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Toyota faced pressure from U.S. officials before announcing recall

By Peter Whoriskey
Washington Post Staff Writer
Thursday, January 28, 2010; A19

Toyota's decision on Tuesday to suspend the production and sale of eight models follows months of wrangling with federal safety officials, and stark disagreements with them over what was causing unintended accelerations.

As recently as November, the company claimed that the acceleration problem was caused by faulty floor mats, a diagnosis that made for a simple solution: take them out.

The issue "has been repeatedly and thoroughly investigated" by federal regulators at the National Highway Transportation Safety Administration, Bob Daly, a Toyota senior vice president assured customers at the time.

But two days later, the agency issued an unusual statement seeking to correct "inaccurate and misleading information put out by Toyota." Removing floor mats doesn't fix the underlying vehicle defect, it said, adding that it is related to the accelerator and floor pan design.

This back-and-forth, followed by new accidents and then this week's admission that indeed some Toyota models have defective accelerator pedals, amounts to a debacle for a company that became one of the largest automakers by burnishing its reputation for safety and reliability.

On Wednesday, customers deluged dealerships with questions, some rental companies announced that they were dumping all Toyotas and competitors advertised that they would seek to scoop up their rival's newly disaffected customers.

General Motors announced that its dealers will offer purchase incentives specifically to Toyota customers. It will offer $1,000 to Toyota owners toward a down payment on a GM vehicle and up to $1,000 to help to pay off current leases early.

"We decided to make this offer after receiving many e-mails and calls from our dealers, who have been approached by Toyota customers asking for help," a GM spokesman said.

Avis Budget Group said Wednesday that it is removing about 20,000 Toyotas from its rental fleets. Enterprise Holdings also said it is removing all Toyota and Pontiac Vibe vehicles, which are part of the recall, from its Alamo, Enterprise and National car rental chains.

The wave of negative publicity that is engulfing the company is at least partly caused by the carmaker's reluctance to own up to the allegations customers had made, industry observers said.

"First, they blamed the messenger -- the drivers, then they blamed the media for blowing it out of proportion, and then they weren't very forthcoming," said Michelle Krebs, an auto analyst at Edmunds.com. "They keep digging and digging and finding more problems. The question is: Have they found them all yet?"

For instance, the company had issued a safety advisory in September warning customers of the potential floor-mat problem, but it insisted in a letter to federal officials that it had not determined that the problem was actually a "safety-related defect."

Similarly, while the company said its decision to conduct another recall was voluntary, the announcement came after the safety agency informed Toyota of its intention to open an investigation, sources familiar with the matter said. The agency urged the company to "act quickly," one of the sources said, and it did so. The sources spoke on the condition of anonymity because the safety discussions were private.

"NHTSA informed Toyota of their obligations and they complied with the law," David Strickland, administrator of the National Highway Traffic Safety Administration said via e-mail. "Their decision to halt sales was legally and morally the right thing to do."

On Wednesday night, Toyota announced that it would reopen the floor-mat recall to add 1.1 million vehicles, bringing the total affected to 5.3 million.

"In rare instances, there is a possibility that certain accelerator pedal mechanisms may mechanically stick in a partially depressed position," the company said. "The condition is rare and does not occur suddenly."

The agency is advising Toyota customers that "if your vehicle is acting strangely, drive it to the nearest safe location, turn-off the engine and contact a Toyota dealer for assistance."

Exactly how Toyota could have found itself at the center of a storm over quality is a matter of debate, but some analysts attributed the company's difficulties to its desire to grow so quickly. Toyota has vied with General Motors to become the world's largest.

"When you are growing that fast, it is difficult to find enough talent to manage quality and standards," said Oliver Hazimeh, an auto industry consultant at PRTM in Michigan. "Toyota outpaced itself, and that's the root of the problem they're having now."

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