vigilant, diligent, and get to the bottom of this. to what degree can we protect the american consumer? we will measure up to that duty and responsibility. thank you for your testimony. i yield back, mr. chairman. >> it starts with us. >> thank you. five minutes for questions. >> mr. chairman, i appreciate you allow me to address the hearing. mr. lentz, thank you for taking some tough questions today. addressing the issues today is vitally important. i would like to focus my questions on unrelated matter that reflects on toyota's disregard for its loyal customers and employees. i refer to the decision to recently shut down operations at a plant in fremont, california, which will cost us about 35,000 jobs in the state. i do not believe that toyota has

done enough to prevent this loss of jobs. . record, mr. chairman. >> will be, without objection. >> mr. lentz, toyota is currently experiencing major public relation problems and the public concern about safety failures is going to hurt your bottom line. california is one of your biggest markets, and it's obvious that keeping numi open will help rebuild your image. wouldn't that be beneficial to toyota? >> our image is beneficial, but specifically, numi? i think we have to be clear that toyota is not shutting down numi. numi is shutting down numi. it's a separate corporation that was 50% owned by toyota and owned by general motors. and when general motors moved

into bankruptcy and the new partner became motors holding -- liquidation holding, it was general motors abandoning numi that set this in play. that's the truth of the matter. when they pulled out and they pulled out 30% of their volume, that plant was difficult to become commercially viable. it's a long way from our supply lines. we supply -- >> it's a long way from your customer lines. i understand the pontiac vibe was only about 20% of production at num ni 2008 with toyota vehicles making up the rest of that production. surely toyota could modify its operations to account for a 20% drop in production. it seems to me that you are putting numi out of business because of antipathy toward west coast workers. not out of necessity. unfortunately, toyota hasn't demonstrated that made any meaningful effort to explore possibilities to keep numi open.

i was asking you, do you expect californians to believe in the brief time between gm's announcement and your decision to close, were you able to definitively determine that it was impossible to maintain operations at numi? >> yes, it's not financially viable to do. it's a long way from our logistics lines. the volume, 20% is a pretty big number. i mean, california sells about 13% to 14% of the nation's sales. that's a plant that has capacity for almost 400,000 vehicles that's building around 300 at the most. i mean, you've got to remember that when this industry collapsed after lehman, we had a 40% collapse from the peak of the marketplace in 20, 2001 to where we ended last year. there was tremendous overcapacity all across the united states. and it's not something you take lightly closing a plant. you look at the workers behind

me. when that market collapsed and we had 100,000 unassigned vehicles sitting in our ports that we didn't have dealers to be able to accept because inventories were so high, we didn't lay these people off. we kept these people working because we know that they are a huge asset for us. so we don't take closing a plant or numi doesn't take closing a plant lightly. we believe in our workers. they've done a tremendous job in getting us through all of this. so numi is, unfortunately, we're going to stop ordering product at the end of march. and we will do what we can to try to help the workers through transition. and hopefully, i don't know if another assembly can go in there or they can redevelop the property and create jobs through the redevelopment and whatever else goes in there. >> i'm really thinking of your benefit as well as ours. i mean, i'll leave you with this parting thought. you are having a public relations nightmare right now.

and it may benefit you a slight amount to close a plant like that, but you're going to face the public backlash on the west coast. on the other hand if you work with us to keep that open, it's going to be a real plus for your public relations issues. i just ask you to keep that in mind as you move forward. >> just understand as well, we're going to do whatever we can to help through that transition. we're not legally obligated, but we are going to throw money into it to help through this. i just wish our partner of 25 years would step up and do the same. >> that's all. >> thank you. let me just ask you a few questions to clarify our record. there's been a lot of testimony here and a lot of questions. so just make sure i'm correct here. the only independent analysis that you have had, when you spoke on today show you said you have independent analysis on your problems with the sudden acceleration has been exponent. >> yes. to my knowledge. >> and you were referring to

that report of exponent, right? >> now ntsa has always done studies in the past, but i don't know how robust they are. >> you don't have any knowledge of any independent studies they did? >> no, not to my knowledge. >> and there's been no independent electronic throttle control system studies? >> not of toyota. there may be industrywide. i don't know. >> but for your -- >> yes, to my knowledge. >> after this situation. and with dr. gilbert here, he's coming up with this and apparently your exponent's engineer has been able to duplicate it. is it fair to say then when they duplicated it they got the same result as dr. gilbert that the fail safe system did not receive the signal to enact? so in other words, the failsafe system, whether it's an override by electric, however was happening, the diagnostic codes did not kick in to put in the fail safe system to get that breaking going? >> i believe what he's done is

gone around -- designed a way to go around the override system. >> sure. >> so whether it can happen or not -- >> we don't know the source of it, but it's a book end, as they said, to start the research. >> yes. and that could be of value to toyota? >> surely. >> you mentioned the s.w.a.t. team you'll have at the end of march. >> yes. >> and in 24 hours they'll have information beyond site. mr. dingell asked and a couple of questions have been about this event data recorder. >> yes. >> the event data recorder tells you what happens five seconds before an accident and one second after. specific requests have been made on the auburn, new york, crash which was a 2010 camry. that erb has been seized. do you know where it is? why isn't that information made available to ntsa or anyone else? >> if i can get information on that crash.

>> how about the southlake texas one. 208 toyota avalon. happened on december 26th. same thing. it says conduct a site visit on 1/12 where they pulled the black box out if you will. where is the results on that? >> and they pulled the pedal off. i don't know. nhtsa was also down there with our engineers but i don't know specifically what the result was. >> or how about mr. jeff pinsky from minnesota. he's had a 2007 lexus es 350 and had problems with it and requested repeatedly to give him the information off the black box. he's always been denied. if we're going to have this s.w.a.t. team and we're going to be more transparent and bring forth this information why not on these fatal crashes, especially these ones i mentioned, why not disclose what happened on that black box? >> i think right now the issue is there's one tool in the entire united states, and i believe it's still in the prototype stages. so the final production tools we

won't start seeing here until april. so -- >> but standards for a black box were developed in 2006 by nhtsa that everybody has to have starting 2012 and 2013, correct? >> yes. >> if we have standards in 2006 you are still trying to develop a prototype. >> that's my understanding. >> so the information off this black box then, if i wanted to get the information if there's no mechanism in the united states, it has to go to japan to get the information? >> correct. correct. it is a unique mechanism for our black box. >> and this defect committee, u.s. may have a representative on it but decisions are still going to be made in japan? >> well, there will be -- the process of making a defect decision is there's a general manager of the quality group that has a committee with a number of different engineers and everyone else. that has always been in japan with japanese. that committee now is going to have people that will be seated on that from other parts of the regions around the world.

>> sure. >> united states for certain, i don't know. i'm assuming europe will probably be there as well. so they will be part of -- they will be tied into all the information available into the decision process and we will have the ability to appeal that if we don't believe in it. >> you have input but decision will still be made in japan. >> the input will be made but we'll have the ability to appeal that decision we do not have today. >> on the black box, whether wr is that data stored? >> pardon? >> if i get a black box out of the southlake, texas, accident, where would that data be scored? would that have to go to japan to get downloaded? >> if we have the scan tool, once these tools are available -- >> right. but right now because you don't have the scan tools. >> i don't know if japan has tools or not. if we're in prototype stage, i'm assuming it's a global prototype stage. i don't know that for certain. but i do know in april we're slated to receive about 100 of these. >> all right.

that will be in april. okay. if you receive -- you said you receive personally 20 to 25 complaints a week. any on unintended accelerations. >> i've got to tell you in the last three years, i have seen them on surges. but i don't recall anyone that was on an unintended incident. >> could you provide us an example of some of those surges that you personally handled? >> sure. >> okay. >> sure. >> mr. burgess, did you have any questions? >> i think it's already been addressed but would like for you or toyota to provide the committee your analysis or exponent's analysis of when they do the gilbert testing, the retesting on the gilbert thing. i just echo about the black box. southlake is right outside of my district. very tragic accident right after christmas where a car went through an intersection and ended up upside down in a pond and all the occupants died. some question as to whether or not there may have been a

medical emergency involved in that. but i thing black box, in addition to the other physical evidence, the brake pads and that sort of thing will be very instructive for your group and, of course, instructive for us as well. so as this information on these look backs, if you go out and get the car from tennessee, and your engineers come up with a decision on this, i just think it would be very useful that this committee would have that information as early as possible after you get that. and, heaven help us if there's an uncommanded acceleration. but get that car. somebody has to look at that car and figure out what's going on. appreciate it. >> we're about to wrap up. i see mr. engel is here. dow do y do you have a question of this witness? >> thank you mr. chairman. i think a lot of the questions have already been asked. but when i was asked by the

media yesterday what question was i going to ask, i said that i would ask what did you know and when did you know it and what do you still know that we don't know? and i listened to the hearing. all i can say is that i hope you can appreciate that we are very skeptical because it certainly seems if you just look at the chain of events that there was an attempt to kind of sweep everything under the rug. and i'm still not sure that the question has been reasonably answered in terms of, you know, you talk about these six vehicles that you tested. but why would not your first inclination be to test the vehicles that accelerated. when i heard mrs. smith earlier

