Sticky Pedals Accelerate Toyota's PR Campaign
LIANE HANSEN, host:
Toyota recalled millions of its vehicles in the U.S. and Europe last week to fix sticky gas pedals. The problem led to at least 19 fatalities and accidents over the last 10 years. Toyota says it's shipping new parts to factories and dealers to fix the problem. And while they've temporarily suspended sales in the U.S., they haven't suspended advertising. In fact, they've bought full-page ads in 20 major newspapers this morning.
John Neff is the editor-in-chief of AutoBlog.com. He joins us from member station WCPN in Cleveland, Ohio to talk about the week's auto news. Welcome to the program.
Mr. JOHN NEFF (Editor-in-Chief, AutoBlog.com): Hi. Thank you.
HANSEN: So, this situation with Toyota, how did this happen?
Mr. NEFF: Well, that's a really good question, Liane, and there's actually going to be two congressional hearings in February to try and get to those answers because no one really has the answer right now on how it came to be. There were reports of sudden acceleration in Toyota vehicles for a long time going back at least a few years.
And just late last year, Toyota acknowledged that it could be caused by floor mats, and there was a recall for over four million vehicles to fix their floor mats. And then as you mentioned, just last week, there was another recall for sticky accelerator pedals. So now we have two recalls that can both cause the same thing. And we don't know how we got there and we don't know how far we're going to go with it, but hopefully there'll be answers within the next month or so.
HANSEN: What will Congress be looking for during those hearings to learn more about this?
Mr. NEFF: Well, I think specifically they're going to want to know when Toyota first learned of these problems and if they had identified the cause of them. 'Cause right now we have reports of sudden acceleration in vehicles that aren't in either recall, which means that, you know, the scope of this may not be a known.
HANSEN: What kind of financial effect is this having on Toyota or will have?
Mr. NEFF: Well, it's already having a financial effect. In the last week or so, Toyota stock has gone down about 16.7 percent. And as you mentioned, when the last recall for the sticky gas pedals happened, Toyota suspended production of the eight models in the recall and instructed their dealers to stop selling those vehicles until a fix could be found and implemented. So, that's lost sales and lost production.
Aside from that, we just also found out that Consumer Reports temporarily yanked their recommendation for the eight Toyota models that are in the recall. As you know, Consumer Reports has huge influence over car buyers, so that's definitely going to hurt Toyota in the long run as well.
HANSEN: Have there been any layoffs? Are you hearing news of layoffs?
Mr. NEFF: We haven't heard any news of layoffs yet. You know, Toyota is a very big company and has been very successful in the last 20 years, so I think they have enough cash in the bank to kind of weather this out for a little while. Kind of all depends on how long this stretches out.
HANSEN: There was good automotive news this past week. Ford Motor Company essentially wowed everybody by announcing a $2.7 billion profit for 2009 and that's its first profit in four years. How did Ford manage to do that? And do you think it might happen again this year?
Mr. NEFF: Credit has to go to Ford's CEO Alan Mulally, who has kind of quietly and subtly positioned Ford in a good place and made very good decisions since he took the helm over there. You know, it comes down to developing good products and promoting them well, and Ford has done that.
Its Ford Fusion won the Motor Trend Car of the Year and also the North American International Car of the Year. So, they're out in front of people's faces with good products. And basically, you know, nothing has gone wrong for Ford in the past year or so and they're kind of riding a wave. And, yes, I think they'll definitely turn a profit again in 2010.
They have another new small car coming out called the Ford Fiesta. They're poised, if gas prices rise, to have a very good product in that segment that'll become popular.
HANSEN: Ford Fiesta, that's not a new line, is it?
Mr. NEFF: There was a Ford Fiesta a long time ago, and they've actually been selling the Ford Fiesta in Europe continually, and we're actually going to be getting the Ford Fiesta the Europeans have. So, we've kind of been waiting for some of Ford's really cool European cars to come over to the U.S. and that's going to be the first one that we share with European customers.
HANSEN: Finally, this week, General Motors reached a deal with Dutch sports carmaker Spyker. Spyker's going to buy Saab. Do you think Spyker will be able to turn Saab around and make it profitable? What sort of challenges does it face?
Mr. NEFF: Well, they have a huge uphill climb. Probably the biggest is that Spyker is a small company itself. It makes very high-end exotic super cars. So, it's overtaking another small niche company in Saab that's very intertwined with General Motors. So it's going to take three or four years for Spyker to kind of detach itself from General Motors and all of the parts and manufacturing that Saab relies on General Motors for.
The real question is: What happens when General Motors isn't there to supply all of the parts and the manufacturing that Saab has to have now to keep going?
HANSEN: And since it's literally about a block away from NPR headquarters, any exciting news coming out of the D.C. Auto Show this weekend?
Mr. NEFF: Well, you know, the D.C. Auto Show has kind of become the green auto show in the country. So, while there aren't many big concept cars that are debuted there or new vehicles, there's a lot of green news that happens. Probably the biggest piece of news is the Department of Energy secretary announcing that Nissan is getting a $1.4 billion loan to help it build an all-electric vehicle called the Leaf in its plant in Tennessee, which will also add 1,300 jobs to the region. So that's good news for people in that area and, also, this is going to be one of the first all-electric vehicles on the market.
HANSEN: John Neff is editor-in-chief of AutoBlog.com, and he joined us from member station WCPN in Cleveland. Thank you very much.
Mr. NEFF: Thank you, Liane.
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