By on February 21, 2010

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.

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22 Comments on “Toyota: New State Farm Disclosures Trigger Accusations Of Lackadaisical NHTSA...”

  • avatar
    John Horner

    LaHood is trying to do his job, which is admittedly something new in modern times for the head of the Department of Transportation.

    Previous Secretaries Norm “name the airport in my home city after me” Mineta (2001-2006) and Mary “I Love Me Some Privatized Roads” Peters (2006-2008) are the Transportation Secretaries who presided over the DOT/NHTSA during its long slide. Republicans since Regan have positioned themselves as the government=evil party, and when in power they generally do everything they can to neuter the government (except for the military, which oddly enough is never big or expensive enough for them). Then when said neutered government, er, can’t perform, they say “see, I told you it was hopeless”.

  • avatar

    The damage Congress or LaHood can do to Toyota is nothing – absolutely nothing – compared to what will be done to them by private citizens and their hordes of lawyers in the courts.

  • avatar


    Joan Claybrook has no credibility. Every word she speaks has an agenda behind it.

    • 0 avatar

      To be honest, how is that different from any other person within the political or management realm? (To borrow a phrase from the Eurythmics) “Everybody’s lookin’ for something…” (or equally: “Everybody’s sellin’ something.”)

  • avatar

    Yep, blame Bush, when that fails, blame Reagan. The left just loves them some right wing boogeymen they can blame.

    The simple truth is that government bureaucracies do not have the direct accountability that businesses in free markets have (or elected officials do, for the matter). I can buy a different car if I don’t like Toyota’s products. I can’t buy a different DMV, or a different EPA. I have little say in the daily operation of my local police department, which can take away my property and deprive me of my liberty. Plus, they all are tax eaters, producing virtually no wealth that benefits society.

    Civil service laws, intended to reduce political influence patronage and corruption, ironically have insulated the bureaucracy from accountability. Government jobs have become close to sinecures, and paying government workers more money than what taxpayers earn on average is not a sustainable situation. Small surprise that when a failing school district’s teachers, already being paid more than 3X the local average income, refused contract concessions, the superintendent fired them all.

    While civil service laws ostensibly prevent political influence, at least by politicians trying to influence civil servants, our current situation actually encourages political influence by those civil servants. There are now more union members who are government workers than in the private sector. Those public employee unions like AFSCME and the thugs at SEIU make huge political contributions. Those on the left howled in outrage at the recent Citzens United SCOTUS decision that affirmed that groups of individuals have First Amendment rights just because some of those groups may be businesses, yet those same leftists have no problem with the corruption inherent in public employee unions making political contributions.

    On the local side that means your police union hand picks the mayor who negotiates their contract. On the national scale, that means $800 billion in “stimulus” dollars in the hands of government workers. The single most frequent visitor to the White House has been Andy Stern, president of the SEIU – and he probably was breaking federal lobbying statutes in doing so, but don’t expect an investigation by Eric Holder’s DOJ.

    In the current recession in the US, nearly all job losses have been in the private sector. Though there have been some limited layoffs of state and local government workers, the unemployment rate for government workers is about 3%, compared to over 10% nationally.

    There are some things that government can do well – most of those things are specifically mentioned in the US Constitution.

    The problem with regulations is that they almost invariably involve some corruption of the free market, which necessarily will lead to some aspect of crony capitalism, as businesses maneuver and angle. Businesses are not advocates of free markets. Free markets involve risk and many businesses are risk adverse. If the government is the cheapest (or only) source of capital, you learn from Willie Sutton and go where the money is. Many large businesses prefer to be a government sanctioned monopoly. So Detroit’s cab companies lobby for laws that prevent competition from jitneys and car services. But they couldn’t do it without the active complicity of the government.

    A business can commit fraud, anyone can be a thief, but to be truly corrupt you need the cooperation of those with real authority.

    • 0 avatar

      Hey Ronnie, It’s a car blog.

