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Toyota exec: Time to hide troubles over

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Toyota exec: Time to hide troubles over



WASHINGTON -- Toyota's top U.S. public relations executive warned in January that the automaker needed to "come clean" about sticking accelerator pedals that could trigger sudden acceleration, and that the company "was not protecting our customers by keeping this quiet."

The e-mail from Irv Miller came five days before Toyota launched a recall of 2.3 million vehicles in the U.S. to fix gas pedals. The Obama administration said earlier this week that Toyota hid the problem from U.S. auto safety officials for at least four months and slapped Toyota with a $16.4-million fine, the largest ever for a vehicle defect.

Meanwhile, Toyota executives in Japan said again Wednesday that there were no electronic causes of the unintended acceleration. They declined to say how long they will boost incentives to prevent quality concerns from hurting sales.

Miller, then Toyota's U.S. vice president of environmental and public affairs, tells a colleague that "WE HAVE A tendency for MECHANICAL failure in accelerator pedals," using capital letters for emphasis.

"We are not protecting our customers by keeping this quiet. The time to hide on this one is over," Miller wrote in a Jan. 16 e-mail obtained by the Free Press. The e-mail was among the 70,000 pages of documents the National Highway Traffic Safety Administration has collected as part of its investigation. Several congressional committees also are probing Toyota's response, and the disclosures could lead to another round of hearings on Capitol Hill.

Noting that Yoshi Inaba, Toyota's top U.S. executive, and U.S. sales chief Jim Lentz were meeting with NHTSA, Miller said: "We better just hope that they can get NHTSA to work with us in coming to a workable solution that does not put us out of business."

The e-mail was in reply to a message from a Japanese colleague to another Toyota public relations executive saying, "We should not mention" the accelerator pedal failures because "we have not clarified the real cause" and mechanical failures "might raise another uneasiness of customers."

Miller has since retired from Toyota.

NHTSA said Monday that Toyota knew enough about sticking pedal complaints worldwide to tell dealers in 31 European countries and Canada on Sept. 29 how to tackle complaints, but didn't alert U.S. regulators. The disclosure adds to evidence that Toyota downplayed or withheld for years information from NHTSA and American consumers about vehicle defects, decisions that could haunt the automaker as it fights thousands of lawsuits over sudden acceleration.

Under federal law, automakers have five days to report a safety defect to the U.S. government once it's discovered.

Toyota has two weeks to decide whether to accept the $16.4-million fine.

In a call with analysts, Toyota President Akio Toyoda did not address the issue. Toyota Executive Vice President Shinichi Sasaki reiterated that only the sticking pedals and floor mats were behind sudden acceleration problems that led to the recall of 5.6 million vehicles in the United States.

The company boosted its sales by 41% in March by offering interest-free loans, discounted leases and two years of free maintenance to current customers buying or leasing a new Toyota. Toyota is extending those incentives at least through early May to counter the negative publicity that contributed to a 13.4% drop in sales over the first two months of the year.



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U.S. executive urges Toyota to 'come clean' on defect

David Shepardson / Detroit News Washington Bureau

Washington -- A senior Toyota official emphatically warned in January the Japanese automaker had to "come clean" about problems with accelerator pedals or face the collapse of its business in the United States.

"I hate to break this to you but WE HAVE A tendency for MECHANICAL failure in accelerator pedals of a certain manufacturer on certain models," Irv Miller, then group vice president and head of communications for Toyota Motor Sales USA, wrote using capital letters in a Jan. 16 e-mail to Japanese executive Katsuhiko Koganei.

"We are not protecting our customers by keeping this quiet," wrote Miller, who has since retired in a long-planned move. "The time to hide on this one is over."

The e-mail is the first concrete evidence of a split between U.S. and Japanese Toyota employees over how to handle safety issues. American workers being constrained by Japanese colleagues was a theme that repeatedly emerged in February and March congressional hearings about Toyota's recall of millions of vehicles, mainly for acceleration problems.

Miller said Toyota had to disclose problems with sticky accelerator pedals to the National Highway Traffic Safety Administration.

"We need to come clean and I believe that Jim Lentz and Yoshi are on the way to DC for meetings with NHTSA to discuss options. We better just hope that they can get NHTSA to work with us in coming (up) with a workable solution that does not put us out of business."

