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Toyota documents hail $100m in recall savings

By Ken Thomas
Associated Press / February 22, 2010

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WASHINGTON - Toyota officials claimed they saved the company $100 million by successfully negotiating with the 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 profit 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 world’s largest automaker has been criticized for responding too slowly to complaints of sudden acceleration in its vehicles, threatening to undermine its reputation for quality and safety.

The documents were turned over to the House Oversight and Government Reform Committee and obtained by the Associated Press yesterday. The presentation was first reported by The Detroit News.

A Toyota spokeswoman did not immediately comment.

Kurt Bardella, a spokesman for Representative Darrell Issa, the top Republican on the committee, said the documents raise questions on “whether Toyota was lobbying for less rigid actions from regulators to protect their bottom line.’’

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.