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Toyota Executive Urged Company to ‘Come Clean’

NEWS
Toyota Executive Urged Company to ‘Come Clean’

Thursday, April 8, 2010

Toyota’s bid to present itself as a company that puts customers first has been shattered by an internal memo in which a senior American executive begged Japanese management to stop concealing safety issues from the general public.

“The time to hide on this one is over,” warned the email, “We need to come clean.”

The emergence of the email follows the decision by U.S. safety regulators earlier this week to issue Toyota with the maximum possible fine of $16.4 million. That judgment, which punishes the Japanese giant for its slow response to safety issues, has left the company in a difficult position: appeal and prolong its public grilling or accept the decision and risk admitting liability in scores of class-action lawsuits.

Written in mid-January, just days before the company was plunged into its most damaging vehicle recall ever, the email refers directly to company efforts to cover-up mechanical problems with accelerator pedals.

Before January, Toyota had only acknowledged publicly that accelerator pedals could become stuck by becoming entangled in loose floor-mats.

But the internal emails now in the hands of U.S. investigators reveal a tussle within Toyota over whether or not to inform the public over more fundamental flaws in the pedal mechanism – problems that had not at the time been fully understood by Toyota’s engineers and to which there was no clear “fix” available.

Irv Miller, who has since retired but was then Toyota’s vice president for public affairs, sent the email in response to comments by his Japanese colleague, Katsuhiko Koganei – a senior executive who had been dispatched from Toyota’s Japanese headquarters to co-ordinate with his U.S. colleagues.
Mr. Koganei argued in a previous email that the company “should not mention about the mechanical failures of the pedal”, because the cause of the fault had not yet been identified and that a statement by Toyota would unsettle motorists.

“We are not protecting our customers by keeping this quiet,” replied Mr. Miller, who then used capital letters to stress his concern, “…WE HAVE a tendency for MECHANICAL failure in accelerator pedals of a certain manufacturer on certain models.”

The email is among a massive collection of over 70,000 documents currently held by U.S. government safety investigators as they continues their probe into Toyota’s handing of its “sticky” accelerator problems. The paper trail includes a large number of internal emails and memos.

Those documents include a letter sent in 2006 to the then president of Toyota from the leader of one of the company’s unions. The letter cited direct and long-term experience from the factory floor and identified systemic “safety sacrifices” made as the company had expanded.

Toyota said that it would not comment on internal communications within the company but said that: “we have publicly acknowledged on several occasions that the company did a poor job of communicating during the period preceding our recent recalls.”

Toyota said that it had subsequently taken “important steps to improve our communications with regulators and customers”.

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