Toyota Admitted Saving $100M On Recall
From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.
Toyota misled the public and the government did not adequately investigate. Those are just two of the preliminary findings of a House panel that's charged with looking into Toyota's recall of 8.5 million vehicles for sudden acceleration problems.
House members will hear this week from Toyota's president and from two other top executives. Meantime, lawmakers have been pouring over tens of thousands of company documents. David Shepardson of The Detroit News Washington bureau has gotten hold of some of those documents, and he joins us now. Welcome to the program.
Mr. DAVID SHEPARDSON (Journalist, The Detroit News): Thanks, Robert.
SIEGEL: You broke this story of an internal presentation at Toyota which referred to savings of $100 million for the company by limiting the size of a recall in 2007. What presentation was this?
Mr. SHEPARDSON: This was in July 2009 to the company's new head of North America, Yoshi Inaba, on his second day on the job in Washington. And it was the officials in Washington at the company bragging about examples of places they had saved the company money. And the most notable one was on sudden acceleration complaints.
This is an issue that's dogged the company for six or seven years. There now have been 2,600 complaints and allegations of 34 deaths. And they said they were able to convince the government to do a very small recall of just 55,000 floor mats, rather than an expensive mechanical fix that could've cost them, as they said, far more than $100 million.
SIEGEL: Sounds pretty damaging, that memo. Is it uniquely so among the documents that you've seen?
Mr. SHEPARDSON: I would say it's the most damaging memo that has come out so far because it raises a lot of questions. Did Toyota put dollars ahead of safety? And the company has not come up with a good explanation for why they put these terms so starkly.
SIEGEL: Some of the documents, I gather, are in Japanese. Are there translators working on thousands of Toyota documents right now?
Mr. SHEPARDSON: There are more than 20,000 documents in Japanese out of 75,000 pages that are still coming in. They're waiting for another 5,000 pages from a Toyota whistleblower lawyer. And, you know, this is not the end of the documents by any stretch of the imagination.
SIEGEL: Now, a federal grand jury in New York has issued a subpoena demanding Toyota turnover documents related to complaints of sudden acceleration. The Securities and Exchange Commission has also begun a probe. Is it possible that there are criminal charges ahead for Toyota? And if so, what law might they have broken?
Mr. SHEPARDSON: Well, back in 2000 when the Ford-Firestone crisis hit and there were over 300 deaths linked to, you know, Ford-Firestone tires, Congress passed the TREAD Act. And that made it a 15-year felony to knowingly lie to the Department of Transportation about a safety recall that led to a death. So that's most likely the issue they're looking at.
There's certainly no - we don't have any good sense of how far along the grand jury is. On the SEC side, we're talking about investors who have lost more than $20 billion since the company's stock has tanked over the last month because of all the recall problems.
SIEGEL: In investigations of this sort, I mean, the smoking gun or in some cases the smoking cigarette, is some company document which shows that on the inside people knew there was a very big problem, but they managed somehow to deny that on the outside. Have you seen something that clear?
Mr. SHEPARDSON: No, we're not there yet. All we know is that the company put a dollar value on making safety fixes and they opted way much less expensive, less broad fix. But we don't have any evidence yet where the company said we know we have to fix this, we know this is a problem, but we're not going to do it.
SIEGEL: They were analyzing the recall question as one of cost benefit analysis and a business decision.
Mr. SHEPARDSON: Right. And this is only one of many examples where they decided they could save money by doing something less than some in the government might have wanted them to do.
SIEGEL: David Shepardson, thanks for talking with us.
Mr. SHEPARDSON: Thanks, Robert.
SIEGEL: David Shephardson is a reporter with the Washington bureau of The Detroit News.
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