Documents: Toyota boasted saving $100M on recall

Modbert

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Sep 2, 2008
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http://finance.yahoo.com/news/Documents-Toyota-boasted-apf-3066044297.html?x=0

TOKYO (AP) -- Claims by Toyota in internal documents that it saved money by obtaining a limited recall from regulators in 2007 create an even bigger challenge for the automaker's president when he testifies before U.S. lawmakers this week over quality and safety lapses.

Toyota officials said they saved $100 million by successfully negotiating with the U.S. government on a limited recall of floor mats in some Toyota and Lexus vehicles, according to new documents shared with congressional investigators.

Toyota, in an internal presentation in July 2009 at its Washington office, said it saved $100 million or more by negotiating an "equipment recall" of floor mats involving 55,000 Toyota Camry and Lexus ES350 vehicles in September 2007.

The savings are listed under the title, "Wins for Toyota -- Safety Group." The document cites millions of dollars in other savings by delaying safety regulations, avoiding defect investigations and slowing down other industry requirements.

The documents could set off alarms in Congress over whether Toyota put profits ahead of customer safety and pushed regulators to narrow the scope of recalls. Two House committees are holding hearings this week on the Japanese automaker's recall of 8.5 million vehicles in recent months to deal with safety problems involving gas pedals, floor mats and brakes.

The new documents show the financial benefit of delay. In the presentation, Toyota said a phase-in to new safety regulations for side air bags saved the company $124 million and 50,000 man hours. Delaying a rule for tougher door locks saved $11 million.

In one passage, the document says Toyota "negotiated 'equipment' recall on Camry/ES re SA; saved $100M+, w/ no defect found."

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