    • 0 avatar

      In the macro-term, it is up to the market. In the micro-term, it has to be regulated by the government. Unethical, incompetent and/or unorganized industry just loves it when people remain ignorant of this. Organizational inefficiency, in government, is the necessary cost of balancing (not necessarily overcoming) the reality of consumer perceptual lag in the short-term and the inability of the private-sector to properly police itself over the long-term.

    • 0 avatar


      Shouldn’t your reply be to the first poster above? Just sayin’.


      Well said.

  • avatar
    Robert Schwartz

    The NTHSA should be run like a good government agency like the SEC, or a local police department.

    When the SEC received numerous reports that Bernie Madoff was running a scam what did they do? Why they sat on them. One time they prepared a subpoena to get his trading records from the central depository. But they decided that it would be too much work to go through all of those records, so they trash canned the subpoena. The funny thing is that, if they had sent the subpoena in, they would have received back a reply that there were no trading records for Mr. Madoff. You see in running his scam for 20 years, he never made any trades.

    How about the Braintree MA police department? After Amy Bishop shot her brother, she ran to Ford dealership, waived the shotgun around and told the mechanics to put their hands up. The police decided that the shooting was an accident and never charged her. They should have charged her with the murder of her brother, as they had a prima facie case. Beyond that, she had committed assualt with a deadly weapon at the Ford dealership.

    The moral of the stories is that NTHSA is just like every other governmental unit. If you keep that in mind, you won’t be disappointed.

    • 0 avatar

      Good examples, but too broad a “just like every other” brush don’cha think? If I apply this approach, Apollo was a failure because of the deaths on the launchpad, the Shuttle was likewise because 2 went down; all unmanned probes were a waste of time and money because the Mars Explorer was programed in Imperial Units …

    • 0 avatar

      Funny you bring up NASA and the shuttle program, who through their own negligence and pressure that the put on some suppliers, who were also at fault, is the reason for the Challenger disaster. People often include NASA as a money pit when they speak of government spending. I won’t get into that argument, but it does seem that NASA isn’t the most efficient agency either. I think that is what he was trying to say. Gov’t efficiency is an oxymoron.

  • avatar

    Geez…and I thought this was a car review and reminisce site…
    I’m getting the feeling I’m at a tea party meeting.
    Remember the problems in New Orleans…and Brownie…and Brownies boss? That’s what happens when people who want smaller government get their way…That’s how we get bad government..Balance…that’s what good government and good living is all about…Try it guys..

  • avatar

    Fact: Reagan grew government, just like Bush I, Clinton, Bush II, and Obama. They ALL grew government. All of them.

    Fact: Reagan massively grew the national debt as a percentage of GDP in constant dollars.

    Fact: So has EVERY OTHER PRESIDENT since.

    Spare me the revisionist history. I can read the numbers. They’re not debatable.

    Fact: We’ve had a negative balance of trade every year since 1975.

  • avatar

    Well I have a question about that weird State Farm monologue. Isn’t popping out your fake eyeballs and handing them to someone just about the same as spitting out your dentures and doing the same?

    That is just freakin’ gross. I know I sure would’ve had something to say (unlike the story teller).

  • avatar
    John Horner

    More news on this topic is out today:

    ” 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:

    “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.

    • 0 avatar

      Anybody know:
      – if there are guidelines for determining the magnitude of the (up to 16M USD fine)?
      – how many times can the fine be applied? (Is there a “counts” system similar to criminal prosecution?
      – what the statute of limitations is for past offen(c/s)es is?

      If there is a generous statute of limitations, an ability to fine on individual counts, and a way to hit the bell at the top of the fine slide, when that hammer comes down, that 100M USD (in addition to all the civil suits that are coming down the pike) is gonna seem like a drop in the bucket and ain’t nearly gonna be enough.

    • 0 avatar

      Fecal matter, say hello to the rotary air movement device.

      You two are going to get along famously.

    • 0 avatar

      ” Internal Toyota documents derided the Obama administration and Democratic Congress as “activist” and “not industry friendly”…

      Why, then, the tens of billions in loans to carmakers?

      Gotta love that dry Japanese sense of humor…

    • 0 avatar

      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.”

  • avatar

    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.

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