February 22, 2010 / 8:26 PM / 10 years ago

Memos show regulators cut short Toyota probe in 2007

WASHINGTON (Reuters) - Safety regulators considered a wider probe of acceleration risks on Toyota vehicles and further safety steps as early as 2007, two years before Toyota launched the first of its sweeping recalls.

The National Highway Traffic Safety Administration ended its probe of the issue in October 2007 without finding a defect at Toyota. It took that step despite privately acknowledging consumer warnings of “extremely dangerous” risks and the prospect that more Toyota vehicles could be affected by acceleration problems.

The disclosures come in documents provided to the U.S. House Oversight and Government Reform Committee by NHTSA as part of the panel’s probe into whether Toyota Motor Corp (7203.T) and U.S. regulators were slow to respond to red flags on safety.

A copy of the documents was obtained by Reuters on Monday. The committee holds a hearing on Wednesday with witnesses including Toyota President Akio Toyoda and top U.S. transport officials.

Part of the focus for both congressional investigators and victims’ lawyers is the question of whether Toyota tried to forestall tougher safety actions by U.S. officials, and whether regulators were lax in pursuing the possible causes of unintended acceleration in Toyota vehicles.

“One of the questions is ‘Is this relationship too cozy?’” said Kurt Bardella, a spokesman for Rep. Darrell Issa, the ranking Republican on the oversight committee.

The U.S. House Energy and Commerce Committee, a panel that will hold a hearing Tuesday on Toyota, criticized Toyota on Monday for dismissing the risk of problems with its throttle control systems and for issuing “misleading” statements about its recent recalls.

Toyota told reporters on Monday that it had conducted numerous tests on its electronic throttle system going back 6 to 7 years, and to date was unable to find any link to unintended acceleration.

AVOIDING WIDER RECALL

The documents released on Monday shed new light on how Toyota managed to avoid a wider recall and investigation in 2007. Representatives of Toyota and NHTSA could not be immediately reached for comment.

Nothing in the documents explains specifically why NHTSA allowed Toyota to proceed with a relatively limited floormat recall in 2007 without pursuing other causes or examining the risk for loose floormats on other Toyota vehicles.

“Consumers express that the mat interference causes an extremely dangerous safety consequence,” NHTSA said in a summary of its 2007 discussions with Toyota. “Owners, retailers and technicians do not associate floormats with this level of risk.”

NHTSA had opened seven investigations into reports of unintended acceleration between 2003 and 2009 on Toyota but concluded five of those without finding evidence to support a continuing probe or a recall.

In two cases — in 2007 and again in 2008 — NHTSA agreed to allow Toyota to conclude the probe with a floormat recall.

The 2007 investigation was the more significant because it took aim at Toyota’s top-selling Camry sedan and the Camry-derived Lexus ES350, vehicles at the heart of Toyota’s lineup in its largest market.

Toyota agreed in October 2007 to recall 55,000 floormats on those vehicles after concluding that all-weather floormats could cause accelerator pedals to become stuck.

In an internal memo also submitted to the oversight panel, Toyota said its Washington staff had “negotiated” that outcome with NHTSA under the Bush administration and that the limited recall had saved it over $100 million.

The same memo from July 2009 says that Toyota was braced for tougher oversight from safety regulators under the Obama administration, which it called “not industry friendly.”

“NHTSA’s new, more aggressive management includes more attorneys at the agency, even in the leadership of rulemaking and enforcement,” Toyota said. “The new team has less understanding of engineering issues and are primarily focused on legal issues.”

ACTIONS SUFFICIENT

In 2007, Toyota managed to avoid a more costly recall and a wider investigation despite concerns by regulators.

An email sent by NHTSA safety investigator Scott Yon to Toyota Vice President Chris Santucci on August 29, 2007 said the safety agency was “considering expanding the scope” of its investigation to include “other models and model years.”

Toyota opposed that action. NHTSA said in its summary of its discussions with the automaker that Toyota believed that “actions taken are sufficient” and that it was “not considering anything else,” according to the documents.

In the end, both sides agreed to the floormat recall, but NHTSA officials appear to have entertained doubts about whether that went far enough.

Under the heading “next steps,” NHTSA said it was considering asking Toyota for reports on other models that could be affected and considering “research” into other throttle control issues.

NHTSA also considered in 2007 whether it should issue a consumer advisory about how to shut off vehicles equipped with engine control buttons, like the Toyota Prius and some Lexus models, instead of traditional key-turned ignition systems.

“Other manufacturers use a ‘smarter’ throttle and engine control design approach,” the memo from 2007 said.

U.S. regulators now believe five deaths are associated with floor mats in Toyota vehicles and are reviewing up to 29 other fatality reports to see if they are related to unintended acceleration.

Reporting by Kevin Krolicki; Editing by Tim Dobbyn

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