Toyota Shifts Into High Gear

Auto Execs Steer Defense on Hill

Posted February 23, 2010 at 6:32pm

Toyota Motor Corp. will continue its Capitol Hill lobbying offensive today, when the Japanese automaker’s top executive is expected to face tough questioning from House investigators about faulty gas pedals that led to millions of recalled cars and trucks — and perhaps numerous driver deaths.

Toyota President Akio Toyoda, whose grandfather started the company in 1937, will testify

this morning before the House Oversight and Government Reform Committee. According to prepared testimony distributed Tuesday, Toyoda will apologize for malfunctioning accelerators in a dozen Toyota models, and he will blame the problem on the automaker’s rapid expansion in recent years.

Toyota recently surpassed General Motors Corp. as the world’s largest car company.

“We pursued growth over the speed at which we were able to develop our people and our organization, and we should sincerely be mindful of that,” Toyoda will tell the panel. “I regret that this has resulted in the safety issues described in the recalls we face today, and I am deeply sorry for any accidents that Toyota drivers have experienced.”

Toyoda’s blunt testimony today is a sharp contrast to the relatively low profile the company had kept on Capitol Hill. In 2009, the company spent $5.2 million on disclosable lobbying activities, while bankrupt GM spent more than $8 million.

The recall and Congressional investigations have put the company’s Washington, D.C., office, which is headed by Jo Cooper, in the spotlight. In addition to the in-house team she leads, Toyota is relying on K Street help from firms such as Brown Rudnick, Greenberg Traurig and the Glover Park Group. Sources familiar with Toyota’s lobbying effort say it has been traditional with various lobbyists dividing up Member offices and keeping in regular contact with them.

Toyota’s effort hit an unexpected speed bump when one of its recently hired lobbying firms, Quinn Gillespie & Associates, dropped Toyota because of a conflict of interest with another client.

Though QGA would not confirm the name of the client in conflict, numerous sources said it was State Farm, a large auto insurer that has made recent statements blasting Toyota and saying that it had reported to the Transportation Department acceleration problems in Toyota vehicles as far back as 2004. State Farm has been a QGA client since at least 2007, lobbying records show. And last year, it paid the firm $600,000 in federal lobbying fees.

With that in the rearview mirror, in his testimony, Toyoda — who has been in the job for less than a year — will take full responsibility for the recalls and attempt to salvage his company’s image in the eyes of lawmakers and customers alike. To date, the company has recalled more than 4 million of its cars and trucks going back to 2004, including the popular Prius hybrid, Tundra, Camry and Corolla models.

“For me, when the cars are damaged, it is as though I am as well,” Toyoda will tell the committee. “Under my leadership, I would like to reaffirm our values of placing safety and quality the highest on our list of priorities, which we have held to firmly from the time we were founded.”

Toyoda’s testimony before the panel today follows Tuesday’s grilling of another top company executive, James Lentz, who appeared before a House Energy and Commerce subcommittee.

In his opening statement, Lentz said the company has “not lived up to the high standards our customers and the public have come to expect from Toyota” and blamed the carmaker’s dysfunctional corporate culture for exacerbating the problem.

“Put simply, it has taken us too long to come to grips with a rare but serious set of safety issues, despite all of our good faith efforts. The problem has also been compounded by poor communications both within our company and with regulators and consumers,” Lentz said in prepared testimony. “While all auto companies have recalls and all major auto companies have experienced complaints about unintended acceleration, Toyota’s recalls have caused concerns among our customers.”

Lentz, president and chief operating officer of the company’s U.S. subsidiary, Toyota Motor Sales USA, also defended how his company has handled its multiple vehicle recalls. “It’s in our interests to find the problems,” he said.

Lentz also told lawmakers on Tuesday that he was “embarrassed” to hear the testimony of another panelist, Rhonda Smith, who recounted a horrifying story involving her alleged runaway Lexus, Toyota’s luxury car line. In her testimony, Smith recalled how her car raced along a Tennessee highway for miles at dangerous speeds, while she unsuccessfully attempted to stop the car.

“The last time I looked at the speedometer it read 100 mph,” she said.