Toyota's safety concerns deepen

Barrie McKenna

Toyota Motor Corp. is battling a deepening global crisis of confidence amid spreading safety concerns and suggestions that its millions of recalled cars should be yanked off the road.

The Japanese auto maker's litany of woes now includes complaints about faulty brakes on the hot-selling Prius, plus a spate of lawsuits alleging that the company's proposed gas-pedal fix on 2.3 million recalled vehicles won't solve possible flaws in its electronic throttle system. The U.S. government, meanwhile, continues to turn up the heat on the company.

Toyota's mounting problems mark a major setback for the company's efforts to contain damage to its reputation from the massive recall. Earlier this week, the company launched a public-relations campaign to assure customers that it is taking the steps needed to fix accelerator problems in a host of popular models.

The growing uncertainty hanging over Toyota helped send its shares tumbling nearly 6 per cent Wednesday, down $4.69 to $73.49.

The car maker is facing an increasingly hostile reaction from U.S. authorities. U.S. Transportation Secretary Ray LaHood urged drivers to park the recalled vehicles until a potential acceleration problem can be fixed – only to retract the statement minutes later.

“My advice is if anyone owns one of these vehicles is stop driving it and take it to a Toyota dealer because they believe they have a fix for it,” Mr. LaHood told a U.S. Congressional subcommittee hearing in Washington.

Mr. LaHood said later it was an “obvious misstatement” to suggest idling the massive Toyota fleet. Instead, worried drivers should immediately see a Toyota dealer, he suggested.

But Mr. LaHood wasn't backing off on his increasingly stern criticism of the Japanese auto maker, demanding a direct meeting with Toyota chief executive Akio Toyoda and vowing to investigate new concerns about possible problems with its electronic throttles.

“This is very serious,” he said. “We're going to keep the pressure on.”

The tough anti-Toyota talk is raising awkward questions about potential conflicts of interest for the Obama administration. The U.S. government is part owner of two U.S. auto makers that stand to gain if buyers shun Toyota – General Motors and Chrysler. Washington owns 60.8 per cent of GM and 10 per cent of Chrysler.

Peter Morici, a University of Maryland business professor and auto industry expert, said it's difficult to “divine ulterior motives” in Mr. LaHood's retracted warning. But Prof. Morici said he doesn't blame the Obama administration for putting Toyota owners on alert.

“You can't fault LaHood for telling people not to drive a vehicle that could run away from them, hurting them or others,” Prof. Morici said.

And he acknowledged that Toyota's pain is GM's gain because it has the capacity to sell more cars.

In Japan, some commentators have suggested the U.S. administration's harsh criticism of Toyota may be rooted in growing trade tensions and a desire to bolster ailing Detroit auto makers.

Whatever the case, auto industry analysts said Mr. LaHood's dire warning has needlessly confused car owners and fanned uncertainty.

“This flip-flop is not helping concerned motorists who are being presented with confusing and contradictory information about the Toyota recall at every turn,” said Jeremy Anwyl, chief executive of the online car buyers site Edmunds.com.

Toyota, which has built its reputation on making durable and reliable vehicles, thought it had overcome the safety issue by ordering a massive recall on Monday. The company said it would fix the defect by having dealers install shims in accelerators. In December, it ordered a recall of floor mats that it identified as the cause of sticking accelerators.

Toyota Canada Inc. said the steel reinforcing bars designed to fix potentially sticky accelerator pedals were shipped to the auto maker's 243 dealers beginning Wednesday.

But now, Toyota is facing more uncertainty than ever. At least seven lawsuits allege problems with the electronic throttle system.

And a key U.S. lawmaker accused Toyota of not coming clean on why some of its cars apparently run away at uncontrollable speeds. The company has publicly suggested the problem is floor mats and sticking gas pedals. But House energy and commerce committee chairman Henry Waxman said Toyota officials have told his panel privately that accelerator pedals are unlikely to be responsible for the sensational stories of drivers losing control over acceleration as their cars race to 100 kilometres per hour or more.

The U.S. Department of Transportation revealed that it's investigating more than 100 complaints in the United States and Japan about brake problems with the popular Prius gas-electric hybrid, which is not part of the original recall.

The initial recall affected the RAV4, Matrix, Camry, Highlander, Tundra, Sequoia and Corolla.

Canada's Industry Minister Tony Clement urged Toyota to continue keeping Canadians up to date on how it intends to deal with ongoing safety concerns.

“I think it behooves Toyota to continue to give consumers on both sides of the border as much information as possible and to come forward with the action plan that will fix the problem as soon as possible,” Mr. Clement told reporters.

“To the extent that they are doing that, I approve of that, and I wish them a speedy recovery of the issues that are afflicting them right now.”

With a report from Greg Keenan