Congressional spotlight on Toyota; CEO set to offer apology before House panel

All eyes in Tokyo will be on Washington Wednesday, when Toyota
President Akio Toyoda testifies before a House panel on his embattled
company’s recalls.

The hearing is the culmination of a very public fray that has sparked headlines around the world but is drawing the most intense attention in Toyota’s home country of Japan.

{mosads}Japan will see one of its top corporate figures take the hot seat amid worries that Toyota’s problems could hurt Japan’s export-dominated economy.

Toyoda offered an apology in testimony he will formally give Wednesday to the House Committee on Oversight and Government Reform. He said he fears the pace at which the carmaker expanded in recent years may have compromised safety, leading to a massive recall of millions of vehicles.

“Quite frankly, I fear the pace at which we have grown may have been too quick,” Toyoda said in the prepared remarks.

The dramatic apology came as James Lentz, Toyota’s head of North American sales, was grilled at a separate hearing on Tuesday by the House Energy and Commerce Committee.

Lentz said Toyota was still coming to grips with its problems, and he acknowledged the recall that has hammered the company may not totally solve the problem of sudden acceleration in some Toyota vehicles.

While Toyota’s troubles are one of the leading stories in the U.S., it’s even bigger news in Japan, something the lawmakers expected to grill Toyoda on Wednesday realize.

“The way the Japanese press is covering Mr. Toyoda is the way the American press covered Tiger Woods,” said Kurt Bardella, a spokesman for Rep. Darrell Issa (R-Calif.), the ranking member of the Oversight Committee.

Japanese media had camped out at airports and in Issa’s district, Bardella said, as the California lawmaker began to make waves for his probe into Toyota and the National Highway Traffic Safety Administration (NHTSA).

Toyota is one of the biggest companies in Japan as well as one of the highest-earning companies in the world, and its success in many ways is a symbol of Japan’s post-World War II growth, in which Japan became the second largest economy in the world, after the U.S.

Toyota and Japan built a reputation with consumers in the U.S. and around the world for high-quality lines of vehicles.

Toyota’s problems threaten that image, and could be an opportunity for troubled automakers General Motors and Chrysler to rebound from their bankruptcies last year. Ford, the only U.S. automaker not to take a bailout from the government last year, is looking to build on its position and growing market share.

Lawmakers are set to press Toyoda on whether or not different lines of Toyota’s vehicles are safe to drive, and whether the automaker did enough to recognize and respond to several different manufacturing problems that led to recalls — and which have been linked to some deaths.

Lawmakers on the Oversight panel are also interested in looking at how Toyota hired recent government officials and whether a revolving door existed that inhibited regulators from looking into complaints against the carmaker.

Toyoda’s appearance comes after members of the Oversight Committee threatened a subpoena for the CEO after he had initially declined an invitation to appear before the panel.

Oversight members will also go after the U.S. government’s response to Toyota’s problems, probing whether the NHTSA was responsive enough to signs that Toyota lines were experiencing the types of issues that eventually led to the recall.

Part of the hearing, Oversight officials said Tuesday, would focus on whether NHTSA can say it has identified and fixed its policies, as well as “restoring public trust” in the auto oversight agency.

On Tuesday, Rep. Henry Waxman (D-Calif.), chairman of the Energy and Commerce Committee, said there are “fundamental reforms” needed at the NHTSA  that will require action by Congress.

Transportation Secretary Ray LaHood will stick up for his agency, saying in testimony that NHTSA has conducted extensive reviews over the years into a number of auto problems, including the “sticky pedal” problem facing Toyota.

Toyoda’s company is being advised by a team of high-powered K Street lobbyists, including the recent addition of the Glover Park Group, which boasts Democratic heavyweights from the Clinton administration.

Toyoda will seek to quell the concerns that have plagued his company, but his testimony released on Tuesday shows his strategy is to be apologetic and to emphasize that Toyota realizes it lost sight of its priorities.

“I would like to point out here that Toyota’s priority has traditionally been the following: first, safety; second, quality; and third, volume,” Toyoda’s testimony states. “These priorities became confused, and we were not able to stop, think and make improvements as much as were able to before, and our basic stance to listen to customers’ voices to make better products has weakened somewhat.”

Toyoda will read his prepared testimony in English, but answer questions in Japanese, which will be relayed to members of the committee through an interpreter.