House committee releases Toyota execs' opening statements for tomorrow's hearing

The Congressional hearings entitled "Response by Toyota and NHTSA to Incidents of Sudden Unintended Acceleration" may have started today, but the actual response by Toyoda – that's Akio Toyoda with a "D," head of the Japanese automaker – will come tomorrow.

If you plan on tuning in to see what interesting new information comes out in Toyoda's testimony, please allow us to direct you to his prepared testimony after the break. There you'll read about three separate topics, according to Toyoda: "Toyota's basic philosophy regarding quality control, the cause of the recalls, and how we will manage quality control going forward."

Perhaps the most telling part of Toyoda's testimony comes at the very end:
My name is on every car. You have my personal commitment that Toyota will work vigorously and unceasingly to restore the trust of our customers.
Remember too that Toyota Motor Sales U.S.A. President Jim Lentz will also go before the committee, where he's expected to reiterate that electronic problems are not the cause of the automaker's unintended acceleration woes.

Both Toyoda and Yoshimi Inaba's (Chairman and CEO of Toyota Motor Sales) comments are available after the jump. Both are suscint and to-the-point, but the real fireworks will happen during the questioning period at tomorrow's hearing.

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[Source: Committee on Oversight and Government Reform | Image: Yoshikazu Tsuno/AFP/Getty] PREPARED TESTIMONY OF AKIO TOYODA PRESIDENT, TOYOTA MOTOR CORPORATION


FEBRUARY 24, 2010

Thank you Chairman Towns.

I am Akio Toyoda of Toyota Motor Corporation. I would first like to state that I love cars as
much as anyone, and I love Toyota as much as anyone. I take the utmost pleasure in offering
vehicles that our customers love, and I know that Toyota's 200,000 team members, dealers, and
suppliers across America feel the same way. However, in the past few months, our customers
have started to feel uncertain about the safety of Toyota's vehicles, and I take full responsibility
for that. Today, I would like to explain to the American people, as well as our customers in the
U.S. and around the world, how seriously Toyota takes the quality and safety of its vehicles. I
would like to express my appreciation to Chairman Towns and Ranking Member Issa, as well as
the members of the House Oversight and Government Reform Committee, for giving me this
opportunity to express my thoughts today.

I would like to focus my comments on three topics – Toyota's basic philosophy regarding quality
control, the cause of the recalls, and how we will manage quality control going forward.
First, I want to discuss the philosophy of Toyota's quality control. I myself, as well as Toyota,
am not perfect. At times, we do find defects. But in such situations, we always stop, strive to
understand the problem, and make changes to improve further. In the name of the company, its
long-standing tradition and pride, we never run away from our problems or pretend we don't
notice them. By making continuous improvements, we aim to continue offering even better
products for society. That is the core value we have kept closest to our hearts since the founding
days of the company.

At Toyota, we believe the key to making quality products is to develop quality people. Each
employee thinks about what he or she should do, continuously making improvements, and by
doing so, makes even better cars. We have been actively engaged in developing people who
share and can execute on this core value. It has been over 50 years since we began selling in this
great country, and over 25 years since we started production here. And in the process, we have
been able to share this core value with the 200,000 people at Toyota operations, dealers, and
suppliers in this country. That is what I am most proud of.

Second, I would like to discuss what caused the recall issues we are facing now. Toyota has, for
the past few years, been expanding its business rapidly. Quite frankly, I fear the pace at which
we have grown may have been too quick. I would like to point out here that Toyota's priority
has traditionally been the following: First; Safety, Second; Quality, and Third; Volume. These

priorities became confused, and we were not able to stop, think, and make improvements as
much as we were able to before, and our basic stance to listen to customers' voices to make
better products has weakened somewhat. We pursued growth over the speed at which we were
able to develop our people and our organization, and we should sincerely be mindful of that. I
regret that this has resulted in the safety issues described in the recalls we face today, and I am
deeply sorry for any accidents that Toyota drivers have experienced.

Especially, I would like to extend my condolences to the members of the Saylor family, for the
accident in San Diego. I would like to send my prayers again, and I will do everything in my
power to ensure that such a tragedy never happens again.

Since last June, when I first took office, I have personally placed the highest priority on
improving quality over quantity, and I have shared that direction with our stakeholders. As you
well know, I am the grandson of the founder, and all the Toyota vehicles bear my name. For me,
when the cars are damaged, it is as though I am as well. I, more than anyone, wish for Toyota's
cars to be safe, and for our customers to feel safe when they use our vehicles. Under my
leadership, I would like to reaffirm our values of placing safety and quality the highest on our list
of priorities, which we have held to firmly from the time we were founded. I will also strive to
devise a system in which we can surely execute what we value.

Third, I would like to discuss how we plan to manage quality control as we go forward. Up to
now, any decisions on conducting recalls have been made by the Customer Quality Engineering
Division at Toyota Motor Corporation in Japan. This division confirms whether there are
technical problems and makes a decision on the necessity of a recall. However, reflecting on the
issues today, what we lacked was the customers' perspective.

