#congress

Toyota’s Jim Lentz (who, I’m obligated to share, bears a striking resemblance to the dad from “Teen Wolf”) spent nearly two and a half hours before a committee that by then was investigating what expert witnesses described as an unknown, untraceable electronics error of nearly limitless reach. With this white whale taking the foreground of the committee’s imagination, the committee sharpened its harpoons, licked its lips and sailed out upon uncertain seas in search of its elusive quarry.

It’s been nearly a year since the automotive industry has been treated to a must-watch DC hearing. The last time around, when the executives of America’s automakers went begging to congress for multi-billion dollar bailouts, hearings were heated and combative. Though liberally sprinkled with irony and comedic ignorance, those hearings were, at their heart, a traditional partisan stand-off. But bailouts are also a relatively cut-and-dried topic: you either support them for solid political reasons, or you oppose them for equally solid, equally political reasons. But faced with a national bogeyman of legendary mystery, the lurking terror of unintended acceleration, congress’s task was more complicated than the bailout’s do-we-or-don’t-we dilemma. Tasked with uncovering the truth behind a complex technical problem, is it any wonder that yesterday’s hearings before the House Energy Committee took a turn for the strangely hilarious? [Editor’s note: full prepared statements from all witnesses are available in PDF format here full video of all of yesterday’s testimony is available at CSPAN]

Thank you Chairman Towns.

I am Akio Toyoda of Toyota Motor Corporation. I would first like to state that I love cars as much as anyone, and I love Toyota as much as anyone. I take the utmost pleasure in offering vehicles that our customers love, and I know that Toyota’s 200,000 team members, dealers, and suppliers across America feel the same way. However, in the past few months, our customers have started to feel uncertain about the safety of Toyota’s vehicles, and I take full responsibility for that. Today, I would like to explain to the American people, as well as our customers in the U.S. and around the world, how seriously Toyota takes the quality and safety of its vehicles. I would like to express my appreciation to Chairman Towns and Ranking Member Issa, as well as the members of the House Oversight and Government Reform Committee, for giving me this opportunity to express my thoughts today.

Ah, political spectacle. When Detroit’s CEOs took the stand at congressional hearings over a year ago, the main browbeating bullet point wasn’t the decades of mismanagement and greed, but the fact that Messrs. Wagoner, Mullaly and Nardelli had taken separate corporate jets to the festivities. The lesson: convenient focal points for anger always trump the complexity of a substantive dressing-down. And as congress gears up to grill Toyota’s CEO, the Japanese automaker has given congress just the thing to sharpen its collective knife against: an honest opinion. One document [via Politico PDF here] briefing Toyota USA boss Yoshi Inaba for the hearings, reveals that Toyota believe the current administration is “activist” and that “not industry-friendly.” True or false, this document sets up an adversarial relationship between Toyota and the majority party going into the hearings. Which would be bad enough if Toyota hadn’t also handed over evidence, already leaked by the Oversight committee, indicating that it balances recall costs against risks and lobbies the government in its own interest. On its own, this evidence might be merely embarrassing, but having slighted the Democrats, news that Toyota treats recalls like a business has become prima facie evidence in the (increasingly political) case against the Japanese automaker.

Akio Toyoda is getting a crash course in cross-cultural studies, while he is preparing for his appearance on The Hill this coming Wednesday. Toyota already uncovered the time-tested Washington axiom: “We will fight it tooth and nail, but if we can’t stop it, we might as well dress for it.”

Saturday morning’s Nikkei [sub] greets its readers with the message that “Akio Toyoda’s appearance before Congress on Wednesday could be a chance for the embattled automaker to win back consumer trust in the U.S.”

Hedging a risky bet, the Nikkei adds: “But a poor performance could further undermine its reputation.” To avoid the latter, Toyoda is preparing to counter a three-pronged attack.

This was a rough night and day for Akio Toyoda, chief of the fishtailing Toyota. At around midnight, Tokyo time, the news reached Toyoda-sama that the Honorable Edolphus Towns (D., N.Y.), chairman of the House Oversight and Government Reform Committee, had formally invited him for a visit on the hill.

This had followed a Japanese version of the “he loves me – he loves me not – he loves me.” It was made even more interesting by the botanical truism that the cherry blossom only has five petals to pick. Here, the chronicle of the deflowering …

There is widespread public concern regarding reports of sudden unintended acceleration in Toyota motor vehicles. There appears to be growing public confusion regarding which vehicles may be affected and how people should respond. In short, the public is unsure as to what exactly the problem is, whether it is safe to drive their cars, or what they should do about it. To help clarify this situation, I am inviting you to testify…

House Oversight Committee Chair Edolphus Towns invites Akio Toyoda down to DC for an evening of under-oath testimony and light refreshments. According to the NY Times, Toyoda has said he “would consider” dancing the Potomac two-step “if he receives a formal invitation, which none of the committees have issued.” Consider yourself officially invited, Mr Toyoda. We’ll start making the popcorn.

