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27 February 2024

Toyota faces US Congress crucible

The US Congress this week takes aim at Toyota's safety woes, an election-year probe tempered by worries over the 172,000 jobs the Japanese auto giant says are tied to its US operations.

Already, elected officials in states where the world's number one carmaker is an economic heavyweight have warned against a "rush to judgment" while underlining that consumer safety is their top priority.

Toyota, in a multi-billion-dollar blow, has recalled nearly nine million vehicles worldwide following a series of complaints and a slew of lawsuits claiming vehicle flaws were linked to 30 deaths across the United States.

Key US congressional committees plan to explore what the company knew, and when, as well as the response from US regulators, in hearings expected to feature tough questions for embattled Toyota president Akio Toyoda.

But with sky-high US unemployment and November mid-term elections not far off, lawmakers and governors have tried to strike a balance between safety concerns and the sour US jobs picture.

For Democratic Representative Charles Gonzalez, who has constituents employed by a Toyota plant just outside his Texas district, the firm is "a model corporation" but does not deserve special treatment.

"I will tell you now, I wish I had a lot more of them in or near my district providing these kinds of quality jobs to my constituents. But that really becomes irrelevant," he told AFP in a telephone interview.

Gonzalez, a member of the House Energy and Commerce Committee, said the panel will ask tough questions Tuesday when it hears from James Lentz, who heads Toyota's US operations, and David Strickland, the head of the US National Highway Traffic Safety Administration (NHTSA).

"We've got a responsibility to everybody in this country, and that's the bottom line," said Gonzalez. "These are serious allegations. Let's be responsible and thorough."

On Wednesday, Toyoda is expected to face a grilling by the House Oversight and Government Reform Committee at a hearing entitled "Toyota Gas Pedals: Is the Public At Risk?"

The panel's members are likely to focus on the auto giant's sluggish response to safety issues with its accelerators, which appeared in 2007 or perhaps earlier, and failure to disclose them publicly.

Committee members could also criticise the NHTSA for what critics have called a slow response by the agency charged with protecting US consumers.

It was unclear how much Toyota's sizeable US presence, which the company says accounts directly for 33,400 jobs, could cushion the blow.

The governors of Mississippi, Kentucky, Indiana, Alabama and Texas -- where some of Toyota's 14 US plants are located -- have warned that the US government has a "conflict of interest," citing Washington's ownership of 60 percent of General Motors and eight percent of Chrysler.

The governors pointed to "good-paying jobs" and emphasized that Toyota "has not laid off a single employee" despite the recall's impact on sales, which were down 15 percent in January against the same period one year ago.

Facing rising inventory, Toyota has planned to idle a manufacturing plant in Kentucky for one to four days through April, and halt work at a Texas plant for two weeks between now and mid-April.

Workers at both plants will still draw their pay -- but some experts warn Toyota could be forced to cut jobs if sales lag over a longer period.

Still, lawmakers from states where Toyota's US competitors operate could be tempted to take a hard line on the Japanese giant, according to David Cole, president of the Center for Automotive Research.

"I would expect they would be very tough, this is an opportunity to pressure the competition of the workers in your district," he said.

And US Transportation Secretary Ray LaHood has made clear that the chief issue is safety, despite increasingly sharp criticisms of President Barack Obama over the sour economy more than one year after he took office.

"Safety is Secretary LaHood's number one priority. We take auto safety very seriously and base all decisions for investigations on the merits of the data regardless of who manufactures the vehicle," said his spokeswoman, Olivia Alair.


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