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2010-02-11

As Toyota Recall Surpasses 10 Million Cars, Federal Regulators Faulted for Slow Response to Early Warnings

Guests

Joan Claybrook, consumer advocate who headed the National Highway Traffic Safety Administration from 1977 to 1981. Up until last year she was the president of Public Citizen.

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Since last fall, the auto giant Toyota has recalled about ten million cars worldwide because of defects that can cause runaway acceleration or braking problems. Questions are being raised over why it took federal regulators so long to force Toyota to take action. We speak to longtime consumer advocate Joan Claybrook, the former head of the National Highway Traffic Safety Administration and the group Public Citizen. [includes rush transcript]

Transcript

This is a rush transcript. Copy may not be in its final form.

JUAN GONZALEZ: Federal auto safety regulators are coming under scrutiny this week over their handling of the safety concerns with several Toyota models. Since last fall, the Japanese automaker has recalled about ten million cars worldwide because of defects that can cause runaway acceleration or braking problems.

Questions are being raised over why it took federal regulators so long to force Toyota to take the action. Earlier this week, the insurance giant State Farm revealed that it had alerted the National Highway Traffic Safety Administration as early as 2007 about safety issues with certain Toyota models. The Detroit Press reports that in 2003 as many as twenty-seven Toyota owners alerted federal regulators about their cars surging unexpectedly and, in some instances, accelerating even more after they stepped on their brakes. Not once since the first complaints were filed did the National Highway Traffic Safety Administration subpoena records from Toyota.

AMY GOODMAN: Congress had scheduled hearings to probe not just Toyota but the response from federal regulators for this week, but the hearings were postponed due to the snowstorm. One of those scheduled to testify was longtime consumer advocate Joan Claybrook. From 1977 to 1981, she headed the National Highway Traffic Safety Administration. Up until last year, she was the president of Public Citizen. Joan Claybrook joins us now from Washington, DC.

Tell us what would you have testified before Congress, Joan.

JOAN CLAYBROOK: Well, my major concerns have been, one, that Toyota didn’t undertake these recalls when it should have. Toyota has known about this problem — several problems, actually, since the — oh, I’d say about 2004, that lawsuits were filed against them by that time, and when lawsuits are filed against major companies like Toyota, they go into great detail to find out what’s going on. So the company knew for a number of years. And the National Highway Traffic Safety Administration also knew, because it got some excellent complaints from consumers. It opened six investigations; it closed six investigations. And the only result was small recall by Toyota. I believe it was in 2007. And it was only 55,000 vehicles. And Toyota said, “Well, we’ve addressed this issue,” and the agency was satisfied.

What concerns me is that National Highway Traffic Safety Administration has tremendous authority to do its job. It is underfunded. It is understaffed. But it has subpoena power. It could go after the company. It could go after the dealers, the suppliers. It has a test facility in Ohio, where I believe it did do a test or two, but it didn’t really find any particular problem and ended up closing its investigation. It could hire consultants, the best in the world. Worldwide, it could hire people to help them with this issue. And also, it can go to trial lawyers. It can ask their experts. It can put out consumer bulletins, ask people to let them know what’s going on. So they really did sort of pro forma investigations, and as a result of both Toyota and the National Highway Traffic Safety Administration’s inactions, people have been injured and killed, and the problem was not resolved until right now.

JUAN GONZALEZ: Well, Joan Claybrook, what about the public disclosure issues here? When the Highway Administration did these small investigations, did they publicize them at all? Did they produce a public notice on them? And what about the insurance companies themselves? Obviously, they are at risk, in terms of expenditures for these kinds of accidents. Didn’t they blow the whistle and say, “Hey, we’re getting a lot more claims than people realize”?

JOAN CLAYBROOK: Well, the work that the agency does is made public when it opens an investigation. In fact, it didn’t really open formal investigations, except one. It was mostly just researching and trying to figure out what was going on and then closing them. So there wasn’t any real publicity about it, so the public didn’t know.

In terms of the insurance industry, State Farm, which is the largest insurance company in America, did alert the agency that it had noticed some problems with sudden acceleration in Toyota, and it did it for several years. And the agency, quote, “took that into account,” it says, but they didn’t require Toyota to do very much.

And in addition, the one recall that Toyota did was a floor mat recall. This floor mat recall was tiny, but it finally, in October, filed papers with the Department of Transportation and said that it was going to recall 3.8 million vehicles for floor mat problems, where the floor mat gets stuck on the accelerator, but that it did not admit that it was a safety-related defect. And so, here we have a situation where the company would not even acknowledge that it had a problem. Yet, I think that it’s more than just a floor mat, because a number of crashes have occurred where the floor mat’s not even in the car and the accelerator jams to the floor. It’s an incredibly dangerous type of defect. It’s the kind that DOT and the company should have been right on top of and alerting the public. I think that Toyota did not want to admit that it had an electronics problem, which I believe is what’s going on here. And in part I believe that, because one of the things that they’re doing when you bring your car back to get a new car mat — floor mat is that they are putting in an electronic break override system into your car — it’s a software change — so that if there’s a competition between the brake and the accelerator, the brake will be superior and will stop the vehicle.

AMY GOODMAN: Transportation Secretary Ray LaHood appeared on ABC’s Good Morning America Wednesday. He was questioned by George Stephanopoulos.

