Toyota’s chief to testify to U.S. congress on recalls

Friday, February 19, 2010 - 11:46am

Feb. 19 - Toyota Motor Corp. President Akio Toyoda will testify at a U.S. congressional hearing on the automaker’s record recalls, after an initial decision to send another executive raised criticism of his handling of the crisis.

Toyoda will appear Feb. 24, after accepting an invitation from Representative Edolphus Towns, a New York Democrat, the company said in statement. North American President Yoshimi Inaba had been scheduled to testify instead of Toyoda.

“This is a PR mess on a scale Toyota has never had in its history, and certainly the more you have the person at the top responding, the better,” said Ed Kim, an industry analyst at AutoPacific Inc. in Tustin, California. “A lot of the moves Toyota has made up to now seem erratic and confused because they’ve never had to deal with anything like this before.”

Toyoda appeared in public today for the fourth time in two weeks in Japan as he goes on a PR offensive to counter criticism he avoided the press when the company first announced recalls. The world’s biggest carmaker is fixing more than 8 million vehicles globally for problems including unintended acceleration, and faces an investigation on a possible steering flaw on its Corolla sedan, the world’s top-selling car.

“I will willingly accept criticism of our handling” of the recalls, Toyoda told reporters today in Nagoya after accepting the invitation to testify. “I would like to promote understanding of our feelings toward customers and toward the U.S.”

Market Value

Toyota City, Japan-based Toyota, the world’s largest automaker, has lost more than $31 billion in market value since announcing fixes for accelerator-pedal defects on Jan. 21. It announced a recall of 437,000 hybrids, including the Prius, on Feb. 9.

“He’s doing what he should have done from the beginning,” said Jon Harmon, a Chicago-based corporate crisis consultant and former spokesman for Ford Motor Co. and Navistar International. “It’s a necessary first step for him to come to Washington, but there are a lot of questions to be answered.” Harmon is also author of “Feeding Frenzy: Inside the Ford-Firestone Crisis.”

Japan’s Transport Minister Seiji Maehara said today he would “urge Toyota to take appropriate action” on the U.S. recalls. Foreign Minister Katsuya Okada said the problems aren’t limited to one company.

“This is an issue for Japan as a whole,” Okada told reporters in Tokyo. “There may be an effect on trust in Japanese technology and products.”

‘Pleased’ With Toyoda

Towns, the oversight committee’s chairman, and Representative Darrell Issa, the panel’s senior Republican, said in a statement they are “pleased Mr. Toyoda accepted the invitation to testify before the committee. We believe his testimony will be helpful in understanding the actions Toyota is taking to ensure the safety of American drivers.”

Toyota’s U.S. sales unit president Jim Lentz is scheduled to appear at the first House of Representatives hearing on the Japanese automaker’s recalls, a Feb. 23 meeting of the House Energy and Commerce Committee.

Cindy Knight, a spokeswoman for Toyota based in Washington, said she wasn’t immediately aware of any change in plan for Inaba to also attend the Feb. 24 hearing.

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