on, the first panel, and she talked about how it just went 100 miles an hour and she couldn't do anything to stop it, wouldn't it have just been logical to take that car and others like that and just rip it apart? i know mr. barton asked you earlier. but i'm not sure i'm satisfied with your answer. >> again, i don't know the specifics, but it sounded as if she said there was a technical person that was down there and did look at the car. so i can't tell you, if they didn't see anything, that's probably why they didn't tear it apart. if they would have seen a component failure, i'm sure that that component failure would have come off that car and we would have received it. and again it may have happened. i don't know the specifics on her accident. but it wasn't only her car. there were others that gave similar stories and for how long was toyota saying it's mats, floor mats or rugs or sticky

pedals when it just would seem clear by her story. i'm sure there are others like her that it wasn't that at all. >> well, it may not be. there are so many different causes. they are very broad, very rare. and in some cases, they are just very, very difficult to duplicate. so, i mean, that's the frustrating part about researching what happens on some of these instances. especially if there is something that's going on with the throttle. if there aren't error codes and it can't be duplicated, that was one of the issues with the sticky pedal in the beginning. by the time the consumer got it to the dealership, all the moisture had dried from the pedal and the pedal wouldn't stick. you've got a consumer saying, i know this thing has been sticking. but by the time they get it to the store, that can't be replicated. that took awhile to understand. >> but in every case -- would that happen in every case? >> surely once there were many

different instances it seemed to be a pattern that you didn't have to be a rocket scientist to say, hey, wait a minute. maybe something is wrong. there's, you know, not only the acceleration but we've heard about steering and brakes and other things. you know, it just seems that if you look at everything, it certainly seems to me that there was an attempt to keep it under the rug and keep it under the table and let's not tell anybody anything and maybe it will go away. and, of course, with all the testimony, nhtsa is to blame as well. i just don't think that toyota handled it properly. let me just -- go ahead. >> in the case of brakes if you were talking about prius brake, we jumped on that very quickly and have taken care of that. in the case of corolla steering, it's being investigated right now. so, yes, we have complaints on it. nhtsa has complaints. we're digging into that right now to find out what is the issue and let's make sure the customers are happy with their

products and safe with their products. >> so let me ask you as the last question, when i was asked yesterday, what would i ask you and i said what did you know and when you knew it. what do you know that we don't know yet. what do you know that we don't know yet? what's going to come out in the days and weeks? i know mr. toyoda is testifying in another committee tomorrow. what bombshells are going to come out that we don't yet know. >> god i hope there aren't any more. let's get back to the good old days of 2009, and i didn't think i'd ever say that. you know, right now, we have to fix the process so these things don't happen again. i don't know what's behind the curtain. no one knows in the auto industry as manufacturers what defects you could have down the road. what challenges you have. so it's important that we have built-in quality and build-in safety so we don't have these issues. and that's why our processes are

changing to make sure that we get back to where we once were. this was a company for 50 years in the u.s. that, whenever you said toyota or you said camera it was quality, dependability. and we've stubbed our toe. and we've got to get back to where that once was and we're going to do that. >> i would hope so. thank you mr. chairman for holding the hearing. >> mr. ging ry, question? >> very, very quickly. i could ask you a couple of yes/no questions. have you enjoyed pebeing here today? and do you want to take any more questions? i guess the answers would be yes and no. seriously idid want to can you. do you think this is a software or hardware problem? >> in the case of the etc? >> yes. >> again, based on our analysis of what we've seen, based on going to accident sites and checking these cars out, i don't think it's either right now. but exponent has not tested the software yet.

so that's yet to come. so if there is a software issue, if there is an issue about how independently these two processors are working because that's the key to make sure that this thing works. we'll know that. >> but it could be either, and you're going to get to the bottom of that? >> we have to get to the bottom of it. >> absolutely. and it may be that the bottom of it is they find nothing. and we have another independent group that goes in and researches again. >> mr. lentz, thank you. mr. chairman, thank you. i yield back. >> that concludes all questions of this panel. mr. lentz, thank you. we invite you to stay for the next panel, secretary lahood. we have five votes coming up. i'm going to try to get the secretary's testimony in and then we can go vote. we'll have a >> tomorrow morning, another house hearing on toyota's

recent vehicle recall. we will hear from toyota most corporation and c.e.o., akio toida. it begins on c-span at 11:00 a.m. eastern. >> up next on c-span, the head of the federal deposit insurance corporation talks about the recent jump in u.s. banks facing financial difficulty. after that, e.p.a. administrator lisa jackson is asked about her role in regulating greenhouse gases. >> live thursday, day-long coverage of the white house health care summit. starting at 10:00 eastern, president obama will meet with congressional leaders and other key leaders in the debate. and we will include your

reaction thursday on c-span 3, c-span radio and c-span.org. >> the agency in charge of the nation's banks set 450 lenders were added to the list of troubled banks in 2009. the federal deposit insurance corporation protection bank deposits of up to $250,000. this is about 25 minutes.

>> this first chart shows quarterly earnings over the last five years. as you can see, we are still bumping along at the bottom of the credit cycle. the industry earned less than $1 billion in the fourth quarter, essentially just breaking even. usually a lack of profits is not considered a good result. but compared to the record loss the industry recorded a year ago, it represents significant improvement. each quarter we present a chart that shows the major positive and negative factors that contributed to the year over year change in bank earnings. this quarter, the positives vastly outweigh the negatives. it is not that this is a strong quarter. it is simply that everything was so bad a year ago. the three large his were interest come, and loss provisions. while the industry totals are

dominated by a partial rerebound at large institution frs historic losses posted a year ago, you can see from this next chart that more ivens institutions are showing improved earnings. slightly more than half reported year or year improvement in net income, the highest share in three years. for about one in five of these institutions, improvement was a smaller quarterly loss than a year ago. overall, almost one in three institutions reported a net loss for the fourth quarter. for all of 2009, the industry reported earnings of $12.5 billion for a return on assets of .09%. earnings were $8 billion higher nun 2008 even though banks expensed $15 billion more in deposit insurance assessments. 29% of institutions reported net losses for the year this.

is it the highest percentage in the 26 years that data for all institutions are available. troubled loans continue to increase in the fourth quarter as this chart shows. charge-offs were higher than a year ago and the amount of not current loans continues to increase. however, the pace of deterioration slowed for the third quarter in a row. as we have said before, this trend suggests that non-current loans may peak in 2010. banks and thrifts have three lines of defense against credit losses. the first line is current earnings, loan loss rereserves arcs and credit capital. credit losses in the past four quarters have absorbeded most earnings. as this chart shows, in 2009, larger institutions kind to expand their capital bases. leveraged capital increased by 11% and reserves grew by 31%. the next chart illustrates that

while the industry has built its loss reserves, this growth has not kept pace with the rising level of non-current loans. as a result, coverage ratioçó h been falling throughout the time that non-current loans have increased. although the deadline in the coverage ratio is slowing, loss provisions should remain high in the near term. as you can see in this chart, 45 institutions failed during the fourth quarter, bringing the total for the year to 140 failures. this is the highest annual total since 1992 when 181 insured institutions failed but still far short of the 531 failures recorded in 1989. the cost of failures continues to reduce the balance of the deposit insurance fund as we predicted. the balance was negative in september and fell further to a negative $20.9 billion unaweded as of december 31.

as we explained in previous quarters, the balance is negative because of the large amount that has been set aside in our con tonth -- contingent loss reserves. the contingent last reserve us of $44 billion is added back. many losses anticipated in the con tinths loss reserves can be aattributed to commercial real estate losses. the cash resources stood at $66 billion as of december 31. cash increased by $46 billion at year-end when insured institutions prepaid about three years worth of deposit insurance premiums. this provided the fdic theability to ensure institutions through 2010 and yod.

the resources to protect depositors are strong, and our guarantee to protect insured depositors is absolute. challenges lie ahead for the industry. the continued rice in loan losses and troubled assets points to further pressure on earnings. the growth in number of assets and institutions on the troubled list points to a likely rise in failures. the problem lift and bank failures tend to lag behind economic recovery. unfortunately, loan grothe also tends to lag the economy. as this chart shows, all major loan categories had deadlining balance in 2009. total loans fell by 7.5%, the largest full year deadline 1942. the deadline in lending is driven by a number of factors. surveys indicate that credit demand has weakened as consumers and businesses have cut spending. banks have tightened lending

standards, and a number of institutions have reduced their loan balances in order to deleverage and improve capital reche yoss. large banks were responsible for 90% of loan balances. they have been cut can't back significantly. small and mid sighs institutions to tend to make business loans are dealing with the effects of large declines in real estate values. lower values reduce the collateral coverage of existing loans and make it more difficult for households and small businesses to qualify no new credit. the events surrounding the financial crisis of 2008 continue to take a toll on our economy and the banking industry. the extraordinary policy response toss that crisis were effective in stabilizing markets. however, the large dislocations that have taken playing in real estate and credit markets are slowing the pace of emerging economic recovery and contributing to persist ent

high unemployment. resolving these credit market sthrokeses will take time. one thing that can help is a balanced approach to lending. >> obviously these policy statements alone won't make the problem go away. but they do get to the root of the matter by giving lenders a route map for making qualified loans to consumers and businesses. thank you very much, and i would be happy to take your questions now.

