Toyota document brags of $255 million savings by avoiding investigations, recalls

Toyota executives are off to Washington this week to face Congressional hearings on the company’s recent bout of safety issues.  Every major media outlet is covering Toyota’s unintended acceleration woes, but the carmaker’s PR mess is about to get even worse, as a new internal document has leaked, bragging that the company saved over $200 million by avoiding safety investigations, limiting recalls, and delaying implementation of federal safety requirements.

The Detroit Free Press first came across the leaked document and reported, “Toyota’s leading U.S. executive boasted to the automaker’s Washington staff last summer that they had saved the company more than $100 million by limited any regulatory action on sudden acceleration to a recall of equipment such as floor mats, according to documents turned over to a key U.S. House committee holding hearings on the issue Wednesday.  Earlier this month before the hybrid recall, Toyota executives estimated that the unintended acceleration recalls would cost $2 billion in lost sales and cost of extra parts for repairs.”

The slide, obtained as part of a set of documents Toyota was forced to hand over to Congress following a federal grand jury subpoena, comes from a presentation entitled “Wins for Toyota Safety Group.”  The claims in it include that Toyota was able to get the government to close its investigation of the Tacoma truck (which suffers from premature frame rust and structural failure) without any recalls, prevent any action on the Sienna minivan’s weak door handles and lock mechanisms, limiting the defective floormat recall on the Camry / Lexus ES, and saving over $100 million by delaying implementation of the federal side-impact airbag requirement, for a total of $255 million in safety-related savings.

Toyota President Akio Toyoda is set to testify before Congress on Wednesday, and this will surely make for some tough questions.  While every automaker has such documents floating around internally, and Toyota’s document is not quite the Ford Pinto Memo, the implication that safety was compromised in order to boost corporate profits will further tarnish the company’s once-great but now severely damaged reputation for quality.

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