Begun, the Toyota War has…

posted at 1:00 am on February 23, 2010 by Karl

It’s officially a full-court press:

Leading Democrats on the House Energy and Commerce Committee said Monday that Toyota relied on a flawed study in dismissing the notion that computer issues could be at fault for sticking accelerator pedals, and then made misleading statements about the repairs.

The comments, from Henry A. Waxman, chairman of the committee, and Bart Stupak, a subcommittee chairman, were made in an 11-page letter to James E. Lentz III, the president of Toyota Motor Sales U.S.A. The letter was released Monday on the eve of the committee’s hearing on the Toyota recalls, one of three scheduled.

Verdict first, trial after — but it does not stop there. Toyota is now also under investigation by Securities and Exchange Commission and United States attorney’s office for the Southern District of New York.

However, as even the Detroit News concedes, uncontrolled acceleration claims have a chequered history:

Experts say the number of fatalities linked to reports of uncontrolled acceleration of Toyota vehicles — 15 when the first recall was announced, and now 34 — isn’t a big number for a company that sells close to 2 million cars and trucks a year in the United States.

Most independent auto experts and investigators say unintended acceleration is most often caused by driver error; the driver, in a moment of panic, or in an unfamiliar vehicle, may accidentally step on the wrong pedal.

Thirty years ago, Audi faced damaging complaints that its cars were prone to unintended acceleration — allegations that U.S. safety regulators now say were never proven.

Similar complaints in the late 1990s against Chrysler Corp.’s Jeep Grand Cherokee turned up no defect, said Vines, who was then working for Chrysler. The problem was either a floor mat trapping the gas pedal, or people stepping on the gas, he said.

But Toyota is increasingly facing allegations from plaintiffs’ attorneys that electronic interference with the systems in the vehicle may be causing the acceleration to go haywire.

They point to the automaker’s adoption, starting about 10 years ago, of electronic throttle control, in which the driver stepping on the gas is actually sending an electronic signal to the throttle.

Indeed, the biggest proponent of this unproven theory is Sean Kane, president of Massachusetts-based Safety Research & Strategies Inc., who will be testifying before the House on Wednesday:

Two weeks ago, his firm released a 51-page report that alleged at least 2,262 Toyota and Lexus owners have reported sudden acceleration that resulted in 815 crashes, 341 injuries and 19 deaths since 1999. About half of the complaints involved vehicles not included in any current Toyota recalls, according to the report.

Toyota said it is unable to confirm Mr. Kane’s numbers and has hired its own study firm.

Mr. Kane said his latest report wasn’t produced as a direct result of funding from a particular lawsuit against Toyota. Yet lawyers often pay him a consulting fee to review individual crashes, listen to depositions, advise lawyers on questions and strategies, and produce analyses of crash trends using National Highway Traffic Safety Administration data. He does not receive a bonus or a percentage of any settlement in such cases, he said.

In the report released last week, Mr. Kane thanked a group of lawyers who have pending cases against Toyota for sponsoring some of his research into unintended acceleration in Toyotas. Three of those lawyers—Terrence McCartney of New York; Donald Slavik of Milwaukee, Wis.; and R. Graham Esdale Jr. of Montgomery, Ala.—said Mr. Kane has helped on cases, including litigation against Toyota.

Kane got his start with the Naderite Center for Auto Safety. That group’s current executive director, Clarence Ditlow, is also scheduled to testify:

He popularized the story about “exploding” General Motors pickup trucks, which NBC subsequently had to retract. In 1993 Mr. Ditlow accused a GM lawyer of destroying evidence about the pickups; the lawyer sued for slander, and Mr. Ditlow’s insurance company (over his protests) settled for $500,000. During that case, a Detroit judge fined Mr. Ditlow for “gross misconduct” for sharing a sealed document with a plaintiffs’ lawyer suing GM. An appeals court overturned the fine, but determined that Mr. Ditlow’s outfit and the plaintiffs’ lawyer had “mutual back-scratching arrangements.” Even more explicitly, on March 8, 1994, a California judge overseeing a class action against Nissan held that Mr. Ditlow’s center had acted “in active concert with, and as agents of” two Texas trial lawyers (Mr. Ditlow’s lawyer claims the order is somehow invalid).

Another witness will be Joan Claybrook, of the Naderite Public Citizen, which — among other things — campaigns against “astroturf” lobbying, though it refuses to disclose how many millions from plaintiffs’ attorneys fund its operations.

With the deck this stacked, the New York Times chooses to focus entirely on “whether the deep financial and personal connections between lawmakers and the carmaker could taint the inquiries.” This ignores not only the ties between the Democrats and their trial attorney donors, but also the new conflict of interest arising from their takeover of General Motors. The issue was obvious to many, including Canada’s Financial Post:

The White House has denied any such motivation on the part of the United States. But that denial lacks credibility. While it may be technically true that President Obama’s team didn’t explicitly reach a decision to target Toyota, nobody in this crowd needs a presidential order to turn the Japanese auto giant’s Sudden Unintended Acceleration (SUA) problem into a national industrial advantage for the United States. The owners of union-dominated Government Motors can spot a strategic economic opportunity without waiting for the memo from head office.

California Congressman Henry Waxman swung into action, using recent anecdotal reports of sudden acceleration as a pretext for extended assaults on Toyota and its management. The UAW has joined the project as part of its campaign against Toyota’s closure of a unionized California plant.

By the way, that plant was a joint venture between Toyota and Government Motors, and is being closed because of the latter’s bankruptcy — but I digress.

The larger issue is the Obama administration’s crony capitalism, and the way it erodes trust in our government. The administration staffed up with the people who caused the financial crisis. It cut backroom deals to turn our health insurance into a public utility. And it bailed out Government Motors to aid its Big Labor muscle. Against this backdrop, when the feds start investigating the steering on Toyota Corollas and Matrixes, one wonders whether the same zeal will be given to the Chevrolet Cobalt, which has more than ten times as many NHTSA complaints.

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