>> you said previously that 2010 is expected to be a peak year for bank failures. >> right. >> why have we not seen more bank failures so far this year? >> well, bank failures can be cyclical. i think as we have said, the pace is probably going to pick up this year and for the total year will exceed where we were last year. i think this year the losses are going to be heavily driven by c.r.e. for sometime we have been projecting that. it does take c.r.e. losses time to work through the system. frequently the borrower may have cash reserves to continue the payment for a while. also, tenants may be in longer term leases and you don't start seeing the problems until the leases come due and they can only renew at a significantly

reduced rate. >> with like 1 in 11 or one in 12 banks on the problem list, it is harder for banks to make loans and that is tough on the economy. >> yes. that is an issue. many of the smaller banks are capital constrained because of the losses they are suffering on their c.r.e. portfolios. we are trying to work with them and take a balanced supervisery approach and with prude management, going to intend to help the issues. larger banks need to step up. loan balance deadline have been heavily driven by the cut-backs by the larker backs. small business lending has been impacted by the capital constraints on the smaller community banks, but i do think

that larger banks need to do a better job of stepping up to the plate here. >> how confident are you in the steps taken to replace the funds? >> not based on our current projections. we have some pretty severe stress scenarios. own with those, we think the cash balances should be sufficient as well to get through this. so no, i think the dip balance will also trough this year based on our projections. so much of this is based on the economy, which is beyond our control. assuming we don't have a significantly more adverse scenario than people think, we should be in good shape this year. >> what do you attribute -- there was a difference in non currency for mortgages that went up and noncurrence that

went down. >> i'm not sure. the c.r.e. performance is different because the performance characteristics take longer to work through the system. i'm not sure i would reach too much into that. >> one more. >> i'm wondering, somebody who is hitting at home and hearing that banks barely broke up, the problem list went up, loans seem to be still going bad but not as fast, what should they make of all this? should that mean the bank system is healing and the worst of the crisis is over? >> there is incremental improvement here. we are seeing some encouraging signs it is going to take a year to work through. 140 bank failures, 700 on the

problem bank list sounds scary, but there are thousands of banks out there, and 90% of them exceed the standards for being well capitalized. over all the banking system is challenged but stable and is performing its credit extension role. we would like to see more of that within the framework of prude risk management, but particularly with large institutions, their declines in loan balances and cutbacks, and we will see some turning back this year. thank you. [inaudible] >> can you explain how the $45 billion fits into the $20.9 billion deficit? >> are you talking about the

$44 billion contingent liability? >> the $45 billion collected? >> the fdic received cash from the institutions for the about $46 billion paid for the prepaid assessments. but we did not recognize that as revenue at the time because it had not been earned. that is a established liability, and it will be recognized as a liability. just as the institutions will take a charge on their books for insurance expense, the deposit insurance will recognize the corresponding revenue. so we will see that over the next three years. >> i was wondering if you have made any change here, projection of bank failures from 2009 to 2013? >> $100 billion over five

years, 2009 through 2013. no, we have not made any change to those projections. based on the data we have currently, nothing leads us to change it up or down. later this year, staff will be going back to the board of directors on our requirements of meeting the restoration plan, and we will update those numbers at that time. >> what was the timing? >> sometime before the end of the first half of this year. >> is your outlook with the sluggish recovery in the industry, what does it say about what the economy might look like over the next couple of years? >> werblings i think the signs of the economic recovery are pretty robust right now. the recovery is moving apace, but it is a jobless recovery. lending has been weak, and

spending by businesses and consumers has always been weak. while the economy is moving ahead, banking results tend to lag behind. the problem loans and the earnings of the industry will improve somewhat after the economy improves. and of course the expansion, it appears that the economy -- if the recession ended sometime in the middle of last year, and again, we expect the banking results to lag that somewhat. >> sort of a follow up on that. do you see that unemployment impacting the industry over the next few quarters, perhaps a more elevated asset deterioration, or has that peaked? >> unemployment certainly effects the asset losses we have seen. virtually every portfolio that you can name. so that effect has been going on for some time now.

if unemployment remains elevated, will those portfolios get better? well, only time will tell. we have seen tighter lending standards, and that will play a factor. what happens with unemployment democrats on a number of factors as well. someone mentioned have we seen a peak in non-currence for.and i in we will see that. there has been a stabilization in home prices. the day-schiller numbers just came out today. there is room for credit distress out there. we see the resets on the option arms. there is still potential for more credit discretion in mortgage portfolios? >> can you talk about what you are doing for the c.r.e. market and if there are other steps or programs in the future that could help as things get worse? >> we have guidance right now

out there both for the industry and for examiners, for our side, to ensure we have consistency in our approach and a balanced approach, and for the industry to understand really our concerns from a supervisery standpoint so they can go about lending in a difficult market. i think for the most part it is going to come down to the condition of particular institutions and the market they are in, and the demand in the particular market they are in. >> do you anticipate any further openings of satellite offices to deal with failures? i think there have been three so far that have been opened, but as these loss provisions

for the agency increase, do you anticipate there are going to be more of these regional offices? >> none of us actually directly work with resolutions, but that is going to be based on the amount of failures and where they take place. >> we probably ought to find someone else to get back to you on that. none of us are familiar enough with those plans. >> the general answer to the question, we have the three that are anticipated, and i think from an expectation perspective that is what we see as necessary for now. >> is this to some degree a large bank-small bank story with the result? it seems that the large banks have largely healed. when you see a problem bank, it is an eye-popping number, but it is smaller institutions. going through and looking

through the results released today, is it a large bank-small bank story, a contrast? >> we can both answer that. >> obviously we have made the observation that the magnitude of the year over year improvement was driven by the large banks. they had the biggest lotses a year ago, and so they had the biggest improvements. in a lot of cases that improvement meant smaller losses. again, when the industry is right at the break-even point, i don't think that you can state that a recovery is completed or anything. i do think the large banks were probably in a deeper hole. a year ago i think they went into difficulty more quickly than smaller institutions. they have a bigger proportion of mortgage loans and consumer loans in their portfolios than medium to smaller banks, which tend to focus on commercial credit, and i think the retail

loans probably led to the downturn in the credit cycle. all things being equal, you would like to think that what led you in will lead you out as well. that remains to be seen. i don't think we are at a point yet where we would be announcing that as a given. certainly in terms of the overall improvement -- >> that said, if you look at the broader indicators, the number of institutions reporting year over year improvement, slightly over half reported improvement for the first time in three years. that speaks of a broader trend in the industry. about 90% of all the banks we ensure have less than $1 billion. that is a lot of communities banks that are at least doing better. we saw a slightly smaller proportion of the industry losing money or reporting net losses for the fourth quarter compared to a year ago. that was just over a third of all institutions a year ago and

this fourth quarter it was just under a third. there are some incremental signs of progress. the more dramatic improvement has been concentrated among the larger banks. >> the other thing i would add is the smaller institutions tepid to have concentrations and that is in commercial real estate. that is an area under stress. it became under stress a little after the residential stress, but the ability to withstand that stress when you do have concentration is lessened, and that results in higher failures. >> one other thing, too. what do you see as the looking risks still out there? the chairman has been sounding the alarm on interest rate risks and to try to minimize that. what other risks are you most closely watching?

>> the ones i -- i spend more time dealing with the larger institutions, but certainly the rate risk is one we are looking at, and we still are monitoring liquidity. for the markets to come back at this point, we have been fairly encouraged. but it is certainly an area we continue to watch as institutions continue to carry a reasonable amount of credit risk. as long as that credit risk is embedded in balance sheets, they are going to be sensitive to liquidity markets. we watch that area. >> the two areas you mentioned are front and center to us. with regard to commercial real estate, it is important to point out the problems are already prevalent in the non-current rates. it takes time for income-producing properties and things like that in portfolios to experience problems.

that is an area we are watching closely right now. [inaudible question] >> the sense is that the challenges out there will be experienced fairly gradually over the next couple of years. >> could you help me understand why is the cash balance of the difs so much higher than the reserve balance? >> that is getting back to the question about the prepadse. we collected the $46 billion from the industry for the prepaid assessments at the end of 2009. while that improved the deposit insurance fund ace cash balance or liquidity position, it didn't impact the fund so much because we did not take that to revenue. we will be taking that to revenue in the fund over the next three years, and so it is going to take a while for the fund balance to reflect that prepaid activity. but again, the liquidity position was helped immediately by that.

[inaudible question] >> we take it to revenue quarterly. we look at the insurance period as a quarter. so as we pass that insurance period, then well reflect revenue for that coverage period. >> if i could add one thing. the fund balance is of a net worth of the deposit insurance fund. so it is assets minus liabilities, and cash is one kind of asset on our balance sheet. >> no further questions. >> all right. thank you very much. [captions copyright national cable satellite corp. 2010] [captioning performed by national captioning institute] >> on tomorrow morning's "washington journal," we will continue our look at the toyota recalls. "new york times" correspondent, michigan lynn maynard joins us. after that an ambassador to nato will talk about the changing role of nato.

and then ben cardin, and then darcy burner. "washington journal" begins each morning at 7:00 a.m. with the day's news. live health coverage at 10:00 eastern on c-span. >> next, e.p.a. administrator lisa jackson testifies about her agency's role in regulating greenhouse gases. she appeared before the senate public works committee chaired by senator boxer. here is a portion of the hear. >> make sure you pick your mic on though. >> you're right. thank you, chairman boxer. greetings to you and ranking member emwho have.

please convey my well wishes to my home senator, frank lawsuitberg. thanks for the opportunity to discuss e.p.a.'s proposed budget. i heard all of your opening statements, and i appreciate the opportunity to present a budget that fully reflects president obama's and my commitment to virmental protection and to ensure all families have access to clean air, clean water and land.

