Toyota Chief Agrees to Testify Before Congress

Originally Posted in the Associated Press on February 18, 2010.

Toyota president Akio Toyoda said Thursday he will testify at a congressional hearing next week about the automaker’s massive recalls in the United States, meeting face to face with lawmakers after enduring criticism that he responded too slowly to the company’s safety crisis.

Toyoda, the grandson of the Japanese automaker’s founder, said in a statement he looks “forward to speaking directly with Congress and the American people.”

The auto executive accepted the invitation from the chairman of the House Oversight and Government Reform Committee as the government opened a fresh investigation into Corolla compacts over potential steering problems. Toyota has faced a burgeoning safety crisis over the past four months with the recall of roughly 8.5 million vehicles over questions involving gas pedals, accelerators getting jammed in floor mats and brakes on various vehicles.

Rep. Edolphus Towns, D-N.Y., told Toyoda in his invitation that motorists were “unsure as to what exactly the problem is, whether it is safe to drive their cars, or what they should do about it.” Towns and the committee’s top Republican, Rep. Darrell Issa of California, said later that Toyoda’s testimony “will be helpful in understanding the actions Toyota is taking to ensure the safety of American drivers.”

Towns said late Thursday that Toyoda would be joined by Yoshimi Inaba, chairman and chief executive of Toyota Motor North America, and Jim Lentz, president of Toyota Motor Sales USA.

Toyoda had said previously that he did not plan to attend a series of hearings scheduled to start on Capitol Hill next week. But he had told reporters in Japan earlier that he would consider appearing if invited.

The decision to testify came as the Transportation Department formally opened a preliminary investigation into 487,000 Toyota Corolla and Corolla Matrix compacts from the 2009-2010 model years over concerns about steering problems at highway speeds. The government has received 168 complaints and reports of 11 injuries and eight crashes on the Corolla and Matrix compacts with electric power steering.

The Corolla investigation was expected after Toyota said it was looking into complaints of power steering difficulties with the vehicle and considering a recall as one option.

Reports of deaths in the U.S. connected to sudden acceleration in Toyota vehicles have surged in recent weeks, with the toll of deaths allegedly attributed to the problem reaching 34 since 2000, according to new consumer data gathered by the government.

Toyoda is the latest embattled auto executive to testify before Congress, more than a year after the leaders of General Motors, Chrysler and Ford sought support for the U.S. auto industry and were scolded for traveling to the hearings in private jets. About a decade ago, the leaders of Ford and tire maker Bridgestone/Firestone were grilled by Congress after crashes involving exploding tires led to more than 250 traffic deaths.

By issuing the invitation, the committee had essentially forced Toyoda to testify or face a subpoena. Issa had urged Toyoda to meet with lawmakers and said if necessary, the committee should compel the executive’s testimony.

Bill George, professor of management practice at Harvard Business School and a former chairman and chief executive of Medtronic, said Toyoda was “bowing to the pressure” by testifying and had made a “grievous error in ducking public acknowledgment of the mistakes.”

George said Toyoda needed to offer “a sincere apology and a concrete set of corrective actions, not ducking and weaving and saying this is not a problem.”

In Japan and in the United States, Toyota Motor Corp. has been criticized for a tepid response to the recalls and the company’s top executive has been accused of being largely invisible as the recalls escalated. But he has held three news conferences in recent weeks, apologized repeatedly for the recalls and promised reforms.

Toyota has said it will create an outside review of company operations, do a better job of responding to customer complaints and improve communication with federal officials. Toyoda has said he plans to travel to the U.S. soon to meet with workers and dealers but the company has not yet released his schedule.

Jeffrey Sonnenfeld, senior associate dean at the Yale School of Management, said Toyoda’s testimony would give the company a prime opportunity to take responsibility for the problems. “He has to be extremely well-prepared to take responsibility. He should take the full force of the most hostile criticisms he gets and welcome them,” Sonnenfeld said.

Congressional investigators and the Transportation Department have demanded documents related to the Toyota recalls, seeking information on how long the automaker knew of safety defects before taking action.

Toyota has provided about 50,000 pages of documents to congressional investigators and continuing to answer questions from staff members, said Josephine Cooper, Toyota’s group vice president for public policy and government and industry affairs. Cooper said technicians from a Toyota training center in Maryland have been demonstrating to House aides the company’s fix for floor mat entrapment and sticky accelerator pedals.

In a separate move, the Oversight Committee subpoenaed Toyota documents from Dimitrios Biller, a former counsel for Toyota’s U.S. operations from 2003-2007. The committee said it was seeking documents related to motor vehicle safety, the company’s handling of defects and related litigation.

Toyota faces questions from three committees in Congress. The House Energy and Commerce Committee moved its scheduled hearing up to Feb. 23, one day ahead of the Oversight Committee meeting. The energy panel has invited Lentz and David Strickland, the head of the National Highway Traffic Safety Administration, to testify. A Senate hearing, chaired by West Virginia Sen. Jay Rockefeller, is planned for March 2.

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