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COMMENT: No regulatory respite for Toyota

By Simon Warburton | 11 May 2010

Toyota Motor Corporation must feel it is being pursued to the ends of the earth at the moment.

US transportation secretary Ray LaHood has been visiting the headquarters in Japan - and its president Akio Toyoda - as he seeks to personally reassure himself the automaker's much-vaunted improvement programme really is taking shape.

And today (11 May) TMC unveiled a sparkling set of numbers - that despite the catastrophic hit of U$1.83bn it took from its massive global recall - delivered underlying growth that should see it slowly return to healthy profit.

The numbers coming from Tokyo today are no small beer. To turn around a vast loss the previous year of JPY461bn to an operating profit of JPY147.5bn is nothing short of astonishing.

And that in the teeth of a $1.8bn impact from its recall of more than 8m cars worldwide - it's a truly colossal achievement, though the financial effects won't really begin to bite until the first quarter of next fiscal year at the earliest.

But now comes news the US Department of Transportation's National Highway Traffic Safety Administration (NHTSA) has opened an investigation into whether, in 2005, TMC notified the agency of a Hilux pickup truck steering relay rod safety defect within five business days of learning of its existence, as required by American law.

The issue relates to a previous Hilux truck recall that originated in Japan but the NHTSA is questioning whether Toyota met its legal obligation to conduct what it says is "a timely recall of vehicles with the defect in the US."

The NHTSA said there had been a number of complaints filed with Toyota by US consumers before the 2004 Hilux recall in Japan, and is now investigating.

And there's a questioning tone in LaHood's comments on the matter: "Safety is our number one priority and we take our responsibility to protect US consumers seriously," he said.

"With new assurances from Toyota about their efforts to improve safety, I hope for their cooperation in getting to the bottom of what happened."

It's that "with new assurances" phrase from LaHood that must have TMC twitching in Tokyo. The manufacturer has outlined a comprehensive quality improvement plan, including specially tasked executives and committee, but is constantly looking over its shoulder for anything and everything that might come up.

LaHood's comments csme after automakers' quality and manufacturing processes came under scrutiny as the US Senate and House of Representatives grilled top Toyota officials on Capitol Hill. It's LaHood who publicly talked of "holding Toyota's feet to the fire".

The Japanese giant is squarely in the NHTSA's sights like never before. It can deliver the most extraordinary set of gravity-defying numbers all it likes but, as long as there remains any hint that safety is an issue, it will have to explain itself yet again.