>> the science behind climate change is settled and human activity is responsible for global warming. not only have american institutions come to that conclusion, but so have other numerous industrialized countries. the senate has passed twice on a bipartisan basis a resolution finding that greenhouse gas from human activity poses a risk of increased frequency and severity of flood and droud. this budget reflects the science and positions e.p.a. to address this issue in a way that will not cause an adverse impact to the economy. the budget includes a requested increase of $43 million for teak action. the bulk of this funding, $25

million, is for states, state grants, focused on developing the technical capacity to address greenhouse gas emissions. it includes $13.5 million in funding for implementing new emission standards that will reduce emissions from sources such as passenger cars, light duty charges and medium duty passenger vehicles. a rule supported by the states and the auto industry. this budget requests an additional $3.1 million for future carbon capture and screst ration projects. this budget takes steps to ensure local air problem is good for all. to improve air quality, we will continue our support of enhanced monitoring and enforcement efforts. this budget requests $60 million for state grands.

there are no quality standards. also this budget provides $6 million to improve air toxic monitoring abilities and compliance in communities. toxins are found not only in air emissions, but in many of the common chemicals we use every day. we have an obligation to ensure these chemicals are safe. the e.p.a. released the four ever action plan, and more plans are in the pipeline for 2010. in its budget, e.p.a. proposes $56 million for chemical assessment and risk renew, including management plans to ensure that no unreasonable risks are posed by new or existing chemicals. this prugget proposes strategies to protect sensitive populations such as children, the elderly and individuals with chronic diseases.

this pruggetprofse >> for 2011 this budget effects e.p.a.'s commitment. with an investment of $2 billion for clean water, and $1.3 billion for the drinking water fund. that will initiate approximately 800 cleave water projects across america. the 2011 budget supports

numerous eco system efforts. these programs will address critical issues such as toxins, habitat degradation and loss, inevasive species. we have dwun a new outreach -- begun a new out reach program. we are working with tribes and communities of color, distressed cities, towns and others, but the just a start. we must bolster our relationship with state and tribal partners. i am challenging all of our employees to bring vision and creativity to our program. thank you very much for allowing me to briefly go through these highlights. i will be happy to answer any questions you may have. >> thank you very much. i wish senator vitter was here

because he said he was very pleased, and i am quoting him, that we focused on, quote, the uncertainty over climate changes." his words. i want to make it clear for the record that uncertainty about climate change is coming from some colleagues on the republican side. not one colleague on the democratic side has expressed in any way any feeling of uncertainty. on the contrary, they feel very certain about it, and we have voted out a very strong bill on this committee which i am very proud of. i want to say to senator emwho have in his denying global warming is happening that in my opening statement, i didn't quote one international scientist. i quoted noaa.

i quoted nasa, and the triple-a, in this case, the american association of the advancement of science. and we continue to quote the defense establishment, the c.i.a., d.o.d. and many retired military people who tell us that this is a great threat. i want to really point that out. i think it is very fair that we disagree on whether or not there is climate change. that's fair. but the facts are the facts. i am quoting american scientists, number one. number two, i also quoted what is happening on the ground, and that is crucial. we have been keeping records for 130 years, and we have had the warmest decade in that time . we can track the ice. i think there is -- two things i wanted to dispel.

we are quoting the american scientific community here, and we are talking about facts on the ground, what has been observed over the last decade. climate change is about decade to decade, not day-to-day. i appreciated this opportunity on both sides to express our views. but let me be very clear. the majority of this committee in strong numbers believe that we must act, and in fact, we have acted. i also want to say how much of miss senator lautenberg. he is on the mend, and we send him our best. administrator jackson, the air quality management districts in california have some of the most polluted air in the nation. this pollution worsens, and attacks cardiovascular diseases and children are vulnerable. e.p.a. cut funding for federal

grants to reduce pollution in these areas. has anything changed with pollution levels in these areas that it should not be treated as a top priority? >> it should be treated as a priority. there have been changes and good work funded by previous earmarked grants for those air districts. you are right in noting this budget does not propose to continue those earmarks. >> but there are earmarks for other areas, and they are pointed out here. i will communicate -- and for example, alaska native villages, there are a number of earmarks. can i further this conversation and write to you about this? we are worried. there is infrastructure assistance for the mexico border. there are certain areas that are named, and this area, because it is a valley, is really hit hard. i'm disturbed.

now i want to ask you about the superfund. we are going from 22 call-ups -- clean ups to 25 clean ups. i am concerned we are not being aggressive enough. can you explain why that is the case, we are only going from 22 to 25 clean-ups? >> the additional money provided to the superfund program from the american recovery and reinvestment act, the stimulus funding and the straight line funding does not allow for a huge increase in the number of superfund sites that will be completed. i share your concern, chairman. what this program needs it money. this is certainly a year of tough choices, however, so in working with the white house to craft this budget, what we did was try to find a level of funding that allowed the program to continue, realizing that certainly more money would

be great. but we had tough choices to make. >> let me say i am going to be talking with you about some of those choices. another one i have been working with you on, and i appreciate your staff, we have got arsenic that has been found in the water in some of our poorest communities in california. my concern is while they get ready to do a regional water quality control and all the rest of it, we are just not helping these communities right now. they can't drink the water. they have a doubling of the allowable amount. can we continue to work together to see if we can find a solution while we clean up the source and the problem, we need clean water for these kids to drink. can we work together on that? >> chairman, i look forward to working with you. >> i know our senators may have it as well. senator?

>> thank you. i have sat here for years listening to this. the senator from vermont want to badly to believe that gases cause global warming and the science is not settled. phil jones is the top guy. he came up from the clearing house. he is the one who is under investigation right now, and he said two weeks ago i don't believe the vast majority of the climate scientists believe the debate is over. this is a clear statement by the guy in charge of all this stuff. you can want to believe something so badly that you go ahead and believe it and i guess that is all right. because of the short time, i am going to ask two questions that require a yes or no answer or i don't know. one of your quotes, madam administrator was the e.p.a.'s view that the scientific

assessments of the ipcc represent the best reference material for determining the general state of knowledge on the scientific and technical issues of climate science. do you still agree with that statement? >> i think it is out of context. the icc is important. it represents much data. >> this is the statement. one other question. over the past several weeks, as i noted in my opening statement. the media has uncovered significance errors and non-peered reviewed, including mistakenly reporting that warling would melt the him lay ya glaciers and other things that i used in my opening statement. do you still believe as you stated before that the ipcc is the gold standard for climate

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mr. boehner: consent to address the house for one minute. the speaker pro tempore: without objection. mr. boehner: mr. speaker and my colleagues, when i traveled around my district, i ran into a lot of people who are looking for work, hanging on by their fingertips. and they want to know, when's washington going to wake up? they're asking, where are the jobs? you know, i run a small business and one of the things a small business needs to grow is they need certainty, certainty about what the future is going to look like. when all of us talks about raising taxes here in washington, d.c., imposing mandates on employers in the health care bill or a new national energy tax, all they're doing is creating more uncertainty that's causing employers to be frozen in their job creation. the congressional budget office has made clear that the mandate

that was in the senate and house passed bills, the senate bill, $750 per person for an employer who doesn't offer health care to their employees. each employee would have to pay that fee. now, what we see is the president offering that that penalty should be $2,000 per employee. it's going to raise the cost of employment, and according to the congressional budget office, cost tens of thousands of jobs across our country. it's time to scrap this bill, get back to commonsense ideas that will help improve the cost of health care in america and widen access and bring some certainty to employers across this country who want to hire more people but won't with all of the uncertainty that's out there. i yield back. the speaker pro tempore: for what purpose does the gentleman from indiana rise? >> mr. speaker, i send to the desk a privileged resolution and ask for its immediate

consideration. the speaker pro tempore: the clerk will report the resolution. the clerk: house resolution 1095, resolution electing a minority member to a standing committee. resolved, that the following member be and he is hereby elected to the following standing committee. mr. pence: mr. speaker, i ask that the resolution be considered as read. the speaker pro tempore: without objection. the resolution is agreed to and the motion to reconsider is laid upon the table. for what purpose does the gentlelady from california rise? ms. watson: to address the house for one minute. the speaker pro tempore: without objection. ms. watson: thank you, mr. speaker. and i rise today to speak to you about health care reform. this past month, blue cross in california decided to raise their insurance premium by 39%. this is simply unacceptable. my constituents cannot be expected to swallow this price while they struggle to keep food on the table. i have long been a supporter of comprehensive health care reform because of the

unfairness and inadequacy of our current health care system. i applaud the president's leadership in convening this week's health care summit. though health care continues to be a long and arduous process, the american people cannot wait any longer. we must come to a compre mize and pass a he -- compromise and pass a health care reform bill that is affordable. we must prohibit discrem thattory practices such as -- discrem thattory practices such as pre-existing conditions and caps on coverage. any reform must also control costs so that everyone can afford to get the treatment they need. let's do what is right. the speaker pro tempore: the gentlewoman's time has expired. for what purpose does the gentleman from indiana rise?

