March 2, 2010 / 5:47 AM / 8 years ago

UPDATE 5-Toyota's top US exec warned about quality in 2006

* Press: quality slipping, growing problems with regulator

* Senator likens safety reputation to ‘house of cards’

* U.S. may require brake override for new vehicles

* Senator Rockefeller says will work on legislation

* U.S. says 47 crash deaths over past decade under review (Recasts with Toyota document; adds further quotes from hearing)

By John Crawley

WASHINGTON, March 2 (Reuters) - Toyota Motor Corp’s (7203.T)(TM.N) top U.S. executive warned back in 2006 that the quality of the company’s vehicles was slipping, documents examined by congressional investigators show.

The internal presentation by Jim Press, then president of Toyota Motor North America, also warned the company was facing growing problems with the National Highway Traffic Safety Administration (NHTSA).

Senator John Rockefeller, chairman of the Senate Commerce Committee, disclosed the documents on Tuesday as the panel began to question three Toyota executives over recent massive recalls for sometimes deadly unintended acceleration.

Rockefeller said the message from Press did not seem to have been heard in Japan.

“A year and-a-half later, Chris Tinto, Toyota’s top safety official in Washington, tried to warn his superiors in Japan that quality problems were growing and, in his words, ‘we have a less defensible product that’s not typical of the Toyota that I know,’” said Rockefeller.

Senators had harsh words for both U.S. safety regulators and Toyota, which has recalled more than 8.5 million vehicles worldwide in recent months for the unintended acceleration in various models and braking problems in its Prius hybrid.

The recalls have badly dented Toyota’s reputation for safety and hurt its sales, which fell 8.7 percent in the United States in February, prompting the automaker to announce marketing incentives.

“I’m deeply concerned this reputation was built on a house of cards,” Senator Frank Lautenberg told the commerce committee hearing regarding Toyota’s safety reputation.

During last year’s bankruptcies of General Motors [GM.UL] and Chrysler, the U.S. automakers were often exhorted to be more like their Japanese rivals. “We’re not hearing that anymore,” the Democrat from New Jersey said.

MORE APOLOGIES

Toyota North America’s current president, Yoshi Inaba, reiterated the company’s apology for losing customer focus during its period of rapid global growth.

“We sincerely regret that our shortcomings have resulted in the issues associated with our recent recalls,” Inaba said, adding that Toyota dealers have so far fixed more than 1 million recalled vehicles.

He and other Toyota executives detailed quality control changes to address concerns raised at the Senate hearing and at two hearings last week by the House of Representatives.

Executives in North America will have more authority over recall decision-making and safety will be given a sharper focus in vehicle design.

Unintended acceleration in Toyota and Lexus vehicles has been linked with at least five U.S. crash deaths since 2007.

Authorities are investigating 47 other crash deaths over the past decade associated with complaints of alleged unintended acceleration in Toyota vehicles, the U.S. Department of Transportation said.

Two major recalls over the past five months have focused on mechanical explanations for acceleration problems, including loose floor mats that can jam the the accelerator and “sticky” accelerator pedals that do not spring back as designed.

Toyota has already said it will retrofit a brake override into a range of its vehicles as an additional measure, as well as incorporating the feature into new vehicles.

U.S. Transportation Secretary Ray LaHood said transport officials were looking at whether that should be a mandatory feature for all new vehicles.

“As a part of our investigation and review we are looking at the possibility of recommending the brake override system in all manufactured automobiles,” he told the committee.

LaHood also said it was imperative that Toyota put a high-ranking U.S. executive in charge of U.S. safety issues and said the law regulating how former regulators can be employed by the auto industry needs to be tightened up.

ELECTRONIC THROTTLE

Lawmakers, safety advocates and consumers have questioned whether enough attention has been paid to the possibility that electronic throttle glitches are behind at least some of Toyota’s problems with unintended acceleration since 2002.

Toyota’s chief engineer, Takeshi Uchiyamada, said Toyota has extensively tested its electronic throttles and found no problems, but said he was open to an outside assessment, including by the U.S. National Academy of Sciences.

Rockefeller said he would work on legislation to address safety oversight of the entire industry, not just Toyota and reserved some of his sharpest criticism for NHTSA.

Until Toyota’s first big recall in October, NHTSA had taken only modest action to address rising consumer complaints of unintended acceleration in Toyota and Lexus vehicles.

“NHTSA’s actions and inactions in the years leading up to today are deeply troubling,” said Rockefeller.

But NHTSA’s new chief, David Strickland, defended agency investigations of Toyota, saying its response “was absolutely appropriate.”

Strickland also said Toyota’s large U.S. market share had boosted the number of complaints. “They had the same percentage of sudden acceleration issues as other manufacturers.” (Reporting by John Crawley; Additional reporting by Karey Wutkowski and Kim Dixon in Washington, and Bernie Woodall in Detroit; Editing by Maureen Bavdek and Tim Dobbyn)

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