Wednesday, February 24, 2010

Toyota ‘lost way’ in rapid expansion

Toyota ‘lost way’ in rapid expansion
By Bernard Simon and Stephanie Kirchgaessner in Washington
Copyright The Financial Times Limited 2010
Published: February 23 2010 15:09 | Last updated: February 24 2010 00:47
http://www.ft.com/cms/s/0/b955b84e-2089-11df-bf2d-00144feab49a.html


Akio Toyoda, the embattled Toyota chief executive, has admitted that the company lost its way and its sense of priorities in its rapid rise to the top, culminating in a massive vehicle recall and a loss of consumer trust.

“I fear the pace at which we have grown may have been too quick,” Mr Toyoda says in written testimony released on Tuesday and due to be delivered on Wednesday before the US House oversight committee.

Lawmakers are expected to grill Mr Toyoda on when Toyota first learnt of safety problems related to sudden acceleration in its vehicles and on why it did not alert US regulators even though Toyota had “clear evidence” the issue was of concern in Europe. He will also face questions on whether Toyota hired former safety regulators in order to narrow the scope of investigations into the company, congressional staff said.

In a hearing on Tuesday before the House energy and commerce committee, Jim Lentz, head of the carmaker’s US marketing arm, said the company’s recall may “not totally” solve the problem of unintended accelerations. Mr Lentz also blamed the overwhelming influence of Toyota’s headquarters in Japan for causing the current crisis, admitting that the company did a poor job of communicating.

Lawmakers also pointed a finger at US safety regulators at the National Highway Traffic Safety Administration. “Carmakers have entered the electronics era, but the NHTSA seems stuck in a mechanical mindset,” said Henry Waxman, the Democratic chairman of the energy committee.

Staff on the committee said there was “ample evidence” of problems related to sudden acceleration before the fall of 2008, but that safety investigators often performed “cursory investigations” into the issue.

In light of the alleged failures, lawmakers also raised the prospect on Tuesday of legislation to tighten safety rules. Bart Stupak, a Democratic committee member, said Toyota’s problems called into question whether a 2000 law is still adequate.

Ray LaHood, the US transportation secretary, did not acknowledge faults by his department. Instead, he said the NHTSA had “pushed Toyota to take corrective action” at “every step of the way”.

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