mr. pence: to address the house for one minute. the speaker pro tempore: without objection. mr. pence: the stimulus bill has failed. this has been acknowledged by the leadership of the democratic party here in congress and at the white house. we were told before the state of the union address that the president and house democrats were going to, quote, pivot to an emphasis on fiscal discipline and jobs. but as the american people are struggling with unemployment about 10%, an estimated 14.8 million americans looking for work, americans are asking, where's the pivot? and more importantly, where are the jobs? after a year of borrowing and spending and bailouts and takeovers, met this week by the latest version of a government takeover of health care, millions of americans are asking, when will washington get the message? when will washington, d.c., from this well to the white house itself start to put americans back to work with the time-honored principles of fiscal discipline in washington, d.c., and across the board fast-acting tax

relief for small businesses, family farms? let's put the emphasis on jobs, mr. speaker. the speaker pro tempore: the gentleman's time has expired. for what purpose does the gentleman from new york rise? -- does the gentleman rise? >> to address the house for one minute. the speaker pro tempore: without objection. >> the card act is long overdue, including banning on interest rate increases and fees and penalties by credit card companies. putting this law into effect marks a new day for families in south florida. we've put in place commonsense provisions to make sure that hardworking people are unfairly taken advantage of by credit card companies. too many have seen the tricks of credit card companies which is changing the date which it is due or doubling or tripling the interest rates. this bill is up to its name as

the true credit cardholders bill of rights. i look forward to working with my constituents to continue to make sure that we put the needs of local consumers first. thank you and i yield back. the speaker pro tempore: for what purpose does the gentlelady from north carolina rise? ms. foxx: i ask permission to address the house for one minute, mr. speaker. the speaker pro tempore: without objection. ms. foxx: thank you, mr. speaker. the white house has a new health care bill, but this new bill is essentially the same as the old one. it is still a hugely expensive package full of harmful tax increases that will destroy even more jobs than trattic policies have destroyed. during his campaign, the president said that, quote, under my plan no family making less than $250,000 a year will see any form of tax increase, not your income tax, not your payroll tax, not your capital gains tax, not any of your taxes. that's interesting because this new health care bill includes about $136 billion in new taxes

on the very group that wasn't supposed to see, quote, any form of tax increase, end quote. mr. speaker, the american people don't want a government takeover of health care with billions in new taxes on hardworking americans who are struggling to make ends meet. i yield back. the speaker pro tempore: the gentlewoman's time has expired. for what purpose does the gentlewoman from arizona rise? >> request unanimous consent to address the house for one minute. the speaker pro tempore: without objection. mrs. kirkpatrick: arizonans are celebrating the latest success in the fight to preserve our second amendment rights. yesterday, a new law took effect allowing law-abiding citizens to bring guns into national parks and wildlife refuges. i was proud to join members from both parties to pass this law which ensures we can now move freely throughout state and federal land with our firearms. greater arizona is home to the

most beautiful sites in the country including thousands of millions of park land. national parks are not just places we visit on vacation. we live and work in and around them. it was unacceptable to make us leave our rights behind each time we left home. now, folks can be confident that their freedoms are protected wherever they travel in arizona. i look forward to working with my colleagues to continue fighting to protect our constitutional right to bare and keep arms with measures like this and i yield back. the speaker pro tempore: the gentlewoman's time has expired. for what purpose does the gentleman from nebraska rise? >> to address the house for one minute and to revise and extend. the speaker pro tempore: without objection. >> thank you, mr. speaker. yesterday, the president unveiled his $1 trillion health care bill which is nearly the same as the two previous bills which have already been rejected by the american people. the american people have rejected those bills because they raise taxes, kill jobs and increase costs to fund a government takeover of health care virtually. the new taxes and regulations

on small businesses alone will kill jobs at a time when nearly one in 10 americans are already out of work. the plan unveiled yesterday still lacks fiscal responsibility and still puts federal bureaucrats in control of private citizens' private health care decisions. however, it does nothing to end junk lawsuits or purchase affordable i insurance across state lines. this is more of the same as what we've seen before, a series of half measures moving in a provenly wrong direction. i yield back. the speaker pro tempore: the gentleman's time has expired. for what purpose does the gentleman from new york rise? mr. tonko: to address the house for one minute. the speaker pro tempore: without objection, the gentleman is recognized. mr. tonko: thank you, mr. speaker. in january of 2009, the united states economy had lost more than 750,000 jobs in just one month. a year later in january, 2010, the united states economy

gained a few thousand jobs. this remarkable shift in the economy's performance is mainly due to the american recovery and reinvestment act passed by this congress and signed by our president. in one year the recovery act has provided $120 billion in tax cuts for 95% of working families as well as businesses across this country. loaned nearly $20 billion to small businesses to expand and create jobs. funded more than 12,500 transportation projects nationwide and kept teachers, police officers and firefighters working on the job. now, we are seeing growth in our economy. on february 20 of 2009, the dow jones was trading at 7365. yesterday the market closed at 10,383. the recovery act has worked and will continue to work throughout the course of this year. after all it was designed to be a two-year program. i yield back my time. the speaker pro tempore: the gentleman's time has expired.

for what purpose does the gentleman from georgia rise? -- alabama rise? >> i ask unanimous consent to address the house for one minute and to revise and extend. the speaker pro tempore: without objection. >> mr. speaker, last week the president and his administration were out in force bragging to anyone who would listen how successful's -- successful last year's trillion dollar stimulus bill had been. vice president biden said i am absolutely certain of one thing, the recovery act is working. well, forgive me, mr. vice president, if i and millions of other americans are a bit skeptical. the americans are asking, where are the jobs that this trillion dollar budget buster promised? let me tell you, i will have a hard time going to my district in monroe county which has gone from 6% unemployment when the democrats took control of congress in january of 2007 to last month over 20% unemployment. sadly, this is a story that's being repeated all across america. so while the president and his

democratic colleagues in congress are trying to remember the words to happy days are here again, the american people are left wondering, where are the jobs and does anyone in washington care about us? i yield back. the speaker pro tempore: the gentleman yields back. for what purpose does the gentleman from washington rise? >> mr. speaker, i ask unanimous consent to address the house for one minute and to revise and extend my remarks. the speaker pro tempore: without objection. .7 c16 c13 mr. mcdermott: like everyone, i was watching the olympics. who was the most famous person in canada. fame is a fleeting thing. 6 o seconds down the hill. the most famous person in canada by a vote on the c.d.c. was a politician, a baptist minister, from saskatchewan. his name is tommy douglas. tommy douglas in 1947 brought universal health care to suss

catch juan. -- suss catch juan -- saskatchewan. nobody remembers the people who said they would never have health insurance in canada. nobody remembers all the people that fought him. he was elected five times premier of saskatchewan because the people remembered who brought them health care. maybe that's why former speaker gingrich said we can't let mrs. clinton succeed or the democrats will be in forever. well, that's what we are seeing again, folks. maybe the republicans are afraid that they'll never get back in. the speaker pro tempore: the gentleman's time has expired. mr. mcdermott: nobody who didn't say yes. the speaker pro tempore: for what purpose does the gentleman from south carolina rise? mr. wilson: i ask permission to address the house for one minute, revise and extend my remarks. the speaker pro tempore: without objection. mr. wilson: last week marked the first year of the trillion dollar spending bill claimed to produce jobs. by it's been reported that more

than four million jobs have been lost. with 7.5 million million jobs lost since speaker pelosi took over, i toured the district i represent where i found people want change from big government failed policies. they supported the concepts of the protch tax cuts of john f. kennedy and ronald reagan as presented today in h.r. 470, to create jobs. sadly the administration obsessively pushes a health care takeover which the national federation of independent business confirms will kill 1.6 million jobs. both parties should be working together to promote small business, the backbone of america, to create jobs. in conclusion, god bless our troops, we will never forget september 11 and the global war on terrorism. welcome, mark connor, westbrook, the newborn son ofed that and christie westbrook, born february 19, my sympathy to the family of wayne of richland, the father of chief of staff eric dell of the second district.

the speaker pro tempore: the gentleman yields back. for what purpose does the gentleman from michigan rise? >> request unanimous consent to address the house for one minute. the speaker pro tempore: without objection. >> i rise to tell the story of an american recovery and reinvestment act project that is set to create new high-tech manufacturing jobs in my hometown of battle creek. last week toda america finalized a grant through the department of energy's electric drive battery and component manufacturing initiative. without the recovery act, this japanese firm wouldn't be investing $70 million to build a new hybrid battery plant in my district. they wouldn't be hiring 50 to 60 new workers at an average weekly rage of $900, plus an additional 91 indirect jobs. in michigan with an unemployment rate of over 14%, we need every job we can get. 1850 people will have jobs in my district because of toda's innovation.

