Toyota: Saved $100 million dodging recall

ttoyota_recall_docu_FINAL.jpgInternal Toyota documents provided to the House Oversight and Government Reform Committee show the carmaker saved $100 million by negotiating an 'equipment' recall' rather than a vehicle recall.by Peter Valdes-Dapena, senior writer


NEW YORK (CNNMoney.com) -- In an internal presentation, Toyota staffers boasted of the company saving $100 million by negotiating a limited recall for Toyota Camry and Lexus ES cars over a problem that could cause unintended acceleration.

In an internal Toyota (TM) document used as part of a company presentation on its government relations, dated July 6, 2009, the phrase "Negotiated 'equipment' recall on Camry/ES re: [sudden acceleration], saved $100 million+ with no defect found" is among a bullet-pointed list of "wins."

An "equipment" recall is a more limited type of recall, often to repair an accessory or non-essential part of the vehicle.

The presentation was given to Yoshi Inaba, Toyota's top North American executive.

The reference was apparently to a September 2007 recall to secure floor mats that could trap the cars' gas pedals.

In August 2009, the month following the presentation in which the executive boasted of saving $100 million over a full recall, a family of four was killed in a Lexus with its gas pedal stuck under a floor mat.

In November 2009, Toyota had full recall to reconfigure the gas pedals of numerous Toyota models to prevent such incidents.

Among other "wins" listed were "Avoided investigation on Tacoma rust" and helping win delays in various new federal safety regulations.

Toyota documents, presented in the form of a corporate slide show, also presented an unfavorable view of the Obama administration. The documents said that the U.S. Department of Transportation and the National Highway Traffic Safety Administration were "not industry friendly" under Obama.

The Toyota documents also said that NHTSA's "new, more aggressive management includes more attorneys," but "less understanding of engineering issues." Also, the documents said that equipment manufacturers face "a more challenging regulatory and enforcement environment."

"Safety is everybody's responsibility. It's not just the federal government's job to catch safety defects," said Olivia Alair, a spokeswoman for the National Highway Traffic Safety Administration. "It's the responsibility of automakers to come forward when there is a problem. Unfortunately, this document is very telling. And that's why Secretary LaHood has been saying we're going to hold Toyota's feet to the fire and make sure they do what's necessary to make their cars safe for the driving public."

A copy of Inaba's presentation was provided to the House Oversight and Government Reform Committee, which is set to grill Toyota president Akio Toyoda on Wednesday. It is unclear who provided the document to the Committee.

"If anything but the safety of America's drivers influenced the decision-making process, the entire purpose of National Highway Traffic Safety Administration will be undermined," said Kurt Bardella, a spokesman for Rep. Darrell Issa, R-Calif., a member of the House Committee on Oversight and Government Reform.

In a statement, Toyota responded to the report of the document.

"Our first priority is the safety of our customers and to conclude otherwise on the basis of one internal presentation is wrong," the company said. "Our values have always been to put the customer first and ensure the highest levels of safety and quality."

"Our recently announced top-to-bottom quality review of all company operations, along with new quality initiatives and a renewed commitment to transparency are all designed to reaffirm these values," Toyota added.  To top of page

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