plus 3, Toyota's other pedal problem: Lawsuits - YAHOO!

Toyota's other pedal problem: Lawsuits - YAHOO!
Toyota to start fixing faulty US pedals after mass recall - YAHOO!
CORRECTED: All eyes on Toyota for January U.S. auto sales - Reuters
All eyes on Toyota for January U.S. auto sales - Yahoo Finance

Toyota's other pedal problem: Lawsuits - YAHOO!

Posted: 01 Feb 2010 02:15 PM PST

NEW YORK (Reuters) – Toyota Motor Corp is facing a growing number lawsuits from consumers who complain their vehicles suddenly accelerate or may do so, and want the world's largest automaker to pay for it.

Last week, Toyota stopped selling eight models in the United States and Canada, including its popular Camry and Corolla, because of possible unintended acceleration.

Some 8 million vehicles are up for repair worldwide over problems including alleged faulty accelerator pedals made by the supplier CTS Corp, and the possibility that floor mats could jam the accelerator pedal.

Other recalled Toyota vehicles are the Avalon, Highlander, Matrix, RAV4, Sequoia and Tundra.

The problems have tarnished Toyota's reputation for making some of the most reliable vehicles on the road. It is the most prominent auto safety issue since reports surfaced in 2000 that many Firestone tires mounted on Ford Explorers failed.

"Liability for Toyota could run in the billions of dollars, because of the number of vehicles involved and the fact there are serious injury and death claims," said Gary Robb, a partner at Robb & Robb LLC in Kansas City, Missouri. He said his firm has fielded inquiries from consumers and may sue Toyota.

The U.S. National Highway Traffic Safety Administration says it has no proof that anyone was injured by a stuck pedal. It said it has confirmed to its satisfaction that five people have died as a result of floor mat entrapment.

Since November, at least 10 lawsuits seeking class-action status have been filed against Toyota in U.S. courts and in the Ontario Superior Court of Justice in Canada.

It is possible that some U.S. litigation could be combined because the claims are similar and it would be too unwieldy to try cases one owner at a time.

Toyota on Monday had no immediate comment on the lawsuits.

NEW LAWSUITS

Legal experts said drivers might have more difficulty recovering if they cannot show their cars actually experienced sudden acceleration. Fear it could happen may not be enough.

"In a significant majority of states, there is no remedy for mental upset and fright, absent a consequential injury to people or property caused by the defect," said Frank Henderson, a Cornell Law School professor and product liability expert.

David Owen, a law professor at the University of South Carolina and director of its Office of Tort Law Studies, said Toyota might be more at risk in U.S. states that impose on manufacturers of a "duty to warn" consumers about a defect.

"The grounds to sue are that there was a design defect, regardless of what Toyota may do to mop up the consequences, and the possibility that a post-sale warning was delayed too long," he said.

"If it turned out that Toyota delayed the recall beyond the point when a reasonable manufacturer would have done so, then punitive damages in substantial amounts might be available to whoever was physically injured," Owen added.

Some plaintiffs are expected to seek recovery for an expected loss of resale value tied to the stigma from the recalls, though Owen said courts are generally "unresponsive" to such claims, including in Firestone tire lawsuits.

Others may seek to recover for expenses tied to the recall, including lost work hours and the cost of finding alternative transportation while their vehicles are being fixed.

POSSIBLE STIGMA

Four of the most recent lawsuits were filed on Friday.

In a federal lawsuit filed in Corpus Christi, Texas, the plaintiffs Albert and Sylvia Pena alleged that their 2008 Toyota Avalon unexpectedly accelerated at least twice, and on January 14 caused a collision at a stop sign.

"Toyota has long known about the defect with their throttle control, and has done too little, too late to correct it," said Robert Hilliard, a lawyer representing the Penas.

Three other federal lawsuits were filed in New Orleans on behalf of Avalon and Camry owners. These plaintiffs' lawyers were unavailable for comment.

Robb said Toyota might learn from Johnson & Johnson's 1982 withdrawal of Tylenol from stores, after seven people died from ingesting medicine spiked with cyanide.

The crime was never solved, but the company's response, including the introduction of tamper-resistant packaging, is considered a textbook example of how to handle recalls.

"They saved not only their public image, but that brand," Robb said. "There are real doubts as to whether Toyota's brand, from a PR standpoint, can survive this (recall) intact. This has dragged on too long and there have been too many excuses."