the recovery act's commitment to battery development. and a never give up attitude. this is how we turn our economy around. one job at a time. the speaker pro tempore: the gentleman yields back the balance of his time. for what purpose does the gentleman from california rise? >> to address the house for one minute. the speaker pro tempore: without objection. mr. lungren: thank you very much, mr. speaker. mr. speaker, i returned from my district here a couple days ago after hearing from my constituents at several town hall meetings. one of the things they made absolutely crystal clear was they wanted us to start over on health care. they weren't arguing for the status quo, they were arguing for a new start. what do we have on thursday? the president inviting members from both houses, both democrat and republican, for what? for what? a session in which it appears that the ground rules are going to be we are going to start with the house and senate bills. i don't know, but i'm proud to be in this house in part because of my love of the constitution. i look at the constitution and it says we have three different branches of government and we

are responsible for legislation. i don't see where there's a monarchy where you are supposed to go and have an audience with the monarch surrounded by his court jess terse. -- jesters. the speaker pro tempore: the gentleman's time has expired. for what purpose does the gentleman from minnesota -- >> to address the house for one minute. the speaker pro tempore: without objection. >> thank you, mr. speaker, last week i, too, had a week to be in my district. we had great conversation abouts how small businesses can continue to create and revitalize our economy. you know what they talked about most was health care. they shared stories about double-digit increases in premiums. they shared stories about a difficult time hiring new employees because of the cost of health insurance. one story in particular stuck with me. i walked into julie's jewelry store in st. peter, minnesota. she is a woman who poured her life into making her business work, but she also shared a story with me. her son was recently diagnosed with a brain tumor. as she and trevor fight for his life, they are also fighting their insurance company to pay

for the chemotherapy their doctor ordered. she also told me she fears her son will never be able to change jobs because of a pre-existing condition. our current health system is limiting our ability to grow our economy. as you know, mr. speaker, i represent the mayo clinic in rochester, minnesota, i'm proud to do so because of the high quality, low cost care they provide. i would like to leave you with a quote last week from the mayo clinic. reforming health care in america is absolutely essential. the status quo is not sustainable. i yield back. the speaker pro tempore: the gentleman's time has expired. for what purpose does the gentleman from texas rise? >> to address the house for one minute. the speaker pro tempore: without objection. >> thank you, mr. speaker. i went on line and i got the president's proposal here and it's 11 pages, and it's a summary. and then i got the summary of the summary and it looks like it's about 19 pages summarized in the -- summarizing the 11 pages. pagejjtrying to do summaries of

summaries of the summaries. that's not good enough. people are out of work. we have heard last year, a year ago, that if we did not pass the stimulus bill, the porkul ous bill, the employment might go as high as 8.5%. god would that we would be there instead of where we are today. this is not going to create jobs. it's going to suck more money out of the economy the government uses that the businesses will not have to create jobs. let's help america. let's help america. let's put people back to

microphone up? it is hard to hear her. >> sure. just pull it closer. >> is that better? >> try that. >> yes. >> my name is rhonda smith and this is my husband of 38 years, eddie smith. i'm a retired social worker with the state of tennessee and eddie is a senior vice president at a bank in sevierville, tennessee. i'm truly thankful to be here today and i feel i'm speaking on behalf of those who have lost their lives needlessly, unnecessarily and i would like to share an incident with you concerning sua that i experienced october 12th, 2006, and our new lexus es 350. this car had 2,728 miles on it when the incident occurred. the vehicle had a keyless push button ignition and required a key fob to be present inside the car in order for it to start. on that thursday, october 12th,

2006, and i am going to read this because i tell you it is it still upsets me today, i was driving from my home in sevierville, down highway 66, to the interstate, interstate 40, and upon entering the interstate i accelerated with everyone else into the flow of traffic. and at this point i merged over into the second lane, not going into passing gear. at this time i lost all control of the acceleration of the vehicle. the car goes into passing gear and the cruise light comes on. at this time i'm thinking that might be the cruise is what caused the car to keep accelerating, as my foot is not on the gas pedal. i take off the cruise control, but the car continues to accelerate. to make a long story short, i put the car into all available gears including neutral, but then i put it in reverse and it remains in reverse as the car speeds to over 100 miles per

hour down the interstate. i place both feet on the brake after i firmly engaged the emergency brake and nothing slows the car. i figured the car was going to go its maximum speed and i was going to have to put the car into the upcoming guardrail in order to prevent killing anyone else and i prayed for god to help me. i called my husband on the blue tooth phone system. i knew -- i'm sorry. i knew he would not help me, but i wanted to hear his voice for a time. after six miles, god intervened as the car came very slowly to a stop. i pulled it to the left median.

with the car stopped, and both feet still on the brake, the motor still revved up and down at 35 miles an hour. it would not shut off. finally at 33 miles per hour i was able to turn the@@@@@@@ @ @,

toyota said they would inspect our lexus and contact us. after ten days we still had not received a callback. we called again and got the same assurances. toyota promised us they would look into our complaint several more times over the next few weeks. when we finally forced toyota to respond in writing we received a five-sentence analysis stating and i quote, when properly maintained the brakes will always override the accelerator. well, we know that's a lie. and we were outraged that toyota would suggest in that statement also that the brakes had to not properly be maintained in order for that to happen.

and the car had less than 3,000 miles on it. once again we contacted our dealer and expressed our disgust with toyota's handling. they recommended that we contact ncds which is the national center for dispute settlement and ask for an arbitration hearing. our ncds hearing was a total farce. the representative for lexus was mr. leonard st. amond, their tennessee district field technician. mr. st. amond, though only an hour away in kings port, did not show his face and he attended by speakerpho speakerphone. he insisted he could not re-create the incident and i had more than likely caused the problem by standing on the brakes while spinning the tires. i, of course, we were furious that toyota called us liars the second time. ncds denied our claim for a total refund of our purchase price for this possessed car

which is all we were asking for. in mid-march 2007 we turned to nhtsa for help. mr. steve chan and mr. scott young took over our claim and seemed to be receptive of our concerns. that sudden unintended acceleration in vehicles could cause serious injury and we're told possibly death at the time, that somebody was really going to get hurt. we furnished pictures of the car and documentation of what transpired since october 2006. on april 11th, 2007, mr. yawn flew to knoxville, tennessee, and drove to sevierville to inspect the car. my husband will address that in a moment. since neither toyota nor nhtsa took us seriously, we tried to let the public through the news media back then. we contacted numerous news agencies, a lot that are

probably here today, and we tried all types of media only to have one local station take an interest in our claim that toyota and nhtsa were ignoring the deadly problem. only one local station, watv channel 6 in knoxville did the story which aired in the spring of 2007. we repeated our strong belief that the problem was somewhere in the electronics. after the california crash that killed a california highway patrolman and his family, watv did a second story on toyota's sudden unintended acceleration. this was broadcast in february 2010 showing our original interview and a current interview. we never wavered from our belief that our problem was electronic. not wandering floor mats. we forwarded this 2010 video to toyota and nhtsa and received no response.

in early 2008 we reluctantly let go of our mission to persuade toyota and nhtsa to deal with the problem because the effort was too traumatizing. but we're here today because for the first time we feel our story has been given more than a token attention. and unfortunately it took almost four years and injuries and lives lost to congress to take up this important issue. in 2006, and '07, we hope our efforts might spare others the unnecessary terror and pain of an sua incident. and it pains our hearts deeply to realize that we failed, but this failure is surely shared by toyota and nhtsa today. in our view, they demonstrated an uncaring attitude and disregard for life. the results have been tragic. and today i must say shame on you, toyota, for being so

greedy. and shame on you, nhtsa, for not doing your job. it is our hope that this testimony will help all of toyota's customers in a way that toyota has not yet done to this day. once again i'd like to thank this committee for taking the time to listen to our story. it's about time we were heard. and hypothope that toyota and n will be held accountable for the decisions that cost some their lives. i thank you. >> thank you, mrs. smith. mr. smith, your opening statement. please pull that mike up and -- >> good morning. sorry, good afternoon. >> good morning. >> good afternoon. i would also like to take the opportunity to thank the honorable members of this committee for inviting us to testify today and to share our sudden unintended acceleration experience along with my thoughts and feelings.

as my wife told you, my name is eddie g. smith, i'm the husband of rhonda who you just heard speak. we purchased this 2000 lexus es 350 because of toyota's exemplary claim of safety. as we have young grandchildren. it has been a true experience trying to decide what to say today. you all heard my wife describe her experience. now take a minute and put yourself on the other end of the cell phone, listening to what you think are the last words you will ever hear her speak, in the imminent death of your life-long best friend and spouse and not being able to do anything about it. besides being the most terrifying, traumatizing experience of my wife's life, it is the most heart wrenching thing i've ever experienced. needless to say she was spared by the grace of god and is still by my side today. we have never been crusaders for any cause other than our god,

family and freedom, however we have been on a mission to get this thing justice to the american people, noticed and addressed and fixed. toyota was informed of this potentially deadly problem in 2006. and was warned by us numerous times that lives would be lost if this was left unattended. we phoned, e-mailed and wrote numerous letters trying to get toyota to fix the problem. our complete customer satisfaction that we received as rhonda said was a statement from toyota stating if properly maintained the brakes would always override accelerations. they called us liars. next toyota pushed us to arbitration with the national center for dispute settlement. this was one of the biggest wastes of my time and my wife's time and money we have ever seen. it was a complete setup trying to make us go away and we

didn't. once again we were called liers and accused of ruining our own brakes and transmission. now we have nhtsa, as you know nhtsa by their own admission on their website is -- it is our u.s. administration responsible for reducing deaths, injuries and economic losses as a result from crashes. their mission statement is to save lives, prevent injuries and reduce traffic-related health care and other economic costs. fist first we got the feeling that somebody believed us and cared enough to try and prevent any further loss of life. they even made a trip to inspect our vehicle. we finally felt our government would actually step in and bring toyota to task and resolve this issue, thus sparing others from going through the experience my wife went through. were we ever wrong again. now their claim was it was

