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Toyota president issues rare apology as pressure mounts

Akio Toyoda announces a task force to improve quality, but bristles at suggestions that the automaker was trying to cover up problems and that he should have personally addressed the issue earlier.

February 06, 2010|By Jerry Hirsch and Coco Masters
  • Toyota President Akio Toyoda apologizes for "the inconvenience and concern" surrounding the safety investigations and recalls.
Toyota President Akio Toyoda apologizes for "the inconvenience… (Everett Kennedy Brown /…)

Reporting from Tokyo and Los Angeles — Seeking to quell the firestorm over Toyota's sudden-acceleration problems, the company's president issued a rare public apology Friday -- but one that analysts said was unlikely to deflect the increasing scrutiny of Toyota's actions.

Facing unusually aggressive Japanese reporters, Akio Toyoda said he was "deeply sorry about the inconvenience and concern caused to our customers and others." Toyoda, grandson of the company's founder, said the automaker had reached a "moment of crisis" and would form a global task force to improve quality.

The apology came as pressure mounted for Toyota to address complaints about the brakes on its Prius hybrid, and as Congress prepares for a hearing next week -- the first of two this month -- on whether the automaker has been forthcoming with safety problems.

"This clearly isn't going to get them out of the doghouse," said Kelly O'Keefe, a brand image expert at Virginia Commonwealth University. "They have a very significant challenge with their credibility that can't be glossed over with an announcement."

Already, the automaker faces several dozen U.S. lawsuits over a variety of issues, including liability for accidents, lower value of Toyota vehicles and the decline in the company's stock.

Toyota has recalled more than 9 million vehicles worldwide after reports of unintended acceleration, which the automaker has blamed on gas pedals that stick and on floor mats that can entrap the gas pedal.

But skeptics -- including Toyota owners and independent auto researchers -- believe the problem may also lie in electronic throttle systems.

On Friday, the auto consulting firm Safety Research and Strategies released a study that rejected the idea that a sticking pedal could cause runaway acceleration and recommended that "Toyota should immediately implement a brake-to-idle override on all affected models and model years."

The override uses software that returns the throttle to idle when the brake pedal and accelerator are depressed at the same time.

Such an override could prevent serious unintended-acceleration problems, the consulting firm said. Toyota has already indicated that it would install the upgrade on vehicles included in the floor mat recall and that it would make the override standard in all cars starting with the 2011 model year. Still, millions of existing Toyota cars would not receive the software under the automaker's plans.

Toyota spokesman Brian Lyons said the automaker's investigations of sudden-acceleration incidents had not turned up any links to an electronics problem.

Toyota stopped sales of eight models -- including its top-selling Camry and Corolla -- on Jan. 26, saying the gas pedals could get stuck and cause runaway acceleration. The automaker also shut down production of the vehicles for a week while it examined how to fix the problem, which it attributed to wear on the pedal system.

Sales resumed this week as dealers made fixes to cars on their lots, and factory assembly lines are set to restart Monday. Toyota said Thursday that the recall and the accompanying loss of sales would cost it $2 billion.

Toyoda spoke to reporters late Friday in Nagoya, Japan, amid Japanese news reports that Toyota would recall its Prius. A U.S. government investigation is looking into reports that the Prius sometimes loses braking power.

Toyoda made no announcement on a Prius recall but said he would head a new task force to review internal checks, analyze consumer complaints and get input from outside experts to address quality control.

He said the panel's goal is to "verify the causes" that led to the recall and "inspect quality of design, production, sales and service."

Japanese reporters noted that Toyoda's bows during his apology were not the deep bows expected when a corporate head wants to show contrition.

Toyoda, sitting with his executive vice president, Shinichi Sasaki, bristled at questions from reporters who suggested that the automaker was trying to cover up the problems and that Toyoda should have personally addressed the issue earlier. Until Friday, the public remarks about the recalls were made by other Toyota executives.

"I have not entrusted everything to other people," Toyoda said.

Jeremy Anwyl, chief executive of auto information company Edmunds.com in Santa Monica, noted that in Japan, "guilt and shame are very different things."

"He apologized for inconveniencing Toyota customers and causing them concern, but didn't actually deal with the issue of responsibility," Anwyl said. "In the U.S., for an apology to be sincere, the speaker must accept responsibility and express remorse."

Toyota shares rose 4% to $74.71 on Friday after having slipped 22% since the recalls were announced last month. But the company's brand value has been dented.

Kelley Blue Book has lowered its used-vehicle values on recalled Toyota models by 1% to 3%. Kelley warned that prices could fall as much as 5% more.

By not acting more forcefully and swiftly, Toyota keeps its problems "firmly in the public eye," said James Bell, a market analyst for Kelley. The recall has been overshadowed by Toyota's slow reaction, which "is leading all of us to wonder when this might end and just how much Toyota knows."

Shoppers still interested in Toyota's products might be able to use the company's troubles to their advantage.

Edmunds.com consumer advice editor Philip Reed suggested that Toyota shoppers now "can create leverage to get a lower price by expressing concern over the safety issue."

jerry.hirsch@latimes.com

Masters is a special correspondent. Times staff writers Jim Puzzanghera and Ken Bensinger contributed to this report.

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