(Reporting by Jonathan Stempel; Additional reporting by Soyoung Kim, Kevin Krolicki and Bernie Woodall in Detroit)

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Toyota to start fixing faulty US pedals after mass recall - YAHOO!

Posted: 01 Feb 2010 12:49 PM PST

CHICAGO (AFP) – Toyota said Monday it will start fixing faulty gas pedals this week after mass recalls dented its reputation and prompted competitors to challenge the world's top car maker.

Toyota's US unit said the Japanese company had "developed and rigorously tested" a fix for accelerator pedals in faulty models and had also come up with "an effective solution" for vehicles currently in production.

"The heat's on right now to execute this plan," Jim Lentz, president of Toyota Motor USA, said in a conference call with reporters.

"We know what's causing the sticking accelerator pedals, and we know what we have to do to fix it."

Parts were already being shipped to US dealers, many of whom will be extending their hours in order to speed the repairs of the millions of vehicles affected by the recall.

Canadian dealers will also begin repairs this week while European dealers will receive the parts next week, Toyota said.

Production of the eight models affected will resume on February 8 at factories in the United States and Canada after a brief suspension.

US sales of those popular models will resume once dealers have time to apply the fix to vehicles on their lots, Toyota said, adding that fixing vehicles already on the road will be the first priority.

It was not immediately clear when Toyota would begin to repair recalled vehicles in China.

Toyota pulled up to 1.8 million vehicles in Europe on Friday, the latest in a series of accelerator-related recalls that has affected more than 7.6 million Toyota cars worldwide -- nearly its entire 2009 global sales of 7.8 million vehicles.

"The timing of it for them is terrible," said Rebecca Lindland, an analyst at IHS Global Insight.

Toyota's competitors already had a significant amount of momentum after making major cuts and revamping their product portfolio following the industry's worst downturn in decades, she told AFP.

And a number of competitors, including General Motors and Ford, immediately launched incentive programs to try to lure customers away.

"They (Toyota) still have a long road ahead of them," Lindland said.

After days of keeping top executives out of the spotlight, Toyota went into damage-control mode Monday by announcing a "comprehensive plan" to fix the problem.

"I want to sincerely apologize to Toyota owners," Lentz said in a video released on YouTube.

"Toyota has always prided itself on building high quality, durable cars that customers can depend on and I know that we have let you down."

The company said that in rare cases, the pedal mechanism could become worn and harder to depress, or get stuck in a partially depressed position.

Toyota engineers have developed a "spacer" to add to the pedal mechanism in order to increase the tension in a spring and reduce the risk of the pedal staying down.

They also redesigned the pedals so new vehicles will not need the spacer.

The "sticky" pedal defect follows a more serious recall: unexpected, sudden acceleration which Toyota said is caused by floor mats getting stuck under the pedal.

Toyota has come under criticism for failing to act quickly on that problem, which federal safety regulators said first came to light in 2007 and has been linked to 19 deaths in the United States.

Concerns have also been raised that the problem could be electrical rather than mechanical.

But Lentz insisted that Toyota had moved quickly to deal with both problems and said customers still "have faith in us."

He said he was confident that the fix in place would work.

"We have tested it. Outside agencies have tested it. There are fail-safe mechanisms within the electronics, so we're confident it's not an electronics issue," Lentz told CNBC.

Toyota, which overtook General Motors in 2008 as the top-selling automaker, has been beset by a series of safety issues that critics say raise questions about whether it sacrificed its legendary quality to become number one.

Canadian drivers and passengers of Toyota vehicles filed a class action lawsuit Monday against the Japanese automaker over defective throttles that led to mass recalls.

Also on Monday, France's PSA Peugeot Citroen said it would recall 97,000 Peugeot 107s and Citroen C1s made in a Czech factory it shares with Toyota as a precautionary measure.

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CORRECTED: All eyes on Toyota for January U.S. auto sales - Reuters

Posted: 01 Feb 2010 01:39 PM PST

DETROIT (Reuters) - Toyota Motor Corp's massive recall and sales halt of its best-selling vehicles will overshadow an expected industry increase in U.S. auto sales for January over the deeply depressed month a year ago.

Toyota is expected to post a sharp drop in sales after it shut down sales of its most popular vehicles in the last week of January, including North American-built Camrys and Corollas, amid its recall of 2.3 million vehicles tied to faulty accelerator pedals.

