Toyota head prepares for Congress grilling on recalls

Toyota head prepares for Congress grilling on recalls
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First Published: Fri, Feb 19 2010. 10 04 AM IST
Updated: Fri, Feb 19 2010. 10 04 AM IST
Tokyo/Washington: The head of Toyota Motor Corp will testify to US lawmakers next week after bowing to pressure to explain the company’s worst ever safety crisis, becoming the highest profile Japanese executive to face a such a grilling from Congress.
Akio Toyoda, the grandson of Toyota’s founder, said on Friday he intends a “sincere explanation” of the problems that lead to the recall of millions of vehicles after accepting an invitation to testify next Wednesday before a congressional panel.
His decision ends days of uncertainty about how the embattled automaker would respond to calls for a better response to its safety issues.
Toyoda previously said he would send the company’s North American chief and that he had no plans to appear before Congress himself, a stance that later drew criticism from Japan’s transport minister.
“I look forward to speaking directly with Congress and the American people,” Toyoda said in statement.
Toyoda also said the firm is investigating the causes of the unintended acceleration and braking, which have led to a recall of about 8.5 million cars worldwide.
The US House Oversight and Government Reform Committee invited Toyoda on Thursday, a month into a safety crisis that has tarnished its reputation, hurt sales and sapped profits.
“It’s good that he has decided to accept (the invitation),” Seiji Maehara, Japan’s transport minister said on Friday.
“But it’s a shame there was flip-flopping on the decision.”
Shares of Toyota eased 1.2% in Tokyo trade on Friday, having fallen some 20% since 21 January, wiping out more than $25 billion in market capitalisation.
US Market
Analysts said Toyoda’s initial silence on the recall woes and earlier apparent reluctance to testify had reflected badly on the world’s largest automaker.
“Toyota gave the impression that it was not serious enough about the issue or taking the US market too lightly when it said Mr. Toyoda had no imminent plans to travel to the US,” said Tsutomu Yamada, a market analyst at kabu.com Securities.
Public relations experts said company executives appearing at such panels needed to be well prepared and able to answer any kind of question.
“The important thing is that they actually answer all questions and don’t dodge or run away,” said Shoichi Yoshikawa, President and CEO of Hill & Knowlton Japan.
A company source said while they have not yet decided whether Toyoda would speak in Japanese or English, they have contacted some translation companies already.
Toyota has recalled more than 6 million vehicles in the US market for problems involving the accelerator pedal becoming stuck, either by a loose floor mat or because of a glitch in the pedal assembly.
Up to 34 crash deaths have been blamed on unintended acceleration in Toyota vehicles since 2000, according to complaints tracked by US regulators.
A separate recall is under way to fix software controlling the brakes on Toyota’s Prius hybrid, while US safety regulators have also begun a preliminary investigation into complaints about steering problems in late model Corollas.
Toyoda, just seven months into his tenure in the top job at the automaker, has at times appeared uneasy with the heightened scrutiny.
The House oversight panel said it had also issued a subpoena for internal documents Toyota had fought to keep sealed in a legal battle with a former employee who says the automaker routinely hid evidence of safety problems.
White House spokesman Robert Gibbs said the Obama administration hoped Toyota would do all it could to rectify “a dangerous situation.”
“Everybody, I think, is rightly concerned about the recalls that have happened,” Gibbs told reporters aboard Air Force One.
Congress Pleased
Representative Edolphus Towns, chairman of the oversight panel and Representative Darrell Issa, ranking Republican, said they were pleased Toyoda had agreed to answer questions.
“We believe his testimony will be helpful in understanding the actions Toyota is taking to ensure the safety of American drivers,” they said in a joint statement.
The House oversight hearing on Wednesday is one of two congressional inquiries set for next week into the Toyota safety crisis. On Tuesday, the US House Energy and Commerce Committee will hold its own hearing.
The oversight panel has asked insurers for information they provided to US safety regulators on reports of unintended acceleration in Toyota vehicles.
Toyota’s safety woes are deepening at a time when automakers worldwide are struggling to emerge from a deep decline in sales — led by a collapse in the US market — that prompted bankruptcies and consolidation.
Toyota’s US sales dropped 16% in January and are expected to take a big hit in February as well.
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First Published: Fri, Feb 19 2010. 10 04 AM IST
More Topics: Toyota | Japan | US | Akio Toyoda | US Congress |