Toyota faces US Federal Grand Jury

[Dr Mordrid]

First came the quality control issues, then the nightmare that is the series of recalls.

Then came the release of an internal document bragging about how they saved $100 million by lobbying for, and getting, a lower level recall for their 'troubles' in 2007.

Next came the broohaha over Mr. Toyoda appearing at Congressional hearings into the whole fiasco. First he was going to turn down the "invitation" then reconsidered. Trust me, he's in for a nightmare.

Now comes this: a Federal Grand Jury has subpoenaed the internal documents, and requested their presence, meaning prosecutors are investigating and charges are quite possible.

Time to grease up their collective anal sphincters

Wall Street Journal....

Toyota Receives Subpoena from U.S. Grand Jury

WASHINGTON—Toyota Motor Corp. said Monday it has received a subpoena from a U.S. federal grand jury requesting documents related to unintended acceleration of its vehicles and the braking system of its Prius hybrid, as the auto maker's safety woes continue to grow.

The company also said it has received a "voluntary request" and a subpoena from the Los Angeles office of the U.S. Securities and Exchange Commission for documents related to sudden unintended acceleration and the company's disclosure polices and practices. The Japanese auto maker said in a statement to the London Stock Exchange that it received the grand jury request on Feb. 9 and the SEC request on Feb. 19. Toyota said it intends to cooperate with the investigations and is preparing its responses.

A spokesman for Theodore Hester, a King & Spalding attorney who is representing Toyota at congressional hearings this week, said he declined comment. The firm doesn't comment on their client's issues as a matter of policy, according to the spokesman.

Since last July, Toyota has recalled more than 6.5 million vehicles in the U.S. to repair problems linked to possible unintended acceleration, and braking and steering issues. The U.S. Department of Transportation is investigating whether to seek civil penalties against the company for failing to comply with regulations governing safety recalls. Toyota officials including Chief Executive Akio Toyoda will testify before the U.S. Congress this week.

[cjolley]

There's something wrong with that first link.

[Dr Mordrid]

Fixed

[Wulfman]

I'll probably get flamed hard for saying that, but am I the only one getting a strong vibe of "our car industry is ****ed up, lets make the foreign competition look really bad to help our sales"?

don't get me wrong, I'm not suggesting that there is no reason for the recall or something, but the way this has played out seems a bit staged. afaik toyota is not the first company to recall cars - a quick look around on the net turned out the following quote:

In 2008 Ford announced its biggest recall ever - 9.6 million vehicles - due to an electrical fire hazard caused by faulty cruise control switches. However, Ford expanded the recall to include 4.5 additional vehicles in October 2009 for a grand total of 14.1 million vehicles.

plus I'm sure Ford also spent its fair share of money on the political system. but what do I know?

mfg
wulfman

[Dr Mordrid]

So you're saying the Obama administration is manipulating things in order to make their GM and Chrysler actions look good? Maybe kick-start US auto manufacturing as a favor to the UAW? Who would ever think they'd stoop to being that manipulative? I mean...they only have our best interests at heart, right?

Between you and me: I wouldn't put it past 'em. Watch out Honda and VW, you're next.

[Wulfman]

lessig once wrote a nice book about the topic, control in a society takes many forms - eg you can fine people if they don't use seatbelts, you can pay them to use them, you can use marketing to make them want to use them or you could just ban all cars without seatbelts.

if you apply the same ideas to cars: between special tariffs for imported cars, and making them unattractive by clever marketing there are still a few options left to explore. the cash4clunkers program would have fallen under the 2nd point, if somebody had put a clause for buying local products in - guess the recall came a little bit too late.

I wouldn't even say that they stooped low - from a governments/countries pov local jobs are a "best interest". international trade "wars" have been called just that for quite some time, and most likely every president has had his hands in tariff negotiations and quarrels with the WTO. if they just had raised customs rates, they would have been more open to attacks by international free trade regulations, I guess.

the japanese might have a different opinion on the topic, though.

mfg
wulfman

[Dr Mordrid]

They do indeed;

http://www.politico.com/news/stories/0210/33248.html#ixzz0gGvjs4j2

Toyota: Democrats 'not industry friendly'

Internal Toyota documents derided the Obama administration and Democratic Congress as “activist” and “not industry friendly," a revelation that comes days before the giant automaker's top executives testify on Capitol Hill amid a giant recall.

According to a presentation obtained under subpoena by the House Oversight and Government Relations committee, Toyota referred to the “changing political environment” as one of its main challenges and anticipated a "more challenging regulatory" environment under the Obama administration's purview.

This document, in addition to piles of other records, will be front and center this week as the Japanese automaker girds to face lawmakers hungry for answers about a recall that has the company teetering.

Upwards of 8 million cars have been recalled in the U.S. and worldwide, amid reports of Toyota's vehicles accelerating rapidly. The problems have turned political, as the company has shuttered some American factories, potentially resulting in layoffs.
>

http://online.wsj.com/article/SB1000...s_Most_Popular

Honda Finance Chief Warns of Toyota Fallout

Honda Motor Co.'s finance chief warned that Toyota Motor Corp.'s massive recall could have a ripple effect throughout the broader auto industry, denting consumers' faith in the quality and safety of vehicles.

In an interview, Honda Chief Financial Officer Yoichi Hojo also said the auto maker will ratchet up competition in the U.S. car market with increased incentives to draw down excess inventory of some models. At the same time, he stuck with the company's refusal to target incentives specifically to Toyota customers, despite similar moves by U.S. auto makers.
>
Mr. Hojo's comments illustrate the difficulties that Toyota's quality woes present to the rest of the industry. The world's No. 1 auto maker by sales volume is a fierce competitor with a strong presence in fuel-efficient vehicles such as its gasoline-electric Prius hybrid. The company has recalled 8.1 million vehicles for sudden-acceleration problems and will likely start a separate effort this week in Japan to fix braking problems on some Prius models, weakening its competitive edge.
>

[Wulfman]

and rightly so. out of curiosity, as I couldn't really interpret the irony a few postings earlier: is that a line of action by the government you support (in general, not with regard to Obama)?

mfg
wulfman

[Dr Mordrid]

I'm split on the bailouts. The auto bailouts saved a lot of jobs in manufacturing, most of which were in suppliers and not GM or Chrysler, but I find them totally out of line in the financial sector. The good assets should have been split among stable, well run companies like was done with the savings and loans and the shells of the failed ones let go.

That said, I think the auto bailouts were done poorly because a lot of the stockholders that lost nearly everything were individuals, universities, schools and retirement plans. That story is one not often told.

[Wulfman]

...and meddling with international trade? (by tariffs in general, and theoretically by covert political actions - not necessary happening with toyota now)

mfg
wulfman

[VJ]

I'll probably get flamed hard for saying that, but am I the only one getting a strong vibe of "our car industry is ****ed up, lets make the foreign competition look really bad to help our sales"?

I too have noticed a bit of "schadenfreude"...

[Dr Mordrid]

...and meddling with international trade? (by tariffs in general, and theoretically by covert political actions - not necessary happening with toyota now)

mfg
wulfman

I'm a free trader so tariffs are IMO not the best way to go, but the administration differs on that.

That said, however, some of our trading partners are even more protectionist than we can be.