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Toyota memo raises stakes for Washington hearings

autos Updated: Feb 22, 2010 08:19 IST
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New documents raised fresh questions about whether Toyota Motor Corp stalled a US regulatory response to red flags about its vehicle safety as the company prepares to defend itself at congressional hearings this week.

Toyota's President Akio Toyoda testifies before U.S. lawmakers this week in an effort to contain a safety crisis that threatens the reputation and continued success of the automaker in the market that made it a global powerhouse.

But a 2009 internal document turned over to lawmakers and made available on Sunday shows Toyota's Washington DC staff trumpeting savings of over $100 million by convincing regulators to end a 2007 investigation of sudden acceleration complaints with a relatively cheap floormat recall.

The document seems certain to add to the high-stakes debate about whether Toyota missed or ignored complaints about sudden acceleration in its vehicles and whether US safety regulators were tough enough.

In recent months, Toyota has recalled over 8.5 million vehicles globally for problems that include sticky accelerators, accelerators that can be pinned down by loose floormats and a braking glitch on its Prius hybrid.

Toyota's US sales plummeted 16 percent in January. Toyota has estimated those recalls will cost it $2 billion in the fiscal year ending March.

Toyota on Sunday reiterated that it was conducting a top-to-bottom review of all its operations.

"Our first priority is the safety of our customers and to conclude otherwise on the basis of one internal presentation is wrong," the company said.

But the US Department of Transportation said the document highlighted Toyota's slow response to the safety problems.

"Unfortunately, this document is very telling," said department spokeswoman Olivia Alair in an emailed statement.

The company has launched a publicity campaign to convince current and prospective customers that they are fixing the problems and acknowledge they let their standards slip during a period of fast growth.

More than 100 Toyota dealers, who are influential with Congress because of their impact on local economies, are planning to visit lawmakers in Washington on Tuesday.

Before an August 2009 crash that killed an off-duty California Highway Patrol officer and three others, Toyota had limited its action on sudden acceleration complaints to a recall of 55,000 floormats on the Camry and Lexus ES350.

The July 2009 document, appears to be a briefing for Toyota's North American chief Yoshi Inaba prepared by the automaker's Washington staff, and cites sudden acceleration as a "key" safety issue and warns that US regulators were taking a tougher line on forced recalls.

It goes on to credit Toyota's Washington safety group with having "negotiated (an) 'equipment' recall on Camry/ES," a step credited with saving over $100 million with no finding of a defect by the National Highway Traffic Safety Administration.