Toyota hearings: senators say carmaker put profit over safety

Call it a tale of two conspiracies.

For many US lawmakers, the heart of the Toyota self-accelerating car debacle is a decision by top Japanese officials to put profit ahead of safety. Meanwhile, in Japan and some US business editorial pages, there’s suspicion that the US recalls are all about rolling back Toyota’s market share.

“Safety took a second seat to profits,” said Sen. John (Jay) Rockefeller (D) of West Virginia, who chaired a day-long hearing Tuesday by the Senate Commerce, Science, and Transportation Committee on the Toyota recalls and the government’s response.

“In Japanese culture and Japanese corporations, things do not happen by chance, they happen by decision,” he added at the end of Tuesday’s hearing. (Senator Rockefeller spent three years in Japan as a university student and helped bring a Toyota plant to Buffalo, W.Va.)

Senators pressed three top Toyota officials on what the company knew and when they knew it – and when, senators allege, corporate priorities shifted from safety to profit.

“What I’m trying to understand is why was Toyota able to move so deftly, so quickly, and overcome the established auto industry that existed in this country,” asked Sen. Frank Lautenberg (D) of New Jersey. “They went from a 10 percent market share in 1999 to 13 percent of the market share in 2008. General Motors fell from 17 percent to 12 percent…. Ford fell from 13 percent to 8 percent in the same time.”

“Building a trust among the customers is the key to our past success and we would like to do the same into the future,” said Yoshimi Inaba, president and CEO of Toyota Motors North America. Toyota employs some 200,000 “team members” at plants, dealerships, and suppliers in the US, where it has had a presence for 50 years.

Last week, Toyota President Akio Toyoda, grandson of the founder, appeared before a House panel and took “full responsibility” for the failures that prompted the recalls of millions of Toyotas in the United States.

Toyota executive vice president Shinichi Sasaki, one of two top board members to appear before the Senate panel, said that Toyota is “fundamentally overhauling Toyota’s quality assurance process, under the personal direction of our president, Akio Toyoda.” He also said that Americans would have a greater role in quality assurance decisions, including recalls. (For Monitor coverage on the impact of the recalls on Toyota's sales, click here.)

Senators pressed for assurances that someone would be held accountable for errors of the past, especially the failure to respond to thousands of complaints from US Toyota owners since at least 2003 that brakes had no impact on suddenly surging Toyota vehicles. (For Monitor coverage of a report on sudden car acceleration, click here.)

US officials were also under the gun for failing to respond promptly to consumer complaints and aggressively investigate accident reports. In his opening statement, Secretary of Transportation Ray LaHood encouraged owners of recalled vehicles to remove floor mats and pay special attention to gas pedals.

“If your accelerator becomes stuck for any reason, steadily apply the brake, put the car in neutral, bring it to a stop in a safe place, and call your dealer," he said.

But senators pressed for answers to why the National Highway Traffic Safety Administration did not also investigate possible design flaws in Toyota’s electronic systems or electro-magnetic interference (EMI). “To date, we have not identified any particular crash or unsafe occurrence that can clearly be attributed to such a flaw,” Secretary LaHood told the panel.

In response, Rockefeller said that the committee staff had reviewed thousands of pages of NHTSA documentation that “fairly clearly shows that NHTSA employees are reluctant to do investigations of the vehicle’s electronics, because it’s much more difficult to detect.”

NHTSA investigators “would rather focus on floor mats than microchips, because they understand floor mats, they're more comfortable with floor mats. They don't understand microchips. You're going to change that, but this is what the situation has been,” he said.

At an impromptu press conference after the hearing, Japanese reporter Toshi Ogata, Washington correspondent for the Japanese daily Asahi Shimbun, asked Rockefeller to comment on widespread views in Japan that American lawmakers were conducting hearings to “break” Toyota. (For Monitor coverage on how the recalls are viewed in Japan, click here.)

“Don’t take one second of your time” on that view,” Rockefeller said.

But several Republican senators said that, with the US government now the majority shareholder in General Motors, it is understandable that such an issue would be raised. “It’s why the US government should never have an ownership stake in a private company – so that that question could never be asked,” said Sen. Bob Corker (R) of Tennessee.