More Evidence of Toyota's Culpability: Exec Memos Debated When to Disclose

 

In the continuing saga regarding Toyota's runaway acceleration recall, an executive email written in January, just before the first massive recall, was just disclosed, urging fellow decision makers to "not mention about the mechanical failures." At least one person objected to this suggestion, and pleaded with them to "come clean." The prevailing email declared that "The time to hide on this one is over." Thankfully the company did "come clean" five days later, and initiated the first recall.


For more, take a look at the L.A. Times article on the matter here. 

FMCSA Requirement for Trucking "Black Box" Recorders Will Save Lives

This past Friday, April 2, 2010, the Federal Motor Carrier Safety Administration announced a new rule requiring trucking and busing companies with frequent hours of service violations to install "black box" data recorders, similar to airplane data recorders, in their vehicles starting June 1, 2012. These devices, called electronic on-board recorders (EOBRs), will automatically record the number of hours a driver spends operating the vehicle.

Only companies with a "pattern of hours-of-service violations" will be subject to the rule. This translates to "10 percent or more HOS (hours-of-service) violations during a compliance review." Thus, companies which have maintained a record of steadfast compliance will not be required to install these recorders. In the words of Transportation Secretary Ray LaHood, "We are committed to cracking down on carriers and drivers who put people on our roads and highways at risk." This rule has the potential to significantly cut down the number of tired drivers on the highways, and the associated fatalities.

You can read the FMCSA press release here:
http://www.fmcsa.dot.gov/about/news/news-releases/2010/Electronic-On-Board-Recorders-for-Truck-and-Bus-Companies.aspx

NHTSA Seeking Maximum Civil Penalties Against Toyota

In an announcement dated April 5 from Transportation Secretary Ray LaHood through the news arm of the National Highway Traffic Safety Administration (NHTSA), the announcement was made that NHTSA will be seeking the maximum civil penalties of $16.375 million against Toyota. The penalty stems from Toyota failing to notify NHTSA for at least four months of the dangerous sticky pedals that have led to a number of automobile accidents. This would be the largest penalty ever accessed by NHTSA against any auto maker.

For the full article click here.

Litigation Strategies Discussed for Toyota Recall Lawsuits

A recent  Los Angeles Times article examined the beginning of Toyota's legal troubles. Many Toyota drivers are upset over the numerous recent recalls. Those drivers are contacting lawyers. Lawyers, in turn, are starting to form strategies to pursue legal action against Toyota. Here is a portion of the article:

"First came the reports of sudden acceleration, then the recalls. And now, inevitably, the lawyers. Lots of them.

With Toyota Motor Corp. already facing scores of lawsuits stemming from alleged sudden acceleration incidents, about 150 lawyers gathered Wednesday for an all-day event to discuss litigation strategy over claims of deaths and injuries in accidents as well as the loss of resale value of used Toyota vehicles."

These actions against Toyota are just warming up, and will likely continue for years to come.

Is This a Joke?

Toyota's most recent recall is purportedly for two (that's right 2) Toyota Tundra four-wheel-drive pickup trucks. Here is the story from Autoblog:

"The troubles keep mounting for Toyota as the company announced that the number of Toyota, Lexus and Scion vehicles that have been recalled will be going up by two. No, not two million... just two. That means the company has now recalled 8,500,002 vehicles in the past several months. This most recent recall involves a pair of four-wheel-drive Toyota Tundra pickups that may have an improperly welded front propeller shaft.

No word on whether or not these two are also covered by the frame rust issue, but the weld at the point where the propeller shaft and yoke meet could separate, and if the shaft made contact with the ground while in motion, the Tundra could contend for the gold in pole vaulting at the 2012 London Olympics. If nothing else, Toyota might nab a spot in the Guinness Book of World Records for the largest and smallest recalls announced in a given year with this tiny callback."

Seriously? Sounds like a publicity stunt to me, 'in today's headlines, Toyota is so careful that it recalls two vehicles.' But hey, its working, you're reading about it, and I'm blogging about it.

Toyota Knew of Sliding Floor-Mats in 2003

According to an investigation by CBC, Toyota knew of the sliding floor-mat issue, the root of the recent mass recall, back in 2003. Here is an excerpt from their report:

"Toyota recalled cars in 2003 because of fears sliding floor mats would jam the accelerator pedal — almost seven years before a similar large-scale recall, a CBC News analysis shows.

Critics in Canada and the United States say the 2003 recall shows that sliding floor mats in Toyota vehicles have been a problem for some time and that the company should have been more vigilant.

In 2003, Toyota recalled 400 Celicas because of the 'potential' danger caused by the mats, an analysis of 12 years of Transport Canada vehicle recall data found.

The warning read in part: 'On certain Panasonic Edition vehicles, the driver's floor mat may slide along the interior floor carpet when pressure is applied to the mat by getting in or out of the vehicle. As a result the floor mat may come in contact and interfere with the accelerator pedal.'

Owners of the Celica were urged to have their dealer install new floor mats and clips to keep the carpets in place.

In 2009, drivers of Toyota models including the 2009 and 2010 Rav4 and Matrix were informed that 'on certain vehicles, if the specifically designed all-weather floor mat for that vehicle is not secured by the retaining clip or placed on top of an existing mat, the mat could move forward and may interfere with the accelerator pedal.'

The company urged owners to contact their dealer."

Toyota Shareholders Suing Alleging That Toyota Misled Them

Toyota shareholders are clearly upset with how the company handled recalls and disclosing problems to the shareholders and the public. They are upset enough that they are filing suit. According to the Detroit News:

"At least three class-action lawsuits alleging securities violations have been filed against the Japanese automaker in recent weeks. One suit, filed by the law firm Murray, Frank & Sailer in U.S. District Court in California-- is on behalf of shareholders who purchased stock between Dec. 22, 2009 and Feb. 2, 2010.

The suit charges that Toyota issued 'materially false and misleading statements' regarding Toyota's operations, business, and outlook.

Toyota 'failed to disclose ongoing safety issues and quality control problems with Toyota's automobiles, especially the fact that accelerator pedals installed in many of Toyota's cars were defective and could become stuck in the depressed position, leading to unintended acceleration,' says the suit.

Toyota won't comment on any of the suits because they are pending. Toyota's market capitalization has fallen by 12 percent-- or $15 billion-- since the company's stock hit $90.42 on Jan. 21-- the day Toyota announced it was recalling 2.3 million vehicles over sticky pedal concerns. Toyota's stock closed Friday at $79.56."

The full story is available here.