"Years of mounting evidence, including eight NHTSA investigations -- six at the request of consumers -- and countless unintended acceleration incidents that were summarily dismissed by Toyota as driver error or floor mats, has yielded only a couple of small recalls," said Sean Kane, president of Safety Research & Strategies, in testimony prepared for the hearing.

NHTSA, the committee said, "conducted only one cursory investigation in 2004 into the possibility that defects in electronic controls could be responsible for these incidents."

NHTSA investigator Scott Yon led the probe, but admitted to Toyota in an e-mail that he was "not very knowledgeable about the electronic throttle control system in Toyota vehicles."

The agency has no electrical or software engineers on staff, it told the committee. Toyota's own documents suggest that government investigators "were more interested in mechanical and human explanations for the incidents than electronic ones."

"NHTSA has numerous engineers on staff with experience with electrical engineering and (electronics) issues," Department of Transportation spokeswoman Olivia Alair said in defending the agency.

'Terrible situation'

The grand jury and SEC investigations present Toyota with a whole new set of challenges.

"While it is far too early to predict where this grand jury investigation may lead, it certainly spells trouble for Toyota," said former federal prosecutor Robert Mintz, of McCarter & English.

"The subpoena put the company in a terrible situation. It now forces them to fight on three fronts": the court of public opinion as well as against civil suits and potential criminal exposure.

A document first obtained by The Detroit News on Sunday shows that Toyota safety officials bragged that they had saved more than $100 million by conducting a limited recall in 2007 of just 55,000 floormats -- rather than a costly mechanical fix.

James Bell, market analyst at Kelley Blue Book, says the Toyota document could not have come at a worse time. "It plays back to the original idea that they weren't forthcoming -- not that they were hiding, but that they didn't take the opportunity to embrace this with candor," he said.

The intent of the SEC investigation isn't clear.

Toyota's investors have lost more than $20 billion since recall woes surfaced in late January.

From The Detroit News: http://detroitnews.com/article/20100223/AUTO01/2230357/1148/auto01/Panel-says-NHTSA--Toyota-fell-short-investigating-acceleration-complaints#ixzz0gMjJNZkA

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