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Toyoda's words may cost Toyota money

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Toyoda's words may cost Toyota money



In his act of contrition to customers and the American public, Akio Toyoda may be handing lawyers a gift-wrapped hand grenade to use in every lawsuit over a Toyota crash.

"I fear the pace at which we have grown may have been too quick," Toyoda, president and CEO of the Japanese automaker and grandson of its founder, said in written testimony submitted prior to his appearance today before the House Oversight and Government Reform Committee.

"We pursued growth over the speed at which we were able to develop our people and our organization," he said, adding, "I regret that this has resulted in the safety issues described in the recalls we face today, and I am deeply sorry for any accidents that Toyota drivers have experienced."

Yikes. Toyoda's words may be heartfelt, but they could also be damaging.

Put it on PowerPoint

In fact, unless a secret internal memo surfaces that instructed Toyota plant managers to "forget safety and just speed up the line so we can build more of these suckers and make more money," I can't think of much that could be more damning than the top guy admitting that (a) Toyota pushed too hard and too fast to grow, and (b) caused safety problems as a result.

Ed Higgins, co-head of the product liability practice group at the Plunkett Cooney law firm, was surprised at the direct linkage Toyoda made between the company's too-speedy growth and the recent rash of safety recalls.

"At the end of the day," Higgins said of product liability cases involving Toyota vehicles, "it's still going to come down to what the evidence shows" about how up-to-date vehicle designs and manufacturing processes were.

"But I expect every plaintiff's attorney in Toyota product liability suits," he added, "will try real hard to have (Toyoda's words) blown up on PowerPoint to show a jury."

Higgins told me that it's perfectly appropriate for Toyoda to be contrite and vow that the company will do all in its power to avoid problems with its gas pedals in the future.

A fine line

However, Toyoda's direct admission that the company's rapid growth "resulted in the safety issues described in the recalls we face today" is a problem, especially for defense attorneys.

"That's going to be tough to spin," Higgins said.

There's a fine line between showing the proper amount of contrition and humility when facing the Congress of the United States and arming the hosts of potential civil litigants with a weapon to empty millions of yen from Toyota coffers.

Perhaps the narrative of the ongoing Toyota recall saga already has imprinted a certain amount of corporate culpability for Toyota on the public psyche, and Toyoda's public contrition won't make matters worse for the company.

But I imagine folks at law firms around the country will soon be pasting a few of Toyoda's key quotes into their PowerPoint slides to make sure a jury sees them.



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