Toyota © Alan Diaz/AP // Toyota © Alan Diaz/AP

Extra2/11/2010 12:15 PM ET

Toyota's deadly secrets

Regulators came to doubt Toyota's commitment to addressing safety defects, and recent events have proved them right.

By The Wall Street Journal

On Jan. 19, in a closed-door meeting in Washington, D.C., two top executives from Toyota Motor gave American regulators surprising news.

Evidence had been mounting for years that Toyota cars could speed up suddenly, a factor suspected in crashes causing more than a dozen deaths. Toyota had blamed the problem on floor mats pinning the gas pedal. Now, the two Toyota men revealed they knew of a problem in its gas pedals.

The two top officials from the National Highway Traffic Safety Administration "were steamed," according to a person who discussed the meeting with both sides. As the meeting closed, NHTSA chief David Strickland hinted at using the agency's full authority, which can include subpoenas, fines, and even forcing automakers to stop selling cars.

Toyota had known about the gas-pedal problem for more than a year. Its silence with U.S. regulators, and other newly uncovered details from the crisis enveloping Toyota, reveal a growing rift between the Japanese automaker and NHTSA, one of its top regulators. Regulators came to doubt Toyota's commitment to addressing safety defects, according to interviews with federal officials and industry executives, and accounts of Toyota and NHTSA interactions the past year.

The heart of Toyota's problem: Its secretive corporate culture in Japan clashed with U.S. requirements that automakers disclose safety threats, people familiar with the matter say. The relationship soured even though Toyota had hired two former NHTSA officials to manage its ties with the agency.

Toyota's troubles spread Tuesday when it recalled all Priuses to address a braking problem, even as executives suggested the step was unnecessary.

Toyota acknowledges the rift with regulators. "Believe me, we have changed our mind-set," said Shinichi Sasaki, Toyota's quality chief, referring to a heated December confrontation in Tokyo with NHTSA officials over floor mats. "We don't believe this is going to be a problem in the future. We are completely on the same page with NHTSA."

Toyota's woes have roots in 2001's redesigned Camry sedan, which featured a new type of gas pedal. Instead of physically connecting to the engine with a mechanical cable, the new pedal used electronic sensors to send signals to a computer controlling the engine. The same technology migrated to cars including Toyota's luxury Lexus ES sedan. The main advantage is fuel efficiency.

But by early 2004, NHTSA was getting complaints that the Camry and ES sometimes sped up without the driver hitting the gas. It launched its first acceleration probe, focusing on 37 complaints, 30 of which involved accidents, according to a NHTSA document filled out by Scott Yon, an agency investigator, dated March 3, 2004.

Yon and another NHTSA official, Jeffrey Quandt, discussed the case several times over the next 20 days with Toyota, according to a deposition by a Toyota official filed in a Michigan lawsuit related to one of the fatal crashes. In that accident, a 2005 Camry allegedly raced out of control for a quarter-mile, and sped up to 80 miles an hour from 25, before crashing and killing its driver.

By month's end, Yon updated his NHTSA case file with a memo. It said NHTSA had decided to limit the probe to incidents involving brief bursts of acceleration, and would exclude so-called "long duration" incidents in which cars allegedly continued racing down the road after a driver hit the brakes.

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The reason: Investigators decided it would be more effective to isolate any possible defect by zeroing in on shorter incidents, a Transportation Department official said. The shorter incidents looked more like "pure cases of engine surging due to a possible defect," the official said. Longer incidents were excluded because they showed more signs of driver error such as mistaking the accelerator for the brake.

Quandt and Yon didn't respond to requests for comment.

Continued: Complaints roll in

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