Posted: 23 Feb 2010 02:03 PM PST

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Under sharp questions from Rep. Steve Buyer, R-Ind., Sean Kane said his studies of Toyota's sudden accelerations complaints were paid for by five law firms that have cases pending against Toyota.

Sean Kane and David Gilbert also said Gilbert was paid $1,800 for his study and put on a retainer of $150 an hour for expert opinion.

Buyer raised the issue of "Dateline" faking a fault in the gas tanks on GM vehicles in an attempt to prove a defect, and questioned whether Kane and Gilbert were steering their work.

"I am uncomfortable here today with some of the testimony," Buyer said.

Gilbert and Kane said their work was not influenced by the attorneys.

"I had the decision on whether to push the send button to NHTSA, contact Toyota, contact Mr. Kane," Gilbert said. "At the moment I discovered this, I was sick to my stomach."

The panel has recessed before the testimony of Lentz. Rep. Stupak gave the committee a seven-minute break after three hours of testimony.

Auto technology expert finds fault

1:05 p.m. | The committee waded into possible electronic causes of sudden acceleration.

Sean Kane, a safety advocate who has issued several reports on sudden acceleration in vehicles, echoed the committee's comments.

"The problem may be rare, but it's serious," he said. "This problem has been festering under the surface for years."

The other star of the first panel was David Gilbert, a professor of automotive technology at Southern Illinois University, who says he's managed to introduce electronic errors without the vehicle recording an error code or going into "limp-home" mode.

"My findings have shown there is a large amount of leniency in the programming that would allow a fault," Gilbert said.

Toyota issued a lengthy reply to Gilbert's testing on Monday, saying they needed to study his methods more closely.

Under questions from the committee, Gilbert said it took him about three and a half hours to find the fault, and that Toyota has not fully explored the issue with him.

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Sonic Auto Exceeds Estimates - Zacks.com

Posted: 23 Feb 2010 02:39 PM PST

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Sonic Automotive (SAH - Snapshot Report) has revealed a profit of $7.2 million or 18 cents per share (excluding special items) for the fourth quarter of 2009, in stark contrast to a loss of $10.2 million or 21 cents per share (excluding special items) in the year-ago period.

With this, the company has surpassed the Zacks Consensus Estimate of a profit of 15 cents per share. The improvement was attributable to rise in sales volumes in the company's both new and used vehicle businesses.

Total revenue for the quarter rose 10% to $1.6 billion. Of this, revenue from vehicle trade increased 12% to $1.3 billion. Meanwhile, revenue from parts, service and collision repair remained flat at $269 million and from finance, insurance and other services went up 11% to $39 million.

New Vehicle Retail

Revenue from new vehicles retail escalated 11% to $818 million. New vehicle retail units increased 4% to 24,902 vehicles. Retail margins improved 60 basis points to 7.3% from 6.7% in the year-ago quarter.

Used Vehicle Retail

Revenue from used vehicles retail appreciated 23% to $376 million. Used vehicle unit volume was up 18% to 18,711 vehicles. The company was able to achieve this by expanding its presence across the entire spectrum of the used vehicle market. However, gross margin deteriorated marginally to 7.2% from 7.3% in the year ago period.

Annual Results

Sonic Automotive posted a profit of $27.6 million or 68 cents per share in 2009. This is a decrease from a profit of $41.8 million or $1.25 per share in 2008. The profit is also a tad lower than the Zacks Consensus Estimate of 69 cents per share.

Total revenue in the year fell 12.5% to $6.1 billion. Of this, revenue from vehicle trade dipped 14% to $4.9 billion. Meanwhile, revenue from parts, service and collision repair slid 2% to $1.1 billion and from finance, insurance and other services went down 15% to $157 million.

Sonic Automotive operates as an automotive retailer, based in Charlotte, North Carolina. Its dealerships provide various services, including the sale of new and used cars, besides light trucks and replacement parts. It also provides vehicle maintenance, warranty, paint and repair services for its automotive customers. It is the nation's third-largest automotive retailer, with 153 dealership franchises.

