Saturday, January 30, 2010

Is Obama Behind the Curious Toyota Recall?

Many Toyota insiders are furious at the Obama Administration. The recall Toyota has issued is the result of pressure from the U.S. Transportation Department. They believe that the pressure is coming not because of a true concern for safety, but an attempt by the Administration to drive sales toward American carmakers including those recently bailed out.

Although Toyota insiders admit that pedal sticking has occurred in a few cars, they point out that it has occurred in fewer than 300 cars, and not something where the Administration shouild have pushed for an immediate full recall, but rather something that could be handled during routine maintenance after a reasonable priced solution was developed.

Toyota insiders tell me that the only solution at this time to correct the "problem" identified by the Transportation Department would cost $2,000 per car. There are 1.8 million vehicles that are subject to the recall.

Transportation Secretary Ray LaHood told WGN Radio in Chicago that "the reason Toyota decided to do the recall and to stop manufacturing was because we asked them to."

LaHood said the department urged the company to act and credited Toyota for going "a step above" by stopping production.

David Strickland, the administrator of the National Highway Traffic Safety Administration, told reporters in Washington that the Transportation Department had been in regular communication with Toyota about the recall. He said the company's decision to stop selling the vehicles was "an aggressive one and one that is the legal and morally correct thing to do."

MSNBC reports:

The timing of the recall and production suspension could not be worse for Toyota. Two years ago, the company beat out General Motors Co. to become the world's largest automaker. Now just weeks into 2010, it is stopping some sales in its biggest market, the U.S., at a time when it desperately needs to sell cars here after reporting its first-ever annual loss last year.

General Motors is offering interest-free loans and other incentives to Toyota owners who may want to get rid of their cars due to fears about faulty gas pedals.

GM General Manager of Retail Sales Steve Hill said Wednesday the company is responding to thousands of inquiries from Toyota owners.
Toyota has its scientists and design engineers working furiously in an attempt to find a cheaper method of fixing the problem, than the $2,000 per car fix. The current fix would cost the car maker $3.6 billion.


  1. I own a 2007 Camry. Now that it's considered a POS with no resale value, I'm relieved to at least know it's a Toyota, which are built to last damn near forever...

    oh, the irony...

  2. Interesting. Anoymous is perfectly happy with the durability of his 2007 Toyota while TC believes Toyota has "destroyed the Lexus brand."

    Can they both be right? With a company as big as Toyota its possible one brand declines as another rises.

    Toyota's relationship to their govt isn't much different to the relationship between GM and its govt. So its become a battle of mediocraty. Sadly auto technology has not improved significantly since the 1930's. And this latest intervention suggests this sad performance is likely to continue.

  3. Perceived competition has been a major marketing ploy by US automakers for decades. Part of the decline can be attributed to the fact that the brand variety has been decimated by company consolidations over the past decade.


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