Toyota Bragged About Saving $100 Million by Delaying Recalls

According to new documents just recently shared with congressional investigators, Toyota officials claimed to have saved the automaker $100 million by successfully negotiating with the government on a limited recall of floor mats in some Toyota and Lexus vehicles. Translation: by delaying the investigation of defects and slowing down other industry requirements, Toyota was able to save a large sum of money.

The automaker's greed, however, has come back to haunt them as an investigation into the company continues.

In an internal presentation in July 2009 at its Washington office, Toyota said it saved $100 million or more by negotiating an "equipment recall" of floor mats involving 55,000 Toyota Camry and Lexus ES350 vehicles in September 2007. The savings are listed under the title, "Wins for Toyota - Safety Group."

The document also cites millions of dollars in other savings realized by delaying safety regulations, avoiding defect investigations, and slowing down other industry requirements. It also appears to show that Toyota put profits ahead of consumer safety, and urged regulators to narrow the scope of recalls.

This week, two House committees are holding hearings on Toyota's recall of 8.5 million vehicles in the past few months that involve safety problems with gas pedals, floor mats, and brakes.

Toyota, the world's largest automaker, has been criticized for a slow response to consumer complaints of sudden acceleration in its vehicles.

The presentation clearly showed the benefits of delay. In the presentation, Toyota said that delaying a rule for tougher door locks saved the company $11 million, and that a phase-in to new safety rules for side air bags saved them $124 million and 50,000 man hours. Toyota also boasted that they "avoided investigation" on rusting Tacoma pickup trucks. Another section mentions how Toyota "negotiated 'equipment' recall on Camry/ES re SA; saved $100M+, w/no defect found."

Responding to reports about the internal presentation, Toyota issued a statement which read:

"Our first priority is the safety of our customers and to conclude otherwise on the basis of one internal presentation is wrong. Our values have always been to put the customer first and ensure the highest levels of safety and quality."

Transportation Department spokeswoman Olivia Alair said that the document was"very telling. And that's why Secretary (Ray) LaHood has been saying we're going to hold Toyota's feet to the fire and make sure they do what's necessary to make their cars safe for the driving public."

Comments

Bragged to whom?
Seems hardly fair to say a company "bragged" when it was an internal memo in which a department chief highlights the successes of the previous year. If a company's tax department sends a memo upstairs about all the taxes their shrewd moves saved, should that be headlined as "Company X Bragged About Cheating the Government"? Besides, Toyota was not alone in delaying implementation of new safety regs, a move heartily supported by anti-regulatory types in Congress.

Toyota & Honda dropped the ball on handling the recalls , they should have came forward with a full disclosure. Instead of waiting for a huge media blitz and tons of public pressure. But Toyota & Honda are not alone , I never seen so many car companies having recalls all at the same time. I had no idea my car which is not even a Toyota or Honda, was affected until I searched on http://www.carpedalrecall.com and found I had a bad Anti Lock control unit on my 2008 Pontiac G8 , So be careful check daily, it seems more and more cars are being recalled .

First of all, I do think they did brag. Can you hold the whole company responsible for the attitude of the head of one of their departments? Legally and by itself, no. But when we take into account the whole story, I think common sense tells otherwise. Besides, one usually brags in front of people we think will share the same values, and I believe the head of a department knows pretty well the priorities of his superiors. That's what's really scary.
Secondly, I'm perplex by seeing that apparently the fact that Toyota is not alone in these practices serves as some kind of an excuse. These are not only crimes, these are crimes payed with the lives of others. If Toyota is not alone (and I do know to a certain point this is the case, unfortunately) ,then the whole industry calls for more strict regulations on the subject of safety measures and quality control.
John Trent
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That's quite a bad doings if it was true. It is not really good that Toyota has put personal interest first before the safety of their consumers. I think that the government should also put a quality assurance team to inspect the factories of Toyota whether if they meet the safety standards of the factory, car and it's parts such as previous issue like braking, accelerator or even other crucial parts such as motor mounts and engine before it would be release in the market. On top of that, the government should file an order to Toyota making them pay or compensate for the consumer who were affected of the recalls.

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nice article!

I don't think Toyota has the rights to brag about because they have made so many recalls on their car including certain models of Lexus which is really quite an inconvenience for the consumers. Instead of bragging, they should spend that savings in increasing the technology in order to prevent furthermore defects on their cars.

Well,its useful and informative article, but if a customer wants to buy Second hand Toyota cars from Japanese used car exporter ,then help me in this regard.

I don't get it why Toyota has still the guts to brag about their savings. I think this is really inappropriate because they have made so many recalls on their line-up of cars which cause many accidents. What I think they should focus on is to plan to use this savings on improving the quality parts of their cars such as the engine, mats, braking system, accelerator, knock sensor and much more in order to avoid any more defects, I've bet if they do that, they would regain back the high reputation and image they have before those recalls.

Seriously, even though Toyota means lots of jobs to Americans, the Governement should not be lax with foreign auto manufacturers especially considering how much tax payer money has gone out to save GM and Chrysler. I am not saying US mfcs should be allowed to cut corners, but imports should be held to more a stringent approval processes, (reverse email lookup) compared what they are now, to prevent cheap crap from flooding our market, with less accountability.

I want to add one thing that America used cars export are now growing rapidly with the passage of time,as people from all over the world like to import second hand cars from American used car exporter.

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