Toyota President Not To Testify Before Congress But Sending Spokesman

By Richard West on February 18, 2010, 8:44 am

In recent months, Toyota (NYSE:TM), once considered one of the world’s foremost auto manufacturers, has been subject to repeated recalls due to defective designs in their cars ranging from brake pedals to airbags to automatic braking systems. Once believed to be at the forefront of modern automobile technology with the development of the Toyota Prius hybrid, Toyota has now slid to fourth place among auto manufacturers in terms of profitability and sales. In the face of this sudden collapse, and the potential dangers of Toyota vehicles, the US Congress has asked Toyota to testify in order to explain their behavior. The key point of this investigation is to determine how Toyota managed to keep these defects secret from the public for so long, and why alerts from insurance companies and consumer advocacy organizations. In fact, the current recalls were not ordered by any regulatory agency, but were instead conducted voluntarily by Toyota in a last-ditch effort at saving face.

 

CEO Appearance

It has become common, even expected, for CEOs to appear in congress when a company is subpoenaed for an explanation. Only last year, executives from GM were trotted out before an irate congress to explain why they permitted one of the largest and most prestigious companies in America to go bankrupt. Despite this, the CEO of Toyota, a Mr. Akio Toyoda, has refused to testify in congress personally. Although he assures Congress and other investigative agencies that he will comply with all investigations into the recalled Toyota vehicles, he has chosen instead to send a low-ranking spokesman to answer congressional questions. Although Mr. Toyoda excuses himself by claiming he needs to oversee the company as it redesigns it’s quality control procedures, many see this as an attempt to sidestep culpability for the cover-up by Toyota of potentially lethal design flaws.

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