probably the floor mats. this is a mass iive orange stickers were their fix. they went through the motions and tried to appease us with this absurd theory. i was present during the complete investigation by mr. yawn. the floor mat test referred to in mr. yawn's report as you have all read was a complete fabrication of the truth. this never happened and was never shown to us at any time during his visit. once again, we felt we had only received lip service. now that lives have been lost and sudden unintended acceleration seems to be an electronic issue, why does toyota and nhtsa not remember rhonda smith's please 2006 for someone to take heed and fix

this killer problem. my point from all this is to say that for reported reliable and safety concern company such as toyota claims to be, they sure took the easiest and cheapest route on the electronic issue brought to their attention by us in 2006. how many american lives should have been spared? our customer satisfaction from toyota and nhtsa has my wife traumatized, i was labeled a destructive, lying idiot and i paid the repair bill to fix the brakes on the lexus. many have experienced sudden unintended acceleration and unfortunately some are not allowed today to be able to tell their story. rhonda is here today to testify before this committee for all those who have died and their families. hopefully suggestion will finally be served. to toyota, i say your quality

and safety record has been totally destroyed by your past and present words and actions. now your integrity has come into play. how are you going to handle this? we're here today to help see that you don't shove the american people under the rug again, and that your true colors are finally revealed. to nhtsa, i feel you have totally failed the american public and i,%7wq=we?"óg stupak, ranking members and

other members of the committee, thank you for inviting me here today. my name is jim lentz, the chief operating officer of toyota sales usa. in my testimony i will address toyota's recent recalls and the decisive actions that were taken to restore trust in the tens of millions of americans who purchase and drive our vehicles. for two generations we've provided americans with cars and trucks that are safe and reliable, and we fully intend to produce even safer and higher quality vehicles into the future, even as we pave the way for the next generation of electric vehicles and hybrids that our society needs. in recent months we've not lived up to our high standards. our customers and the public have come to expect from toyota. put simply, it's taken us too long to come to grips with a rare but serious set of safety issues despite all of a good

faith efforts. the problem has also been compounded by our poor communications within our company and with regulators and consumers. while all auto companies have recalls and all auto -- major auto companies have experienced complaints about intended acceleration, toyota's recalls have caused concern among our customers. i would like to asurety commit and the american people that nothing is nothing more important to toyota than the safety and reliability of the vehicles that our customers drive. we're committed to not only fixing the vehicles on the road and ensuring that they are safe, but making all of our new vehicles better, even more reliability through strict quality controls, enhanced communication and redoubling our focus on putting the customer first. our 1,500 dealers are making tremendous efforts to complete our recalls as quickly and as conveniently as possible for our customers. some dealers were staying open 24 hours a day seven days a week

and they were repairing vehicles at the rate of about 50,000 a day. thus far we've repaired nearly 800,000 vehicles. we've rigorously tested our solutions and we're confident that these repairs to toyota vehicles will make them among safest on the road @@@@@j@ @ @

consulting firm to conduct a comprehensive independent analysis of our electronic throttle system with an unlimited budget. their interim report confirms that it works as it's designed. toyota will make the results of this comprehensive evaluation available to the public and to congress as soon as it's completed. so, why did it take so long to get to this point? with respect to pedal entrapment, toyota conducted investigations of consumer complaints which focused too narrowly on technical issues without taking full account on the way consumers used our vehicles. and in the case of sticking accelerator pedals, we fail to

promptly analyze and respond to information emerging from europe and in the united states. we acknowledge these mistakes and apologize for them and we've learned from them. we now understand that we must think differently when investigating complaints and communicate faster, better and more effectively with our customers and with our regulators. our recent voluntary recalls of certain 2010 prius and lexus hybrids and certain 2010 tacoma trucks illustrate this approach. we're also going further. our president akio toyoda has announced a top-to-bottom evaluation of our company and other principal regions. we'll ask independent outside experts to evaluate the findings to make sure we meet or exceed industry standards. we're expanding our network of technical offices in the u.s. so

we can gather information faster and respond more aggressively to incident reports, and we will install advanced brake override systems in all of our new models making us one of the first full-line manufacturers to offer this customer confidence feature as standard equipment. additionally, we're announcing that we'll install this system on an expanded range of vehicles, including tacoma, venza and sequoia models that are capable of accepting this new software. we have previously announced this system would be installed in camry, avalon, lexus es and is models. these actions underscore that toyota is going above and beyond what's necessary in terms of vehicle modifications and repairs to ensure that our customers can be completely confident and the safety and reliability of their cars and trucks. chairman waxman, subcommittee chairman stupak and ranking members as well as members of the committee, these are only

some of the steps that we're taking to earn back the confidence of congress and the american people. our 200,000 team members, dealership and suppliers in the u.s. are the backbone of that effort and i'm confident we'll succeed in receiving customer trust in the quality, safety and reliability of our vehicles. thank you very much, and i'm ready for your questions. >> thank you, mr. lentz. chairman waxman for questions, please. >> thank you, mr. chairman. mr. lentz, thank you for your testimony. your cooperation with this committee's investigation. these past few months have not been a happy time for your company or for your customers. people have been very anxious about what appears to be a rare situation, but it is a very scary and possibly fatal situation if a car has a sudden acceleration and the car seems

to be out of control. for the future, you're suggesting that you're going to put in a system where the brake will override the gas pedal. >> yes, 2011 model year vehicle. with the exception of one vehicle by the end of this calendar year, most of the vehicles that come into the u.s. will have a standard equipment the brake override system. >> that will be helpful, but let me ask you about the cars that are already on the road. people have these vehicles. you're not planning to do any retro fit of the brake over the gas pedal in those cars? >> there are seven of those vehicles currently on the road that we are retrofitting. >> seven models. >> camry, avalon -- >> you're going to rhett fit all the vehicles. >> those that are technically possible we're rhett fitting. >> is your microphone still working? >> the green light is on. >> okay. >> just try it a little closer, if you can. >> okay. >> how many vehicles will then be on the road with the possible

problem if the problem is due to something other than the mats or the sticky pedal? >> yrn the exai don't know the r of the vehicles on the road that has that system. it is the majority but i can't tell you the percentages, i don't know. >> the majority of the vehicles on the road already on the road that will be retro fitted. >> vehicles on the road will be retro fitted. >> okay. now i mentioned in my opening statement and it's been well publicized that i've been critical of your assurances to the american people and i think we have a film that we could show you, but -- let's see if we can get that in. >> how confident are you that this is it, that you have found the problem behind unintended acceleration in toyota? >> we're very confident.

between the first recall that we've had on the entrapment of the pedal and now this on the -- on the overall pedal, i think we have it. >> i have to be honest with you. most people are listening to you, and there's going to be an err of skepticism. you came to us in october and said that we believe unintended acceleration is caused by floor mats entrapping the pedal and then you came back in december and said, you know what, there may be sticking accelerator pedals. we'll be recalling the vehicles, and then finally last week or within the last two weeks you said we're going to stop production, and we're going to look for a physical fix. there is an err of questioning whether or not you real very your ducks in a row in terms of unintended acceleration. >> we are very confident that the fix in place is going to stop what's going on. >> we're having some trouble with our sound system. do you stand by that statement? are you still confident that the

two recalls that you've put into place will solve the problem? >> let me make sure that it's very clear on my statement. >> okay. >> unintended acceleration as i view it and define it is any time that a driver removes their input from the accelerator and the vehicle continues at some speed, and there are many different causes for that. there are mechanical causes, whether it's software issue in a transmission, whether it could be an idle up from an air conditioner, whether it could be a faulty cruise control, whether it could be a pedal, in this case an entrapped pedal. >> what concerns me, mr. lentz, there seems to be a difference between your statement that was given on television and the statements that other toyota officials have given to our committee staff. even your own counsel in a letter to us said that the sticky pedals become lodged in a partially depressed position which typically does not translate into a sudden high

speed acceleration event. also it appears that you're trying to give assurances to people, convince them that both of toyota's recent recalls will address the problem but our committee's investigation calls into accuracy your statement because 70% of the complaints of sudden unintended acceleration that come into toyota's customer call line were from vehicles -- drivers whose vehicles were not included in any of these recalls. how do you respond to that? >> well, if -- if i could. the week -- the week -- the day that i was in new york doing interviews, there were a number of television interviews. there was also an audio conference call with about 150 journalists, and if i could read to you just a response that i made to a question. >> it's different than the one on television? >> yes. >> and is it more consistent with what we're being told privately by your counsel and by

your own -- >> i don't know exactly what it is. >> let me ask you the question just directly. >> please. >> do you believe that the recall on the carpet changes and the recall on the sticky pedal will solve the problem of sudden unintended acceleration? >> not totally. >> okay. what do you need to do? >> we need to continue to be vigilant and continue to investigate all of the complaints that we get from consumers that we have done a relatively poor job of doing in the past. >> and why haven't you looked at the possibility of the electronics and the computer system being a possible fault as we heard from the first witnesses in our first panel? >> we have looked into the electronics, and based on the testing that we've done in japan and now exponent that you saw the initial response from their testing, we continue to test the etcs in japan as well as now,

what the exponent is doing, and we've not found a malfunction. it doesn't mean that we stop. >> but exponents evaluation has been very, very criticized as not very well done, not scientifically. the sample was too small, and unreliable report. do you have something more from japan that you haven't given us? >> i -- i am relying on the information that i have received from japan that they are confident the testing has been done in japan, and they are confident that there are not issues with the ecu. >> mr. lentz, my time is up. let me just tell you that i'm not confident that you're looking for something that you don't think exists because if you're not looking for it, you won't find it, and we had -- these two witnesses earlier who spent three hours and came up with the possibility that this sudden acceleration could take place because of the electronics and the computer system.

