Toyota saved $100 million by persuading U.S. regulators to agree to a cheap fix

Article by Christian A., on August 25, 2010

As Toyota President Akio Toyoda is headed to a congressional hearing to give his testimony on the series of recalls the company has been deluged with, he faces another setback. A document had emerged stating that Toyota Motor Corp. saved money by agreeing to a cheap fix for the defect.

This document says that Toyota saved over $100 million by convincing US regulators to conclude a 2007 investigation of unintended acceleration complaints with a floor mat recall.

The 2009 internal document given to lawmakers and made available Sunday is proof of Toyota's Washington staff's announcement of the amount of savings it had gotten due to the move.

Toyota had stated last Sunday that it was conducting a thorough review of its operations. It said that its first priority remains to be the safety of its customers and that it would be a mistake to base one's judgment on this single document.

Spokeswoman Olivia Alair of the Department of Transportation said in an e-mail that the document put to light the carmaker's slow response to its safety issues. She further described the document to be "very telling."

The document appears to add credence to criticism that Toyota missed or ignored complaints about sudden acceleration in its vehicles and that U.S. safety regulators weren't tough enough. This development seriously dents Toyoda's efforts to contain this safety crisis.

In the past few months, Toyota has issued the recall of more than 8.5 million cars for various problems, including: sticky accelerators, accelerators that can be pinned down by loose floor mats and a braking glitch affecting hybrid models. Deaths associated with this recall include five linked to floor mats and 29 related to unintended acceleration.

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