To make improvements on this, we will make the following changes to the recall decision-
making process. When recall decisions are made, a step will be added in the process to ensure
that management will make a responsible decision from the perspective of "customer safety
first." To do that, we will devise a system in which customers' voices around the world will
reach our management in a timely manner, and also a system in which each region will be able to
make decisions as necessary. Further, we will form a quality advisory group composed of
respected outside experts from North America and around the world to ensure that we do not
make a misguided decision. Finally, we will invest heavily in quality in the U.S., through the
establishment of an Automotive Center of Quality Excellence, the introduction of a new position
– Product Safety Executive, and the sharing of more information and responsibility within the
company for product quality decisions, including defects and recalls.

Even more importantly, I will ensure that members of the management team actually drive the
cars, and that they check for themselves where the problem lies as well as its severity. I myself
am a trained test driver. As a professional, I am able to check on problems in a car, and can
understand how severe the safety concern is in a car. I drove the vehicles in the accelerator pedal
recall as well as the Prius, comparing the vehicles before and after the remedy in various
environmental settings. I believe that only by examining the problems on-site, can one make
decisions from the customer perspective. One cannot rely on reports or data in a meeting room.

Through the measures I have just discussed, and with whatever results we obtain from the
investigations we are conducting in cooperation with NHTSA, I intend to further improve on the
quality of Toyota vehicles and fulfill our principle of putting the customer first.
My name is on every car. You have my personal commitment that Toyota will work vigorously
and unceasingly to restore the trust of our customers.

Thank you.



Chairman Towns, Ranking Member Issa, members of the Committee, thank you for inviting me to testify today. My name is Yoshimi Inaba, and I am the President and COO of Toyota Motor North America and Chairman and CEO of Toyota Motor Sales, U.S.A., Inc.
As you heard today from Toyota President Akio Toyoda, and as the Subcommittee on Oversight and Investigations heard yesterday from Jim Lentz, President and Chief Operating Officer of Toyota Motor Sales, U.S.A., Toyota is taking decisive steps to restore the trust of the tens of millions of Americans who purchase and drive our vehicles.

Our 172,000 team members and dealers across North America are making extraordinary efforts to complete our current recalls as quickly and conveniently as possible. We have rigorously tested our solutions and are confident that with these repairs, Toyota vehicles will remain among the safest on the road today. We are also going further, by installing advanced brake override systems in all of our new North American vehicles before the end of 2010 and in an expanded range of existing models as a customer confidence measure, and taking comprehensive steps to ensure strict quality control and increased responsiveness to our customers and regulators in the future.

As you have heard, Mr. Toyoda is leading a top to bottom review of our global quality control processes, and will seek input from independent safety experts to ensure that our processes meet or exceed industry standards. As head of Toyota's North American operations, I will be closely involved in this review. Working with our new Chief Quality Officer for North America, I also will take responsibility for ensuring that we improve our dialogue with U.S. safety regulators and that we take prompt action on any issues we identify to ensure the safety of American drivers.

In inviting me to testify today, the Committee asked me to address several issues with regard to our recent recalls. Let me summarize my answers here:

Our recent recalls address five separate issues that we have identified with certain Toyota vehicles. In total, some 5.3 million vehicles across 14 models are affected by one or more of these recalls in the United States.

The biggest recalls are for solutions our engineers have developed with regard to two specific mechanical causes of unintended acceleration. One involves all-weather or inappropriate accessory floor mats that when loose or improperly fitted can entrap the accelerator pedal. The other concerns accelerator pedals that can, over time, grow "sticky" with wear in rare instances. The solutions we have developed for both these issues are effective and durable.

With respect to possible accelerator pedal entrapment by the floor mats, Toyota recently designed a vehicle-based change that directly addresses the problem and announced the solution to the public in November 2009 as part of the safety campaign announced on September 29, 2009. Owners of affected vehicles can, in the meantime, drive safely by ensuring that they use only properly secured, appropriate floor mats.

With respect to sticking accelerator pedals, Toyota announced a safety recall in the United States in January to address this issue. The sticking condition does not occur suddenly and if it does, the vehicle can be controlled with firm and steady application of the brakes. We are confident that vehicles whose drivers are not experiencing any issues with their accelerator pedal are safe to drive, and Toyota dealers are rapidly completing the repairs on our customers' vehicles.
In both of these cases, Toyota thoroughly and carefully evaluated the technical aspects of these issues. However, we now understand that we must think more from a customer first perspective rather than a technical perspective in investigating complaints, and that we must communicate faster, better and more effectively with our customers and our regulators. Our recent, smaller voluntary recalls of certain 2010 Prius and Lexus HS hybrids for a software update to the braking system, certain 2010 Camry cars to inspect a power steering hose, and certain 2010 Tacoma trucks to inspect the front drive shaft all illustrate this new approach.

Chairman Towns, Ranking Member Issa and members of the Committee, I assure you that nothing matters more to Toyota than the safety and reliability of the vehicles our customers drive. We are committed not only to fixing vehicles on the road and ensuring they are safe, but to making our new vehicles better and even more reliable through a redoubled focus on putting our customers first.

Thank you.

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