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Business

Toyota head to face US Congress grilling

Text by News Wires

Latest update : 2010-02-19

Toyota Motor boss Akio Toyoda has bowed to pressure to testify before US lawmakers next week as the beleaguered Japanese carmaker grapples with the worst crisis in its history.

AFP - The head of embattled Toyota has bowed to calls to testify in US Congress as lawmakers demand a whistleblower lawyer hand over potentially damning internal company documents on alleged safety defects.
   
A key congressional committee has subpoenaed former Toyota lawyer Dimitrios Biller, who has accused the world's biggest car maker of hiding and destroying evidence of safety problems and of "a culture of hypocrisy and deception".
   
Toyota is recalling more than eight million cars worldwide for defects linked to more than 30 deaths in the United States that have sparked a host of US lawsuits which could cost the company billions of dollars in damages.
   
Akio Toyoda, the usually publicity-shy grandson of the company's founder, was initially reluctant to appear before the US Congress but relented following an invitation by Representative Edolphus Towns to testify next Wednesday.
   
"Since I received an official letter, I decided that I'm pleased to go. I want to speak there with all sincerity," Toyoda told reporters.
   
"What I want to stress most is our cooperation in determining the causes (of the problems) and our firm stance on safety," he added.
   
In a statement, Towns and Representative Darrell Issa welcomed Toyoda's decision, saying: "We believe his testimony will be helpful in understanding the actions Toyota is taking to ensure the safety of American drivers."
   
They also asked Biller, a top US lawyer for Toyota from 2003 to 2007, to bring all documents he has "relating to Toyota motor vehicle safety and Toyota's handling of alleged motor vehicle defects and related litigation".
   
Biller says the internal company documents show the beleaguered firm was hiding evidence of safety defects from consumers and regulators.
   
The lawyer, speaking with ABC News, has accused Toyota of hiding and destroying evidence and of "a culture of hypocrisy and deception".
   
Toyota has denied Biller's claims, describing him as a disgruntled former employee, and both sides are locked in a legal battle.
   
The iconic company, whose global expansion pushed it past General Motors in 2008 as world number one, is facing a litany of complaints ranging from unintended acceleration to brake failure in its Prius hybrid cars.
   
US safety officials are probing whether Toyota dragged its feet on tackling the problems, and President Barack Obama's Transportation Secretary Ray LaHood has vowed "to hold Toyota's feet to the fire" to make sure its cars are safe.
   
The auto giant's president has faced mounting criticism about his handling of the crisis, the worst in the company's history.
   
"President Toyoda should have announced his attendance much earlier as he has no choice but to appear before Congress under the current circumstances," said Mamoru Kato, an analyst at Tokai Tokyo Research Centre.
   
"Toyota Motor hopes to calm the issue with his appearance, but it's unlikely," he said. "There is no sign of this blowing over as distrust in Toyota is quite serious, particularly in the United States."
   
Japan's Transport Minister Seiji Maehara welcomed Toyoda's decision to appear before US lawmakers, but added: "I think it's regrettable that there were flip-flops and talk that he would not attend."
   
With its sales slumping following a string of safety issues, Toyota said this week that it was suspending output at two US plants for up to two weeks.
   
And according to media in Britain, Toyota will also idle its plant there next month for two weeks as it pushes ahead with a previously announced plan to cut 750 British jobs through a redundancy programme.
   
Toyota shares fell 1.78 percent to end Friday at 3,300 yen. The stock has plunged more than 20 percent since January 21 in response to the mass recalls, which have triggered fears for the brand image of the whole of corporate Japan.
   
In a bid to prevent runaway car crashes, Toyota announced Wednesday that it would fit all new models with a system to cut engine power when the driver steps on the accelerator and brake pedals at the same time.
   

Date created : 2010-02-19

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