Analysts expect Toyota's woes to result in sales and market share increases by its largest competitors in the U.S. market including General Motors Co, while it remains unclear how deeply the sales shutdown will run into the February sales period for Toyota, No. 2 in U.S. auto sales behind GM.

Toyota said on Monday it has found the remedy to fix potentially sticky accelerator pedals in the recalled vehicles, but it is expected to take some time to complete repairs.

"Frankly, I think this is going to impact their entire quarter," said IHS Global Insight analyst Aaron Bragman. "It means opportunity for the rest of the industry. Toyota is wounded and rivals are going to go after it as much as they can."

GM, Ford Motor Co, Chrysler Group and Hyundai Motor Co offered incentives to lure Toyota customers.

Autoconomy analyst Erich Merkle believes Honda Motor Co Ltd may benefit the most from Toyota's crisis as U.S. customers frequently cross-shop the two Japanese automakers. Ford and Hyundai also could be big beneficiaries, he said.

David Sargeant, vice president of automotive research at J.D.Power & Associates, said the sales shutdown would have "significant" impact in the short term, with Toyota likely to lose a few percentage points of market share in February. Toyota had a 17 percent U.S. market share in 2009.

"The bigger issue is what's the longer term impact on their reputation and how that will affect sales going forward. What we know is that Toyota's sales are very heavily dependent on reputation for quality and safety," Sargeant said.

"This is particularly a bad time for Toyota because the industry will be picking up and now a lot of that benefit is going to go to the other competitors."

Assuming buyers move to competitors with similar vehicles, Barclays Capital sees short-term market share gains for GM, Honda, Ford, Nissan and Hyundai.

FORD, GM SEE DOUBLE-DIGIT GAINS

Analysts and industry executives expect sales of 10.5 million to 11 million units in January on an annualized basis, up from the 9.6 million rate a year earlier. Sales fell below the 10 million unit annualized rate in January 2009 for the first time since 1982 amid a deep economic downturn.

But the results are expected to be down from 11.2 million units in December, when automakers posted a 15 percent sales increase from the prior year, supported by year-end incentives that helped drive retail sales.

"There's no question that the worst is behind us. There's no question about that and that we're into a period of expansion," Ford sales analyst George Pipas said.

"This is probably not going to be the kind of recovery that is nice and linear," Pipas said. "We're going to see fits and starts for the consumer."

He said Ford expected to post a double-digit percentage sale gain, led by a surge in sales to fleet operators propelled by car rental agencies.

GM sales analyst Mike DiGiovanni also forecast a double-digit increase in its January U.S. sales, stronger than an estimated 5-10 percent rise in industrywide sales.

U.S. industry light vehicle sales are expected to come in at 10.7 million to 11 million units on a seasonally adjusted annualized rate, DiGiovanni told reporters on Thursday.

Automakers are expected to post a steep drop in retail sales in January, always seen as a slow month for the industry.

That is likely to be offset by a strong rebound in fleet sales, which were pummeled last year after financing dried up and businesses pulled back on spending in the wake of the U.S. banking bailout.

(Reporting by David Bailey and Soyoung Kim, editing by Matthew Lewis)

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All eyes on Toyota for January U.S. auto sales - Yahoo Finance

Posted: 01 Feb 2010 01:39 PM PST

By Soyoung Kim and David Bailey

DETROIT (Reuters) - Toyota Motor Corp's (Tokyo:7203.T - News; NYSE:TM - News) massive recall and sales halt of its best-selling vehicles will overshadow an expected industry increase in U.S. auto sales for January over the deeply depressed month a year ago.

Analysts expect Toyota's woes to result in sales and market share increases by its largest competitors in the U.S. market including General Motors Co (GM.UL), while it remains unclear how deeply the sales shutdown will run into the February sales period for Toyota, No. 2 in U.S. auto sales behind GM.

Toyota said on Monday it has found the remedy to fix potentially sticky accelerator pedals in the recalled vehicles, but it is expected to take some time to complete repairs.

GM, Ford Motor Co (NYSE:F - News), Chrysler Group and Hyundai Motor Co (005380.KS) offered incentives to lure Toyota customers.

Autoconomy analyst Erich Merkle believes Honda Motor Co Ltd (Tokyo:7267.T - News) may benefit the most from Toyota's crisis as U.S. customers frequently cross-shop the two Japanese automakers. Ford and Hyundai also could be big beneficiaries, he said.