Toyota heads up to Capital Hill tomorrow to face the ire of the U.S. House Committee on Oversight and Government Reform in a hearing that’s been subtly named “Toyota Gas Pedals: Is the Public at Risk?” A memo by committee staff [via the WSJ] sets a paranoid tone for the hearing, as the NHTSA investigation widens beyond gas pedals alone:

Attention is now being focused on the electronic throttle control system (ETC) to determine whether sudden acceleration may be attributable to a software design problem or perhaps to electromagnetic interference. The committee staff found numerous complaints made to NHTSA describing sudden acceleration that was not caused by either floor mats or sticky pedals.

Toyota’s Yoshi Inaba will face the brunt of the questioning, although Transportation Secretary Ray LaHood and NHTSA administrator David Strickland will surely face questions about their oversight of Toyota (or lack thereof).

Staff from the House Energy and Commerce Committee met with representatives from Toyota yesterday, reports Automotive News [sub], as Congress wades into the Toyota recall debacle. According to a letter from the Energy and Commerce Committee to NHTSA administrator David Strickland and Toyota North America Boss Yoshimi Inaba [letters available in PDF format here], the discussions with Toyota were characterized as “helpful,” but that “it left important questions unanswered, including when Toyota learned about this serious safety defect and what actions the company took to investigate and resolve the hazard.” Hearings have been scheduled for February 25, and the Committee’s letter to Inaba requests disclosure of all internal communication related to to the production shutdown, among other company documents.

The TARP bailout of GM finance partner GMAC is being criticized by a congressional oversight panel [full report in PDF format here], reports the Detroit Free Press. The panel alleges that the Treasury

has not yet articulated a specific and convincing reason to support the company… It has never stated that a GMAC failure would result in substantial negative consequences for the national economy. If Treasury has made such a determination, then it should say so publicly.

Bowing to legislative pressure, GM and Chrysler have announced today that they will initiate reviews of the dealer cull undertaken during bankruptcy. GM is announcing a “Comprehensive Plan To Address Dealer Concerns,” while Chrysler characterizes its agreement as a “Binding Independent Review Process for Discontinued Dealers.” Both firms take pains to thank Senator Dick Durban and Rep Steny Hoyer for their leadership in preparing the non-legislative conclusion of months of bitter acrimony. Culled GM and Chrysler dealers, you know who to make your campaign donations to… unless you’re a member of the dissident group the Committee To Restore Dealer Rights. According to Automotive News [sub], the group says the new plans will only allow “between 39 and 51” culled GM dealers to be reinstated. “The GM proposal guarantees that they would win every arbitration,” says one member of the committee, who alleges that the new process is based on the same allegedly flawed data the initial cull was based on. Hit the jump for the plan outlines.

The recent revelation that congresspeople have been successful in coercing GM to rescind dealer closures in their districts, has the rest of our elected representatives (not to mention GM itself) sitting up and taking notice. In a conference call with Michigan’s congressional delegation, Fritz Henderson said GM was close to a deal which would restore a number of “mistakenly” closed dealerships. But GM hasn’t met with rejected dealers in weeks, and the Committee To Restore Dealer Rights is unaware of any such agreement. “[Henderson] was very vague, and the plan sounded inadequate to me,” Michigan Republican Hoekstra tells Automotive News [sub]. “He explained, for instance, that they might reopen some franchises if they found errors, but he didn’t say what those errors might be.” Henderson also rejected the dealer demand for compensation of $3,000 per vehicle sold in 2006, 2007 and 2008, further supporting suspicions that GM doesn’t have a deal at all. So what is happening?

CNN Money reports that Sen. Tom Harkin (D-IA) has pulled the “Clunker Culling” proposal from the economic stimulus plan making its way through Congress. The provision would have provided up to $4,500 in tax credits for scrapping a used vehicle with under 18 mpg and replacing it with a new car. The bill would have cost taxpayers up to $16b, according to CNN, which notes that lack of support from Republicans doomed the bill. Why? Apparently, “the provision required that the [new] vehicle be assembled in the United States.” Who knows, maybe common sense even had anything to do with it. President Obama did not take a strong position on the Clunker provision according to the Detroit News, but he is vocally backing $2b in battery development spending and a $600m purchase of fuel-efficient cars for the government fleet.