Toyota: New State Farm Disclosures Trigger Accusations Of Lackadaisical NHTSA

Bertel Schmitt
by Bertel Schmitt

Akio Toyoda is spending the weekend in Japan, being prepped for his appearance in front of the modern day version of the tribunal of the Spanish Inquisition, better known as a Congressional Hearing.

According to Reuters, and as suggested by TTAC, Toyoda “is likely to undergo intense preparation. Toyota may hire lawyers to drill him with mock questions, one consultant said. A company source said it had not yet been decided whether Toyoda would speak in Japanese or English, but the company has already contacted some translation companies.”

The weekend drill was interrupted by the news that State Farm had informed the NHTSA as early as February 27, 2004, that the insurance company had five claims of unwanted acceleration in the 2002 Lexus ES 300 during the previous 12 months. Reuters broke the story, writing “the insurer said earlier this month it had contacted the National Highway Traffic Safety Administration in late 2007. However, prompted by the public interest in Toyota, the insurer reviewed its records again and has now found that it contacted safety regulators initially in 2004.” All hell broke loose …

Hearing that, the DetN immediately dispatched reporters to the DOT in Washington, where they were told by Transportation Department spokeswoman Olivia Alair on Saturday that NHTSA was already aware of the issue as early as December 2003.

On March 2, 2004, State Farm sent data on 34 more claims to the NHTSA, including 18 on the 2002 Camry and 11 on the 2003 Camry. Two days later NHTSA opened a formal investigation of alleged unintended acceleration in the 2002-03 Toyota Camry/Solara and Lexus ES 300.

NHTSA closed the probe a few months later on July 22, 2004. “NHTSA dropped its investigation because it didn’t find a safety defect or any evidence of an unreasonable safety risk,” writes the Detroit News. “NHTSA had six separate investigations into sudden acceleration of Toyota vehicles in the last decade — and required Toyota to do little.”

On hearing the news, Akio Toyoda and his advisers were making up their minds whether this was good or bad for Toyota. Renegade Toyota lawyer Dimitrios Biller talks of a “culture of hypocrisy and corruption” at Toyota. If Biller’s subpoenaed documents contain smoking gun residue, then Toyota will be toast.

However, there is a chance that LaHood will land in the hot seat at the hearings. Former NHTSA Chief Joan Claybroke had said before that NHTSA “were really lackadaisical in pursuing this case. In fact, they knew about it before 2007, there were six investigations by the agency. They were close because they really didn’t find anything. And I think they didn’t look hard enough.” She also said “I believe that Toyota did stonewall the NHTSA and the public.”

In an interview with Good Morning America, LaHood denied his agency had been asleep at the switch. We most likely will hear this sentence again on Wednesday:

“On my watch, I’ve been in this job a little bit over a year, safety has been our number one priority.”

And expect LaHood repeating versions of the following:

“Our safety people have been on 24/7 with these people and really held their feet to the fire. And we will continue to do that. We are not gonna let up. We are not gonna get lackadaisical about this. We will stay on this until every car is safe. They know we are watching them 24/7. We are feeling a strong obligation to the driving public, particularly those consumers who are driving Toyotas to make sure that every car is safe. And we will not rest until that happens.”

Speaking of the Spanish Inquisition, in the 5 minute interview, LaHood repeated four times that his agency is “holding Toyota’s feet to the fire.” He seems to miss the good old days when this wasn’t a figure of speech.

Further insinuating that Toyotas are a road hazard, and that a speech writer is polishing his lines, LaHood repeated at a news conference in Los Angeles: “We at DOT and we at our safety agency will continue to work 24/7 and we will not sleep until every Toyota is safe for every American who owns one.”

When LaHood was asked at the conference whether the government stands to benefit as a GM shareholder from its regulatory crackdown on Toyota, and whether there could be a conflict of interest, LaHood reverted to his own self: “That argument is baloney.”

Just as Toyoda’s advisers are working hard to make their boss look good on the hill, LaHood’s writers will have their work cut out before the Transportation Secretary gets in the cross-hairs.


Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • John Horner John Horner on Feb 21, 2010

    More news on this topic is out today: http://www.politico.com/news/stories/0210/33248.html " Internal Toyota documents derided the Obama administration and Democratic Congress as “activist” and “not industry friendly," a revelation that comes days before the giant automaker's top executives testify on Capitol Hill amid a giant recall. According to a presentation obtained under subpoena by the House Oversight and Government Relations committee, Toyota referred to the “changing political environment” as one of its main challenges and anticipated a "more challenging regulatory" environment under the Obama administration's purview. " And then there are internal Toyota documents bragging about how they saved money by stonewalling. Ken Thomas with the Associate Press is generally very good at reporting on auto industry issues, and he put this story out today: http://news.yahoo.com/s/ap/20100221/ap_on_bi_ge/us_toyota_recall "WASHINGTON – Toyota officials claimed they saved the company $100 million by successfully negotiating with the government on a limited recall of floor mats in some Toyota and Lexus vehicles, according to new documents shared with congressional investigators. Toyota, in an internal presentation in July 2009 at its Washington office, said it saved $100 million or more by negotiating an "equipment recall" of floor mats involving 55,000 Toyota Camry and Lexus ES350 vehicles in September 2007. The savings are listed under the title, "Wins for Toyota — Safety Group." The document cites millions of dollars in other savings by delaying safety regulations, avoiding defect investigations and slowing down other industry requirements." The funny thing about corporate misdeeds is that they are almost always well documented. Some flunky inside the company is always going to write a memo bragging about what he or she pulled off.

    • See 3 previous
    • Robert.Walter Robert.Walter on Apr 11, 2010

      Now we know the answer to my question of 21 Feb: From Bloomberg 09 April: "Were it not for a statute limiting the civil fine announced this week to $16.4 million, Toyota could have faced a potential penalty of as much as $13.8 billion, NHTSA said in the letter. That’s based on each of the 2.3 million vehicles involved in the recall qualifying for a fine of as much as $6,000 each. In the April 5 letter to Toyota, NHTSA said an official from the Japanese parent company who wasn’t identified “inexplicably” told the carmaker’s North American engineering unit on Oct. 21, 2009, not to make the same design change to CTS pedals for U.S. vehicles that was already under way for those in Europe."

  • Rnc Rnc on Feb 22, 2010

    Did anyone else notice the new "Toyota ='s Style" Commercials this weekend? No mention of quality, safety, just Toyota's got style, another step closer to GM neverland.

  • SCE to AUX The original Capri was beautiful. The abomination from the 90s was no Capri, and neither is this.It looks good, but too similar to a Polestar. And what's with the whacked price?
  • Rover Sig Absolutely not. Ever.
  • EBFlex No. I buy as little Chinese products as possible.
  • John "...often in a state of complete disarray on the roads" What does that mean? Many examples in poor repair? Talk about awful writing.
  • Varezhka Saving sedans in US or globally? Right now around half of the global sedan sales is in China, just under a quarter in North America, and the remaining quarter distributed around the rest of the world. So for a sedan to stay around they must sell well in both China and North America (BMW, Mercedes, Toyota, Honda) or just extremely well in China (VW/Audi and Nissan). For everyone else, the writing is on the wall. There’s also a niche of subcompact sedans in SE Asia and India but I believe those are being replaced by SUVs too.
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