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Toyota to let U.S. unit order recalls

By Ben Rooney, staff reporter

NEW YORK (CNNMoney.com) -- Toyota executives told lawmakers Tuesday that its U.S. and Canadian divisions will have more authority to decide when to issue a recall as the automaker faces mounting pressure from Washington over its recent safety problems.

Toyota has recalled millions of vehicles worldwide for problems related to sudden acceleration, which have been blamed for several accidents resulting in injuries and death. The automaker has repeatedly apologized for the lapses in quality control and Toyota technicians are working extended hours to repair the recalled vehicles.

Under new plans to improve quality control, Toyota's North American operations "will have more autonomy and decision-making power with regard to recall and other safety issues," Yoshimi Inaba, president and chief operating officer of Toyota North America, said in testimony before the Senate Commerce Committee.

Inaba also announced that Rodney Slater, a former U.S. Transportation Secretary, will head a "blue ribbon" panel to review Toyota's own investigation into its global operations.

Toyota came under fire last week during two separate House hearings for the automaker's management structure, which some lawmakers said gives Japanese executives too much power over U.S. operations.

"For the future, our U.S. staff will have a clear decision-making role," Shinichi Sasaki, executive vice president at Toyota Motor in charge of quality assurance and customer service, told the committee. "Ultimately, our goal is for the United States to have an even greater voice in decisions on recalls and other safety and satisfaction issues."

In response to questioning, Sasaki acknowledged that Toyota's North American management were not included in the recall decision-making process in the past. Speaking through a translator, he said that this policy may have caused "some concern or suspicion."

He said Toyota will deploy the new system immediately should the company issue another recall.

Questions unresolved

At the conclusion of the hearing, Sen. Jay Rockefeller, D-W.Va., the committee's chairman, said key questions remain unanswered about Toyota's safety record.

"We feel some frustration in trying to communicate or effort to get to the bottom of some of the questions," he said, adding that the frustration was due in part to the language barrier.

"It's the question of accountability," the senator said. "I think there is more knowledge at the table than has disclosed itself."

Rockefeller also pledged to work on "comprehensive legislation" aimed at improving how the government regulates the auto industry. "The American people deserve a top-to-bottom review, not just on past errors, but on the road ahead," he said.

He said Congress should consider, among other things, making brake override systems mandatory for all automakers and require senior executives to legally certify information submitted to safety regulators.

Since 2000, there have been 43 complaints of fatal incidents that allegedly involve sudden acceleration in Toyota vehicles, according to the National Highway Transportation Safety Administration.

While those complaints have not yet been confirmed, the reported incidents involve 52 fatalities and 38 injuries, NHTSA said.

The sudden acceleration issue has been in the spotlight since it was disclosed last month that an accident involving a Toyota vehicle killed four people in San Diego last August.

That accident sparked the recall of millions of Toyota vehicles for problems with floor mats that could cause accelerator pedals to become trapped. Toyota has subsequently recalled millions more cars for "sticky" accelerator pedals.

"It's clear that somewhere along the way, public safety took a back seat to corporate profits," Rockefeller said.

Akio Toyoda, the company's president, acknowledged last week that Toyota's rapid growth over the last few years has contributed to the recent safety problems.

Concern about electronics

However, some lawmakers and outside researchers have suggested that sudden acceleration in Toyota vehicles could also be caused by defects in its electronic throttle control system (ETCS).

Toyota maintains that electronics are not to blame for sudden acceleration.

"As a result of our extensive testing, we do not believe sudden unintended acceleration because of a defect in our ETCS has ever happened," Uchiyamada said. "However, will continue to search for any event in which such a failure could occur."

LaHood said NHTSA is conducting a review of the electronic throttle control system in Toyota vehicles. He also said the Transportation Department may recommend that all cars sold in the United States come equipped with a brake override system.

Lawmakers criticized NHTSA for failing to respond sufficiently to reports of sudden acceleration dating back several years. "The public's trust has been compromised and the system has broken down," Rockefeller said.

LaHood, who was named Transportation Secretary in January 2009, defended his agency.

"NHTSA has a very aggressive enforcement program," he said. "We stand ready to ensure prompt action on any additional defects that we have reason to believe are present."

Clarence Ditlow, executive director of the Center for Auto Safety, told the committee that regulators need to enact radical reform and that lawmakers should provide additional resources to ensure effective oversight.

"The government has to totally revamp its investigatory system," said the Center for Auto Safety's Ditlow. "It has to realize that it's the cop on the beat, not Mr. Nice Guy."

Toyota has also come under fire for a 2009 memo in which staffers boasted of the company saving $100 million by negotiating with U.S. regulators for a limited recall for certain cars.

In response to a question about the 2009 report, David Strickland, NHTSA's administrator, denied that the agency has shown Toyota any preferential treatment.

"The claims that Toyota made about negotiating or influences are false," he said. "That document has no foundation."

Inaba, whose name appeared on the document, said it was prepared before he rejoined the company and was inconsistent with Toyota's "guiding principle."  To top of page

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