Toyota's Getting That Nixon Look

[weiweishen]

http://www.fool.com/investing/general/2010/04/08/toyotas-getting-that-nixon-look.aspx

 

 

"We now have proof that Toyota failed to live up to its legal obligations. Worse yet, they knowingly hid a dangerous defect for months from U.S. officials and did not take action to protect millions of drivers and their families."

-- U.S. Transportation Secretary Ray LaHood

 

LaHood also noted that there are two investigations still ongoing, and more fines are possible -- and that was followed up on Tuesday with news that the House Energy and Commerce Committee was ramping up its own investigations. Congress is currently digging into some 70,000 pages of documents turned over to the government by Toyota, with another round of hearings likely to follow.

 

Speaking of Congress, another bomblet got dropped on Wednesday night, when several media outlets obtained a copy of a couple of emails included in that 70,000 pages, emails that suggested that Toyota's U.S. arm knew about the sticking accelerator pedals -- but was constrained from telling regulators about the problem by executives in Japan.

 

The Secretary of Transportation is saying that one of the world's largest carmakers knew that several of their products had a life-threatening safety defect -- putting millions of customers at risk -- and chose to hide that information.

 

Specifically, they chose to hide that information so that their reputation for "quality" wouldn't be at risk.

 

That's bad, folks. Really bad.

 

 

Toyota has two weeks -- from this past Monday -- to pay the fine or file an appeal. Either course of action seems fraught with danger. If they just pay the fine, hoping (again) to start putting the scandal behind them, that could be construed as an admission of guilt in the (many) ongoing lawsuits against the company. That could get very expensive -- in more ways than one.

 

But contesting it will lead to a court battle, almost surely amplifying the ongoing PR damage, and could lead to allegations of "stonewalling." And those allegations might well hold water, at least in the court of public opinion, given the emails released on Wednesday.

 

Toyota's on a hot seat right now. And it isn't likely to cool off any time soon.

[papilgee4evaeva]

I don't think this could have played out any better if we wrote the script ourselves. :reading:

[CKNSLS]

I don't think this could have played out any better if we wrote the script ourselves. :reading:

 

Yea, just like Ford internal memos showed how it would be cheaper to pay for human lifes/suffering than fix the Pinto Fuel tank.

 

"Although Ford had access to a new design which would decrease the possibility of the Ford Pinto from exploding, the company chose not to implement the design, which would have cost $11 per car, even though it had done an analysis showing that the new design would result in 180 less deaths. The company defended itself on the grounds that it used the accepted risk/benefit analysis to determine if the monetary costs of making the change were greater than the societal benefit. Based on the numbers Ford used, the cost would have been $137 million versus the $49.5 million price tag put on the deaths, injuries, and car damages, and thus Ford felt justified not implementing the design change."

 

 

http://www.wfu.edu/~palmitar/Law&Valuation/Papers/1999/Leggett-pinto.html

 

Or, Ford's handling of the Crown Vic gas tank issue-

 

http://www.crownvictoriasafetyalert.com/designproblem.html

 

There are skeletons in everybody's closet......isn't there?

Edited April 10, 2010 by CKNSLS

[jpd80]

Yea, just like Ford internal memos showed how it would be cheaper to pay for human lifes/suffering than fix the Pinto Fuel tank.

 

Except that Ford made that decision in 1968 and was made to pay for it.

 

Toyota armed with knowledge of what Ford did 42 years ago and how they were made pay for it

in fines and law suits then made a conscientious decision to lie and deceive government investigators...

 

You tell me the difference.