Toyota exec warned on defect: "We need to come clean"

A Toyota Motor Corp car is seen during a hi-function shower test demonstration at the quality-control facility in Toyota, central Japan March 30, 2010.

TOKYO (Reuters) - A senior Toyota Motor Corp (7203.T) executive in the United States warned in a January email that the automaker needed to "come clean" on a safety defect that caused accelerator pedals to become stuck open.

The January 16 email from Irv Miller, then Toyota's top U.S. spokesman, was sent five days before the automaker launched a recall for about 2.3 million vehicle to fix the sticky accelerator pedals.

"We are not protecting our customers by keeping this quiet," Miller said in his email. "The time to hide on this one is over. We need to come clean."

A copy of the document was obtained by Reuters on Thursday. Its release comes as Toyota considers whether to appeal a proposed $16.4 million safety fine by U.S. safety regulators.

The email exchange between Miller and a Japanese colleague arguing against responding to media reports of mechanical failures highlights the gap in the level of urgency at the U.S. arm and headquarters -- a problem that Toyota later acknowledged contributed to delays in its responses.

The email from Miller, who was about to retire a month later, was one of thousands of pages of internal correspondence collected by U.S. government officials investigating Toyota.

The U.S. Department of Transportation proposed the fine against Toyota -- the largest allowed by law -- and said that the automaker had knowingly delayed the recall for defective accelerator pedals.

Toyota has two weeks to decide whether to appeal that penalty for the first official finding that the world's largest automaker violated U.S. safety regulations.

Toyota spokesman Mike Michels said on Thursday that the automaker had not determined its response yet.

The automaker said it would not comment on Miller's email.

"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 in a statement.

"We have subsequently taken a number of important steps to improve our communications with regulators and customers on safety-related matters to ensure that this does not happen again."

Miller said in his email that senior U.S.-based executives, Jim Lentz and Yoshimi Inaba, were traveling to Washington to meet with the National Highway Traffic Safety Administration (NHTSA) on the accelerator defect in mid-January.

"We better just hope that they can get NHTSA to work with us in coming with a workable solution that does not put us out of business," he said.

NHTSA has said that Toyota executives including Lentz met with regulators on January 19 and were told that the agency expected Toyota to move quickly to address the accelerator problem.

At that point, relations between the automaker and U.S. safety regulators had already become strained with U.S. Transportation Secretary Ray LaHood saying that Toyota had become "safety deaf", officials have said.

Automakers are legally obligated to tell U.S. safety regulators within five days if they determine that a safety defect exists.

U.S. safety regulators said in proposing the record fine against Toyota that the automaker's own records showed that it had issued repair notices for the sticky pedal problem in Canada and Europe in September but did not take action in the U.S. market until January.

"WE HAVE a tendency for MECHANICAL failure in accelerator pedals of a certain manufacturer on certain models," Miller said in his email, using capital letters for emphasis.

Toyota issued a recall for pedals manufactured by supplier CTS Corp (CTS.N) on January 21.

On January 26, the automaker took the unprecedented step of halting sales of eight models, including its top-selling Camry sedan, as it worked to fix faulty accelerators on vehicles in inventory.

Miller's email was sent to Katsuhiko Koganei, a Toyota executive on assignment from headquarters to coordinate communication at its U.S. sales headquarters in California.

In the previous email in the chain, Koganei said that the automaker "should not mention about the mechanical failures of (the accelerator) pedal".

He said the cause of the problem and the fix had not been determined and a statement by Toyota could raise public uneasiness.

Miller and Koganei could not be immediately reached for comment.

The back-and-forth came as Toyota debated how to respond to an ABC news report about a New Jersey driver who complained that his Toyota had experienced a sticky accelerator pedal.

(Additional reporting by Bernie Woodall in DETROIT and John Crawley in WASHINGTON; Editing by Rodney Joyce)