Toyota faces a Capitol grilling

By Jennifer Liberto, senior writer

WASHINGTON ( -- As Toyota's troubles mount, the automaker is gearing up for a new front in the battle to salvage its once-sterling image and credibility: Capitol Hill.

Toyota officials have been called to testify before two House panels this month, and the Senate may schedule one as well. The snowy weather spurred Congress to postpone one hearing scheduled for Wednesday until later this month.

And a lot is at stake for Toyota, experts say.

"They need to rebuild credibility with regulators and legislators," said Yale School of Management professor Jeffrey Sonnenfeld.

The latest blow to that credibility came Tuesday when Toyota recalled more than 400,000 hybrid vehicles, most of them its vaunted Prius, for braking problems. That followed an apology last Friday by company president Akio Toyoda that many observers found awkward and inadequate. (Toyota recalls 437,000 hybrids)

In addition, two separate problems involving gas pedals spurred Toyota to recall some 8.1 million vehicles worldwide since last November, costing the company an estimated $2 billion in repair costs and lost sales.

D.C. muscle: Toyota has been gearing up for its appearances in Washington by beefing up its lobbying, consulting and attorney teams.

"We have added bandwidth to our communications efforts, government relations outreach and compliance efforts in an effort to ensure a successful recall," said Cindy Knight, Toyota's spokeswoman in Washington.

Among the new Washington hires is a top consulting firm, the Glover Park Group, whose founders include Joe Lockhart, a White House spokesman and adviser during the Clinton years.

In another sign of a broader focus on the federal government, Toyota president Toyoda penned a column published Tuesday in the Washington Post. He vowed, among other things, to do a better job reaching out to agencies charged with protecting the public.

"While problems with our cars have been rare over the years, the issues that Toyota is addressing today are by far the most serious we have ever faced," Toyoda wrote.

While the impending hearings could be Toyota's first potential Congressional smackdown, the company is no stranger to the D.C. power system.

In 2009, Toyota spent $5.3 million on lobbying, which was less than the $8.6 million General Motors and $7.2 million Ford spent, according to the Center for Responsive Politics. But Toyota spent more than other foreign automakers, compared with Honda's $2.5 million and Nissan's $3.6 million.

House Oversight: Toyota now has an appointment Feb. 24 before the House Oversight Committee, a hearing originally scheduled for Wednesday but postponed due to the snow in Washington. The panel plans to question the company's president of North America operations, Yoshimi Inaba, about problems with both the gas pedal and the Prius brakes.

"Consumers want to know whether their cars are safe to drive and, if not, they need to know what to do about it," said the committee's chairman, Rep. Ed Towns, D-N.Y.

The committee has asked Toyota for records documenting consumer complaints, among other things.

Rep. Darrell Issa, R-Calif., plans to ask federal transportation officials, who will also be at the hearing, why records suggest they said they didn't have the resources to investigate complaints of Toyota accelerator pads. Among those scheduled to testify is Transportation Secretary Ray LaHood and National Highway Traffic Safety Administration chief David Strickland.

"This is an investigation that stretches beyond the political confines of Washington, but rather impacts the most fundamental elements of our society and public safety," Issa wrote in a letter to Towns about the Toyota complaints.

House Energy: At a scheduled Feb. 25 hearing of the House Energy and Commerce Committee, it could get even uglier for Toyota.

Last week, a letter from the committee to Toyota's U.S. sales chief, James Lentz, accused him of telling a different story to television news media than he told committee staff at a briefing last month.

For example, according to the letter, Toyota told the committee staff that it was "unlikely" that sticking gas pedals caused "sensational stories of drivers losing control over acceleration." But then Lentz apparently said the opposite on CNBC, vowing to fix the accelerator pads.

The committee also wants to know why Toyota officials told CNBC that they became aware of accelerator complaints last October, while telling Congressional staff they learned of such complaints in the United Kingdom last April or May.

"Congress and consumers need to know exactly what the problem is, how to fix the problem, and what must be done to protect drivers of Toyota vehicles," said Rep. Bart Stupak, D-Mich., chairman of the House Energy panel's oversight subcommittee and one of the signers of the letter to Lentz.

Experts say Toyota has lost control of its message and needs to try to get it back during these Washington hearings.

Indeed, Sonnenfeld said Akio Toyoda should testify before Congress in person.

"He must come to Washington and not send partially informed lieutenants to blink in the spotlight of scrutiny," said Sonnenfeld, who wrote Firing Back: How Great Leaders Rebound After Career Disasters. "People want to learn what's going on." To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed3.82%3.84%
15 yr fixed2.96%2.94%
5/1 ARM3.25%3.31%
30 yr refi3.82%3.85%
15 yr refi3.02%3.02%
Rate data provided
View rates in your area
Find personalized rates:
Index Last Change % Change
Dow 17,416.85 225.48 1.31%
Nasdaq 4,683.41 45.41 0.98%
S&P 500 2,021.25 19.09 0.95%
Treasuries 1.75 0.03 1.57%
Data as of 3:30am ET
Company Price Change % Change
Apple Inc 118.90 3.59 3.11%
Bank of America Corp... 15.43 0.23 1.51%
Yahoo! Inc 43.73 -2.73 -5.88%
Microsoft Corp 42.01 0.82 1.99%
Facebook Inc 78.00 1.76 2.31%
Data as of Jan 29


Shake Shack is a huge success in New York. But will the 'fine casual' burger and fries joint be a big hit with investors too? It looks like Wall Street has worked up its appetite for the Shake Shack IPO. More

The Wednesday announcement that Don Thompson will retire as CEO of McDonald's leaves just two black CEOs in the elite Dow 30. More

Google reported a quarterly profit on Thursday that rose from a year ago, but the company fell short of Wall Street's expectations. More

On demand delivery startup WunWun is expecting its order volume to double by the time they close up shop on Monday. All thanks to a blizzard. More

The IRS said it has carried out thousands of audits of offshore schemes and pursued criminal charges that have resulted in "billions of dollars in criminal fines and restitutions." And it won't stop there. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2015 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2015. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2015 and/or its affiliates.