Toyota chief apologizes for global recalls

  • Business
  • Saturday, 06 Feb 2010

TOKYO: Toyota's president emerged from seclusion to apologize and address criticism that the automaker mishandled a crisis over sticking gas pedals.

Yet he stopped short of ordering a recall for the company's iconic Prius hybrid for braking problems.

Akio Toyoda, appointed to the top job at Toyota Motor Corp. last June, promised Friday to beef up quality control, saying, "We are facing a crisis." Toyoda, grandson of the company's founder, said he personally would head a special committee to review checks within the company, go over consumer complaints and listen to outside experts to come up with a fix.

"I apologize from the bottom of my heart for all the concern that we have given to so many customers," said Toyoda, speaking at his first news conference since the Jan. 21 global recall of 4.5 million vehicles.

Toyota's failure to stem its widening safety crisis has stunned consumers and experts who'd come to expect only streamlined efficiency from a company at the pinnacle of the global auto industry.

"Toyota needs to be more assertive in terms of providing consumers comfort that the immediate problem is being addressed ... and that it can deal with these crises," said Sherman Abe, a business professor at Hitotsubashi University in Tokyo.

It took prodding from the U.S. government for Toyota to recall the vehicles, about half of them in North America, for gas pedals that can stick and cause sudden acceleration.

Asked if he should have acted more quickly, Toyoda replied in hesitant English: "I will do my best."

Toyoda was the second successive Toyota president to offer an apology for defects in the company's cars.

The first, Katsuaki Watanabe, shocked a news conference in 2006, bowing low to the group before promising to improve quality.

Toyoda bowed as he greeted reporters, but not in apology.

He told the hastily called news conference that the company had not decided what to do about problems in the braking system of the Prius gas-electric hybrid.

The high-mileage, low-pollution car is a leader in its field and a symbol of Toyota technology

Toyoda and Shinichi Sasaki, who oversees quality control, offered no new explanations for the braking problem. Prius drivers in Japan and the U.S. have complained of a short delay before the brakes kick in - a flaw Toyota says can be fixed with a software programming change.

The lag occurs as the car is switching between brakes for the gas engine and the electric motor - a process that is key to the hybrid's increased mileage.

Toyota spokesman Mike Michels said Friday the company continues to weigh options on how to handle repair of the problem, and it is communicating with the National Highway Traffic Safety Administration.

Among the options are a service campaign in which Toyota would notify owners to bring their cars in for repairs, or a full-fledged safety recall.

Michels said he could not say when Toyota would make a decision.

The automaker said it fixed the programming glitch in Prius models that went on sale since last month, but has done nothing on 270,000 Prius cars sold last year in Japan and the U.S.

The lack of action has raised questions about whether there is a bigger problem. Sasaki denied any cover up.

"We have nothing to hide. We have just been investigating," he said.

Sasaki said complaints were climbing by the day.

The company was checking into them, one by one, and test-driving customer's cars that had developed problems, he said.

But he appeared to view the problem as minor, occurring only at slow speeds. "We don't see it as critical because if you push on it a bit, then the car will stop," he said of the brake pedal.

Jeff Kingston, director of Asian Studies at Temple University in Tokyo, said Toyota may be trying to avoid the large costs involved with a recall.

The automaker has already said repairs for the gas pedal recall and lost sales will cost it $2 billion.

"Toyota is saying ... there is no real problem yet also announced they fixed the problem as of January," he said.

"Odd, given that there is no problem to fix."

There is also high-level government concern in Japan about Toyota's quality fiasco. Transport Minister Seiji Maehara, who oversees auto regulation, has urged Toyota to consider a recall for the brake problem.

In the past, the world's No. 1 automaker has moved quickly to address problems and the handling of its most recent problems has experts puzzled.

"There's a sharp contrast with previous times in terms of handling these kinds of situations," said Koji Endo, managing director of Advanced Research Japan.

"I really don't know why - if it was the change in management or if the PR office was responsible or what."

Some experts speculated a degree of arrogance or corporate insularity may have clouded the company's judgment this time around.

"Toyota is the top of the totem pole," said Kenneth Grossberg, a marketing professor at Waseda University in Tokyo.

"They don't have to learn from anyone else." Grossberg noted that Japanese companies "have a problem with rapid decision making."

"Until they get everyone to sign on, it takes forever," said Grossberg, who has spent 16 years in Japan, including several years as a Citibank executive.

Toyoda said the company was cooperating with the U.S. investigation into the Prius problems and moving as quickly as it could to repair the gas pedals on a wide-range of models.

The National Highway Traffic Safety Administration's safety database includes several hundred complaints from 2010 Prius drivers.

Most of the reports, which date back to May 2009, detail problems with brakes that are slow to respond or sudden lurches of acceleration when the vehicle goes over potholes or other rough spots in the road.

"This is asking for accidents to happen and something must be done to fix this problem," wrote one driver, who described four cases of loss of braking power and acceleration on bumps. All the complaints in the database are anonymous.

Sasaki told the news conference he was grateful that U.S. Transportation Secretary Ray LaHood had pressed Toyota to go ahead quickly with the gas pedal recalls in the U.S.

Toyota did not have a fix for the problem at the time, and did not come out with one for more than a week, further frustrating customers. It also suspended sales and production on eight models in the U.S.

"It would have become even harder to win back the trust of customers, and the damage to the Toyota brand would have been greater," Sasaki said solemnly.

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