Toyota document puts price-tag on safety savings
Toyota, the world’s largest automaker, certainly knows how to trim costs and pare wasteful spending to a bare minimum. While normally an admirable corporate attribute, a recently revealed internal document proves the Japanese auto giant prided itself on being able to wiggle its way out of expensive safety-related recalls. A report in The New York Times finds that Toyota boasted of saving upwards of $100 million by delaying or negotiating its way out of recalling large amounts of vehicles.
Toyota estimated that it saved $100 million by negotiating with regulators for a limited recall of 2007 Toyota Camry and Lexus ES models for sudden acceleration, the same problem that has since prompted it to recall millions of cars, documents turned over to a Congressional committee showed Sunday
The estimate was in a confidential presentation from July 2009 listing legislative and regulatory “wins” for the company. The presentation was among thousands of pages of documents provided as a result of subpoenas by the House Committee on Oversight and Government Reform, one of three panels holding hearings in the next two weeks on Toyota’s safety problems.
The document could not come at a worse time for Toyota executives, who later this week will have to answer to Congress as to why the company seemingly dragged its feet on a number of a complaints regarding vehicles suddenly accelerating or failing to slow down.
Toyota finally attributed the problem to poorly designed floor mats, and a faulty pedal mechanism. Nearly 9 million vehicles are now part of two massive recalls. However, questions remain as to whether the problem might be related to the company’s electronic throttle control system (rather than floor mats or pedal assemblies).