Toyota's Business Model Is Broken, Says Transportation Secretary

By Chingyu Wang-Talk Radio News Service

Transportation Secretary Ray LaHood said Tuesday that Toyota's business model is broken.

“The Toyota recall situation is very serious and we are treating it seriously," LaHood said during an appearance before the Senate Commerce, Science and Transportation Committee. “Toyota’s business model is broken,"

Committee Chairman John Rockefeller (D-WV) echoed LaHood in his criticism of the auto-manufacturer.

“Toyota has not been responsive to their increase [of recalls] and doesn’t seem to take consumer protection as a mission for NHTSA seriously,” said Rockefeller, who added that Toyota would not give adequate responses until approached by U.S. officials either via phone call or through an in person visit to Japan.

LaHood agreed with suggestions from lawmakers that Toyota would benefit from emulating a system used by Nissan to determine when to issue recalls, wherein a three-person group, including one U.S. based safety executive, makes the final decision.

LaHood also agreed that a brake override system would help drivers to control their vehicle during a sudden acceleration episode.

LaHood was joined by National Highway Traffic Safety Administration (NHTSA) administrator David Strickland, who received criticism from Sen. Olympia Snowe for not paying enough attention at the beginning of the recall issue, pointing out that 6 deaths in ’04 and 7 deaths in ’07 were attributed to unintended acceleration.

“I don’t see that NHTSA did any of the work necessary to have satisfied an independent analysis,” said Snowe.

Sen. Daniel Inouye (D-HI) noted that Toyota's troubles were part of a larger trend, and cited data from the NHTSA showing that more than 18 million vehicles were recalled in 2000-2001 alone, including cars from General Motors, Chrysler, Ford, Mitsubishi, Toyota, and Hyungdai.

“It is not a Toyota problem, it’s a industry problem,” said Inouye. “We should hear from the industry, not just from Toyota.”