Lentz, Toyota's top-ranked American sales executive, and Yoshi Inaba, the automaker's North American president, met with NHTSA officials Jan. 19. Two days later, Toyota agreed to recall 2.3 million vehicles, including its most popular models. On Jan. 26, NHTSA forced Toyota to stop selling the vehicles, representing about 60 percent of its U.S. volume, because a solution to the problem had not been found.

Crafting a public response

Miller's e-mail came in response to a message earlier on Jan. 16 from Koganei, executive director of corporate communications for Toyota Motor Sales USA, also working at Toyota sales headquarters in Torrance, Calif.

Koganei's e-mail went to Miller and 20 officials in Japan and the United States as Toyota was drafting a statement in response to an ABC News story about sticky pedals.

Koganei, proposing changes to a response drafted by others, urged the group not to disclose the pedal problem, based on discussions he'd had with three Japan-based Toyota employees.

"All of them are concerned about the comment with mechanical failures raise another uneasiness with customers," Koganei wrote.

Toyota should not divulge the issue "because we have not clarified the real cause of the sticking acc(elerator) pedal formally," Koganei wrote. "The remedy for the matter has not been confirmed."

In a statement late Wednesday, Toyota declined to comment on Miller's e-mail, citing a policy not to speak publicly about internal communications. "We have publicly acknowledged on several occasions that the company did a poor job of communicating during the period preceding our recent recalls," Toyota said. "We have subsequently taken a number of important steps to improve our communications with regulators and customers on safety-related matters to ensure that this does not happen again. ... we are fully committed to being more transparent."

Miller declined to comment when reached by phone. Koganei did not return calls Wednesday.

NHTSA this week proposed fining Toyota $16.4 million -- the maximum allowed by law -- for knowingly failing to take action on a safety problem. Toyota has until April 19 to decide whether to fight the penalty. Automakers have five days under the law to notify NHTSA after they determine they have a defect.

Transportation Secretary Ray LaHood said this week that Toyota could face fines in other investigations into other recalls.

Toyota President Akio Toyoda, asked Wednesday whether the automaker could be discredited in the United States, said he did not believe so. Speaking through a translator on a call with investors, Toyoda said the company had 20 million American customers and people who knew Toyota well were supportive.

Problem crossed borders

The Koganei and Miller e-mails are among 70,000 pages of records turned over to the government by Toyota that led to the $16.4 million fine. Copies were obtained Wednesday by The Detroit News.

The documents confirm that Toyota engineers knew by December that vehicles in the United States were exhibiting the same problem with gas pedals that had been seen in Europe.

On March 24, Toyota's vice president of technical and regulatory affairs, Chris Tinto, submitted 10 pages of timelines to government investigators outlining what Toyota knew and when it acted during a series of recalls.

Toyota told NHTSA that the first incident was in July 2006, when the automaker received a report about the pedal in an Avalon. Two years later, Toyota received four field reports from Europe on sticking pedals and got the parts for inspection.

Between February and June last year, Toyota quality engineers in Japan, along with pedal designers and engineers at Toyota and its Indiana-based pedal supplier, CTS Corp., searched for a likely cause of the sticky pedals.

Toyota personnel reproduced the phenomenon in April 2009, on a recovered part and then in a laboratory using a vehicle.

In June, a bulletin was issued to Toyota distributors in the U.K. and Ireland identifying a temporary field fix by replacing CTS pedals with a Denso Corp. pedal modified in the field. The next month, Toyota implemented a design change for CTS pedals on a rolling basis, first in Europe.

Toyota says it planned to adapt the fix to pedals used in other markets, including the United States.

On Aug. 21, Toyota inspected a 2009 Matrix in Arizona that was the subject of a sticky accelerator pedal complaint. On Sept. 29, Toyota Europe told distributors in 31 countries that it had identified a production improvement.

NHTSA says Toyota knew at that point it had a problem in the United States and was legally obligated to inform the government and recall the vehicles.

Last fall, complaints in the U.S. started to increase.

In November, Toyota notified NHTSA of three October reports of sticky pedals in Corollas in the United States and provided NHTSA with copies. Toyota engineers over the next two months examined the defective pedals from the Corollas and concluded the phenomenon was "essentially the same" as in Europe.

From The Detroit News: http://detnews.com/article/20100408/AUTO01/4080414/1148/auto01/U.S.-executive-urges-Toyota-to--come-clean--on-defect#ixzz0kVlygvIR

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