    GEORGE STEPHANOPOULOS: But, Mr. Secretary, did it take too long, going — if you go back several years, there have been complaints going back to 2004. And one of the complaints you hear is that the agency is just too cozy with the companies. You’ve got this kind of revolving door, a problem where people leave the agency and then go work for the auto companies, and they tended to curtail or slow down investigations.

    RAY LaHOOD: George, our people went to Japan. Our safety people went to Japan and met with the Toyota people and said, “Look it. We’ve got some big issues here. We’ve done some investigations, and you need to fix your cars, whether it’s the sticky peddle or whether it’s the floor mat issue.” And I was on the phone with Mr. Toyota about ten days ago, and I told him that he really needed to start paying attention to these safety issues. And I think our safety people have been on twenty-four/seven with these folks and really held their feet to the fire, and we will continue to do that.

AMY GOODMAN: That’s Transportation Secretary Ray LaHood, speaking to George Stephanopoulos. Joan Claybrook, your response?

JOAN CLAYBROOK: Well, my response is that since Secretary LaHood learned about this in November, I think that he’s been very tough and pushed hard to get Toyota to do these recalls.

What I’m talking about is the period from 2004 to 2010 and why the agency was not Johnny-on-the-spot but was really just very lackadaisical about it. And it is true that two former employees, engineers, of the enforcement office at the National Highway Traffic Safety Administration did go to Toyota. They still work there. And one of them, a guy named Santucci, was in charge of persuading the agency to narrow the scope of its investigations, so that the company did not have to supply certain kinds of documents and information. And the problem here is not only that the agency is underfunded, but that there’s a huge imbalance of knowledge and resources between a company like Toyota and the government agency. And that’s why the government agency needs to use subpoena power, so that the company knows that if they don’t give all the documents, relevant documents, to the agency, that some executives could go to jail.

And the other thing is that there are no criminal penalties for covering up a defect, and the amount of the civil penalty is only $16.4 million, which is chump change to Toyota, that that civil penalty needs to be $100 million to $200 million, so the company knows it’s going to get a real civil penalty if it doesn’t recall dangerous vehicles.

JUAN GONZALEZ: Joan Claybrook, what about the revolving door between the regulatory agencies of government that have to do with the automobile industry and the industry itself, people going back and forth from one job to the other? Could you talk about that?

JOAN CLAYBROOK: Well, there are probably twenty former agency officials from the National Highway Traffic Safety Administration at the highest levels, from administrators, deputy administrators, chief counsels, attorneys, and then also engineers, at a lower level, who have gone to work for major auto companies and been their advocates on issues dealing with auto safety and fuel economy.

And there are rules for the highest-level officials not being able to do certain kinds of work for the companies, if they had handled certain matters at DOT. But for the engineers, they can pretty much go from one day working at the agency and the next day working for the company. And in the case of Toyota, they hired two talented engineers who had been helping them keep these particular safety problems from being required to be — these vehicles from being recalled by the government.

AMY GOODMAN: You also have the situation not only of Toyota that’s recalled something like close to ten million cars now, but Honda with problems with the passenger-side air bag, recalling up to a million now. How serious is that, Joan?

JOAN CLAYBROOK: Well, the Honda problem is also very serious. It’s that the air bag comes out with too much force, and that can cause harm. I believe there’s been one death. So it hasn’t been something that has been as dangerous, just in terms of numbers, as the Toyota sudden acceleration. But it’s an old vehicle; it’s 2000, 2001, 2002 vehicles at Honda. And I’m surprised that they didn’t recall them sooner. This is now the third portion of that recall. In other words, they recalled some — a smaller number, then a large number, now a largest number. And I’m happy that they went ahead and did that voluntarily. I think it’s the kind of thing that’s very hard to identify for the agency, because you have to look at a particular crash and see whether or not — evaluate it to see whether or not the air bag worked properly.

But these recalls should be done much more promptly, and the public is at risk if the recalls are not carried out. And the fact that Toyota, still in November — October, November — said that it’s not a safety-related recall, when the sudden acceleration occurs and the accelerator jams to the floor and the brakes can’t stop the vehicle, is ludicrous.

AMY GOODMAN: Joan, we want to thank you for being with us. But I do have a weather question for you since you are in Washington, DC. You’re joining us on the telephone, not in a studio. So what’s it like in the nation’s capital?

JOAN CLAYBROOK: Well, the sky is blue, the sun is shining. It’s absolutely gorgeous. There is a ton of snow every place. The snowplows have hit the major highways, but not the side roads yet. And even before the snow came yesterday, it was — some of the roads were still — major roads — were still very difficult, like Massachusetts Avenue was, had snow clumps and ice clumps all over it, and yet Wisconsin Avenue was great. So it’s very iffy still for people to get around. It’s a huge amount of snow. And, of course, if we get two inches of snow in Washington, everyone retreats and doesn’t like to go out. So, for us to deal with twenty, thirty inches of snow is horrific.

AMY GOODMAN: Well, Joan Claybrook, thanks very much. I think tomorrow we’re going to take on the issue of global warming and the intensity of blizzards that we’ve been experiencing here. Joan is a longtime consumer advocate, former president of Public Citizen, and from 1977 to 1981 she headed the National Highway Traffic Safety Administration.

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