Toyota Was Warned Of Defects By Inside Employee

The smoking gun inside Toyota (TM) has been found. An executive warned his colleagues in the US that cars made by the Japanese company had severe defects.  the warning came weeks before the world’s No.1 car firm recalled 8.8 million vehicles.

In a memo published by several media, Irv Miller, the Senior Vice President of Environmental and Public Affairs for Toyota in the US wrote, “I hate to have to break this to you, but WE HAVE a tendency for MECHANICAL failure in accelerator pedals of a certain manufacturer of certain models.” It is the sort of damning evidence that the DOT and lawyers for people suing Toyota over the defects have eagerly sought.

The e-mail also suggested that Toyota “come clean” about its mechanical problems. The January 16 statement also said “the time to hide on this one is over.” According to The Wall Street Journal, “Toyota declined to comment on the email,” as if that would be a surprise to anyone.

Toyota had a small chance of settling its recall matter with the DOT for a fine of just over $16 million. A lack of evidence may also have allowed the firm to reasonably defend itself against class action and individual suits against the company by people who claim they were injured in Toyotas with accelerator or brake problems. The e-mail gives both the government and plaintiffs a document to press their cases against Toyota.

Toyota has defied skeptics who believed that the recalls would badly damage its US sales. But, the company’s US market share moved above 16% in March after dropping to just about 12% in February. Many analysts credit large rebates and attractive financing deals for that improvement, but no amount of incentives can get people who are truly worried about an unsafe vehicles to get behind the wheel. Toyota’s image for quality and safety, built over a decades in the US, helped to get it out of a jam.

But, Toyota’s run of “good luck” which began with strong March sales is probably over. Rumors and innuendo about cover ups at Toyota might be ignored by part of the car buying public. Evidence won’t be.

Douglas A. McIntyre