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Toyota's President Apologizes For Safety Woes

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Toyota's president apologized for the automaker's global recalls and promised to beef up quality control by setting up a special committee he would head himself.

Toyota Motor Corp. President Akio Toyota said the automaker was still deciding what to do to fix braking problems with the popular Prius gas-electric hybrid.

Toyoda, grandson of Toyota's founder, was speaking at a hastily called news conference in Nagoya, Japan, late Friday, which was shown at Toyota's Tokyo office by satellite feed.

The automaker has acknowledged the new Prius that went on sale in May last year has braking problems. Toyoda did not announce a recall, but Toyota said this week it was considering one.

Criticism has been growing that Toyoda, grandson of the company's founder, has largely been invisible amid the automaker's worst crisis since it was founded.

Toyoda and Shinichi Sasaki, the executive overseeing quality, started speaking to reporters at the automaker's Nagoya office Friday evening local time, around 7 a.m. ET. Other details were not immediately available.

The only media comment up till now from Toyoda had been a brief, impromptu interview last week with Japanese broadcaster NHK on the sidelines of the World Economic Forum in Davos, Switzerland. Toyoda, 53, said he was sorry for the worries he had caused customers and insisted that Toyota cars were safe.

Toyota said this week it is considering a recall in the U.S. and Japan for its Prius gas-electric hybrid, which has been plagued with braking problems.

Nearly 200 complaints have been reported in the U.S. and Japan over such problems. Toyota said on Thursday it was a flaw in the computerized antilock brake system.

The problems with the Prius, Toyota's flagship model and symbol of its technological prowess and green car ambitions, follow a global recall announced Jan. 21 for 4.5 million vehicles with gas pedals that stick and can cause sudden acceleration.

A less-than-perfect Prius, the vehicle of choice for Hollywood movie stars like Leonardo Dicaprio, threatens to be an even more serious blow for Toyota's image than the gas pedal recall.

The brake problem has been fixed with a software programming change for Prius vehicles sold in Japan and overseas since late January but not for vehicles sold before then, according to Toyota.

The U.S. National Highway Traffic Safety Administration said it would assess the scope of the problem in the Prius and the safety risk to about 37,000 cars that could be affected. Toyota, however, has said it sold 103,000 of the new Prius in the U.S. since May last year.

The quality failures are drawing intense media scrutiny in the U.S. where Toyota is more used to winning plaudits for consumer satisfaction. But the coverage in Japan has been calmer.

The biggest story splashed across front pages of major dailies and on TV news Friday was the retirement of a well-known sumo wrestler, forced to step down for drunken behavior. Toyota news was relegated far below that.

U.S. officials have blessed Toyota's solution to the gas pedal problem, a small piece of steel designed to eliminate excess friction in the pedal mechanism, but have criticized Toyota for being too slow in responding to customer complaints.

Still, concern is bubbling among the Japanese who take pride in Toyota as an icon of the country's advanced manufacturing and see the fuel-efficient Prius as a symbol of the company's commitment to green, low-pollution vehicles.

"Trouble with the Prius means real trouble for the Toyota brand," said Ryoichi Shinozaki, a crisis management expert at Kyodo Public Relations Co.

"It is a symbol of its commitment to ecology. It lies at the heart of Toyota's new successful business that was defined differently from its past success," he said.

Shinozaki believes Toyota has yet to fully recognize the magnitude of the crisis that has hit.

In Japan, protocol requires an executive to bow deeply and hold that position for at least five seconds to apologize for causing a ruckus, even if a company has done nothing wrong, he said. Toyota executives who explained the quality problems this week in Japan held their heads up high.

Toyota then played down the fix on Prius cars carried out since last month as merely part of a routine improvement program, raising questions about its commitment to the company motto of putting customers first.

Toyota is also investigating possible brake problems with its luxury Lexus hybrid and the Sai compact sedan, both of which use the same brake system as the Prius. Toyota has not received any complaints about the Lexus HS250h and the probe is to ensure safety, she said. The Sai is not sold outside Japan.

Koji Endo, managing director of equity research firm Advanced Research Japan Co. in Tokyo, said Prius is so integral to Toyota's identity that even if financial damage from the latest woes turns out to be small, brand damage would be devastating.

"For Toyota's long-term strategy in the green car field, this is a symbol," said Endo. "This symbol car, one of its best selling models, is defective. That's obviously going to raise big questions among the public."

Congressional investigators expanded their review of Toyota to include the Prius as California Rep. Darrell Issa, the ranking Republican on the House Oversight Committee, asked Toyota for records on its Prius brakes.

The committee plans a hearing next week on Toyota's recalls, the first of two in Congress this month. Issa said he would focus on whether Toyota or NHTSA failed to properly deal with safety complaints or address them quickly enough.

"We think they should have acted more aggressively or quickly," said Issa, who owns four Priuses, none of which fall under the investigation.

Some drivers remained loyal.

Toshimitsu Tanimura, a cab driver whose company's fleet includes 94 Priuses, vows by the hybrid and has never heard of the brakes failing.

"The engine is so quiet without any strange shaking," he said.

Toyota said some Prius drivers have complained of an inconsistent feel during slow and steady application of brakes on rough or slick roads when the antilock brakes engage. Normally, the brakes grab and release rapidly in reaction to slipping tires.

Paul Nolasco, a Toyota spokesman in Japan, said the time lag drivers feel before brakes kick in stems from the two systems in a gas-electric hybrid - the gas-engine and the electric motor. The brakes work if the driver keeps pushing the pedal, he said.

NHTSA said some Prius owners reported a "brief lag" or "brief surge" when they used the brakes. The agency did not specify how long those lags were. At highway speeds, a car can travel nearly 100 feet (30 meters) in just one second. The problem is suspected in four crashes resulting in two minor injuries, according to a preliminary NHTSA safety report.

Prius is not Toyota's biggest seller - the company sold 140,000 in the U.S. last year, far less than the 357,000 Camrys — but holds a cherished spot in its lineup.

The complexity of the Prius, a highly computerized car, has led to problems in the past. In 2005, the company repaired 75,000 of them to fix software glitches that caused the engine to stall. It has also had trouble with headlights going out.

Glitches ordinarily don't prove to be public relations disasters for Toyota. But analysts said Toyota may be forced to take decisive action like issuing a recall because of the intense scrutiny it now faces from regulators and customers.

"People are hypersensitive right now," said Erich Merkle, president of U.S. consulting company Autoconomy.com. "I don't know how they will be able to work around this without doing a recall."

This program aired on February 5, 2010. The audio for this program is not available.

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