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What Toyota Could Learn from Tiger - BNET

Posted: 23 Feb 2010 01:34 PM PST

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As I write, Toyota is under the hot lights of a Congressional hearing, and it's just the first round of a series of House and Senate investigations into what the company knows and when it knew it. How Toyota handles itself in the full glare of a federal inquiry will color its public image for many years to come.

Given that, I called Lauren Bloom, the author of The Art of The Apology: How To Apologize Effectively To Practically Anyone. Bloom is also a business ethics columnist for TheStreet.com and a frequent guest on NBC's Today Show. Is Toyota handling itself well? No, and Tiger Woods did it much better, she said.

"The company blew it by not handling it immediately and definitively when it first became an issue," she said. "Ignoring a safety problem to save money for shareholders is a lot worse than what Tiger Woods admitted he did."

After his press conference, Tiger Woods was accused of sounding wooden and scripted, Bloom said, but he mostly accepted responsibility for his actions (except for taking a swipe at the media). Toyota President Akio Toyoda, she said, "actually should have been a bit more scripted. When he sat there [before the recall] and said the company had still not decided what was going to do, that really hurt. The company now has to persuade customers that it cares."

To repair its image, Bloom said, Toyota needs to take a number of steps. "First, they have to make it right with the outstanding safety issues—really deal with them, spending what it takes to get it right." Second, it needs to apologize in a way that people accept.

In his testimony today, Toyoda tried the sincere approach. "My name is on every car," he said. "You have my personal commitment that Toyota will work vigorously and unceasingly to restore the trust of our customers." In a thoughtful touch, he also apologized to the California family that lost four members to an out-of-control Toyota. "Especially, I would like to extend my condolences to the members of the Saylor family, for the accident in San Diego," he said. "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."

But Toyoda's testimony was also vague, and said nothing about the actual cause of unintended acceleration. That was probably a mistake. With laser-like precision, Henry Waxman's Committee on Energy and Commerce is focused on showing that unintended acceleration could be caused by electronic interference.

A letter Wednesday from Waxman to Jim Lentz, president and CEO of Toyota Motor Sales U.S.A., made that plain. The Waxman letter blasted the only study Toyota has done on electronic interference (through the consulting firm Exponent Inc.) as having "serious flaws." Toyota provided 75,000 pages of documents, Waxman said, and they "appear to show that Toyota consistently dismissed the possibility that electronic failures could be responsible for incidents of sudden unintended acceleration."

Lentz also testified, and he apologized, too: "In recent months we have not lived up to the high standards our customers and the public have come to expect from Toyota," he said. "Put simply, it has taken us too long to come to grips with a rare but serious set of safety issues, despite all of our good faith efforts."

The problem is that there's still significant public doubt about the company's "good faith." And Lentz is still saying that Toyota is "confident that no problems exist with the electronic throttle control system in our vehicles." The carmaker didn't help its case when investigators uncovered an internal Power Point presentation that appeared to gloat over money saved in avoided recalls.

Meanwhile, ABC-TV has been hammering away at Toyota for the same reason, and last night aired segments asserting that a university-based researcher had identified the electronic source, and that sudden acceleration could be duplicated.

Toyota has gone on a PR offensive, bringing forth internal experts to say that it is impossible for electronic interference to produce runaway cars. But it is doubtful that such assertions will satisfy either the public. For Toyota to get past its present predicament, it will first have to fully disclose everything it knows about sudden acceleration. And, despite the reams of paper handed to Congressional investigators, that hasn't happened yet.

Asked to name examples of successful apologies, Bloom cited Johnson & Johnson, which recalled tainted Tylenol promptly and at its own expense in 1982; and Jet Blue, which generously compensated passengers stuck on the tarmac for 11 hours in 2007. But J&J's tainted Tylenol was not its fault, and Jet Blue could easily move on once it satisfied a small group of passengers. The Toyota problem is much bigger, and it's not over yet.

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JEFFREY CLYDE SAMPLES, SR. - Terrell Tribune

Posted: 23 Feb 2010 01:20 PM PST

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