that report that you gave to our committee from that -- from that -- from exponent does not justify ruling that possibility out. >> it's not intended to do that. that's just the beginning of their investigation. it's -- they have many, many more steps to complete, and we'll provide you with that final when they get it done. that's just the beginning. >> that report is the beginning, but that only beginning -- that beginning only started this month. >> it started in -- >> in february of 2010. you're only starting to look at it, and you had an analysis done that was quite inadequate. we need to be sure that you're doing a full and adequate analysis of something you've denied but which other witnesses have shown us is very possible as an explanation for the sudden acceleration. mr. chairman, my time has expired. i know other members will want

to pursue this with mr. lentz. >> thank you, mr. chairman. mr. burgess, for questions. >> just to continue on that same line that the chairman was just following. yes, you have a responsibility to do these things, but there's also a federal agency who is responsible for traffic safety that has an oversight role here. what have they told you about their independent testing of your electronic throttle control systems? >> i don't know specifically of the results of the tests other than there have been many, many cases in the past that have been opened, investigations that have been closed, and they have not found anything. i can't tell you specifically what their testing paradigm was. >> well, of course, we've had so much data in front of us today. there's one graph here that shows the -- the complaints of unintended and uncommanded acceleration really start in 2002 which my understanding is that's the year that the electronic throttle control

actually came into being on your cars, is that correct? >> i believe 2001 might have been the first year on ls, but it's very close. >> what -- now you heard mr. gilbert testify here today and actually the response to mr. buyer's question that he cut no wires when he did his simulation. have your guys been able to reproduce his results without cutting wires? >> exponent in their initial study, i was up at exponent a few weeks ago, and they showed how they tested the vehicle for a vehicle short and other situations that involved the electronics from the pedal to the throttle ucm. >> were they able to reproduce what mr. gilbert showed? >> no. in every case they went into an error code. as you, we received mr. gilbert's information very, very late. >> let moo ask you this. you know, are you going to hire him now to -- it took you three hours to find the problem. if he's correct, we have to make

that leap of faith. >> but quite frankly we encourage people to try to find it. it's not in our interest if a problem exists to not find it and not figure it out, so if it exists, we encourage the mr. gilberts of the world when an industry has been looking for this for 10 years. >> it may not be fair to ask you to testify to this. you heard his herselfmony. do you or someone any it is possible think it is possible what he described to happen, can the correct amount of resistance and putting the five volts on top, is there anyone in your organization who can talk to us about that? >> vince here. he is one of our attorneys. he has been working with expostseason and we would like

to get them and mr. r mr. gilbert together. i'm not an concern. i would probably mess this up. >> since we're taking testimony under oath, i don't know what is permissible here. let me just ask you questions on the fix. they have been johnny on the spot with this. they have been getting people in and it takes 20 minutes to fix it. if they have been fixing the wrong problem and they need to be developing what you called thed a vantsed override for the brake system then you wonder if we're going to have to call people in for another fix to the problem. ob what actually fixes the accelerator pedal? what have you developed that will fix that problem on the recall? >> there are two different issues. in the case of a sticky accelerator pedal, they are actually putting in a precision

cut steel plate. >> we call that a shim, right? >> yes. >> how many different sizes of precision-cut plates are you produceing? >> i believe it's either seven or nine. >> seven or nine. >> yes, yes. >> and presumably this material that's hydroscopic and absorbing water and becoming incompatible with proper function, presumably that's a precision manufactured component, is it not? >> i would assume so. >> the fact that you have to seven to nine different-sized shims. >> i think it has to do with the amount of wear that's actually on the shim, so when the technician takes the pedal off, they actually measure how large the gap it s and that determines the size of the shim that they put in, the steel plate. >> but it does -- a precision designed, grommet or the shim that we're talking about, it just doesn't seem reasonable

that there would have to be so many different sizes in order to fix the problem if the problem was the pedal absorbing atmospheric moisture. >> the size difference is in very small millimeters. to the naked eye you can tell the difference between the biggest and the smallest, but as you go down the road they are very, very close in total size, but what it really does is, you know, it -- it ensures that excess friction won't build up in the pedal, and what's happened in the past is with wear it gets shiny, and once humidity is added to that it actually builds up too much friction, and that's when the pedal starts to bind or possibly stick. >> now this fix on this recall, i mean, national highway traffic safety agency administration, they have -- they have signed off on that and feel that this fix is the problem. have they looked at it themselves? >> they don't sign off.

we show them our solution and they don't disagree, so it's -- we are -- we are confident it's the right fix. >> what about the -- the fix of putting the advanced brake override system in? >> advanced brake overrides in production vehicles is already started on vehicles like es and camry. >> but for those of us who have older model toyotas that wanted to have that degree of safety built in for our families, how do we go about getting that done? >> it's a reflash on those seven vehicles and it varies by vehicle and by model year. >> you mean a reflash, a reset of the computer. >> a reflash of the computer to add that. >> and technically how difficult is that to do? >> it takes anywhere from 15 to 30 minutes. >> and how much does it cost? >> we're providing that. >> it just seems that that's something that really should happen in addition to all these other things just to be on the safe side. >> it's for added consumer confidence. >> thank you. >> thank you, mr. burgess. >> while on this rebooting of

this computer there, why only some of the vehicles going to be rebooted, not the other ones? >> depends on the feasibility of the unit. some of the computers have different types of chips in them. >> okay. >> some are not rewritable basically. they are hard-coded. >> can't you fix it and rewrite the programs so that all your vehicles are covered? what do you say to the owners who are not going to have this safety feature added to it? they will just continue to drive down a road and hope they don't have a sudden unintended acceleration? >> again, the incident or possibility of that happening is very, very slim but understanding if it happens to you it's a very, very important incident. >> sure. very, very slim. let's take a look at this and from slim let's go to shim. you talked a lot about the slim with mr. burgess, but the documents we asked for, and i put this in our letter on february 22nd, on the second page, i was going to ask you this question. we wrote to you on february 2nd requesting any analysis that toyota -- that shows sticky pedals can cause some unintended

acceleration. you didn't produce any analysis. in fact, your counsel actually said, quote, typically a sticky pedal does not translate into a sudden high speed acceleration event, so this shim isn't going to solve the sudden unintended acre acceleration. >> it will prevent unintended acceleration. high speed, most likely not. >> as chairman waxman pointed out of the complaints you have in your own database 70% of the unintended acceleration events in your own database involves vehicles that are not subject to the floor mat or the sticky pedal recall, so 70% of the problem isn't being addressed by the recall, correct? >> a couple of issues. most important part about it is those in many cases are customer -- customer generated i

don't want to call them complaints but feedback to us that they are having an issue. what's most important is that we are able to investigate those as quickly as possible so we can understand chaes going on, and in the past we have not done a very good job of doing that. >> okay. haven't done a very good job doing that. mr. kane in the last panel testified over 2,000 complaints and when he went through it he figured maybe half of them, 1,000, 1,130 some cannot explained other than what the driver said other than the sudden unintended acceleration. do you agree with that. >> i'm not sure if his database is sudden or unintended. i don't want to get into a debate over what is here. there is a big difference between unintended and sudden unintended. my understanding is that the database through noticea includes other things such as surges, whether it be from a cruise control, a transmission or other issues, so i -- i can't

tell you from the date that they are using it. >> but some of the complaints are like recently. i put it in, park, pop over a curb and hit a tree and one gentleman went off a cliff and his wife died. >> yes. >> and that wasn't a high speed but that was a sudden unintended acceleration. it doesn't always have to be at high speed. >> correct. >> all of them have to be taken seriously. >> yes. there's no question. >> so 70% of all those complaints in your database we don't have annence for yet? >> there are answers with other mechanical breakdowns from transmissions, from other engine surges. there's pedal misapplication that's the possibility as well and we're not here blaming customers but it does take place. >> but it sort sounds that way. i don't mean to be nitpicking here, but when mr. wax man asked you a question about unintended acceleration you said as i would define it. that's when you said to the chairman, and it seems like when we get this sudden unintended

acceleration it's the way toyota wants to define it, not the customer. >> well, but i think we're defining it as a customer is defining it and that is a much broader spectrum of any type of -- any type of surge or movement in the vehicle that the customers doesn't expect to take place, and that can happen from a number of different sources. to me i'd rather have the broad spectrum to look at than a more narrow spectrum of high speed. >> well, let's talk about the customer here because this started, as you said in the 2000-2001 model year. by 2004 nhtsa presented toyota with a document showing you had a 400% increase in complaints. that was in 2004. we learn, and you evidence or mentioned in one of your interviews, that you had a recall in europe in what, april or may of this sudden acceler e

accelerat accelerator? didn't you do some things in england, in europe, in ireland? did have you a recall there? >> that's on the sticky pedal? >> right. >> yes. >> and in europe or excuse me, edge lan and ireland, is that just sticky pedal? >> that was a sticky pedal in europe. >> and that's in response to sudden unintended acceleration? >> again, it is in response to unintended -- the possibility of unintended acceleration which was a safety issue. >> to me -- >> when you did recall and you're open ended you're fixing you're. did you notify nhtsa of this? >> we knew about it. >> did you notify nhtsa? >> we notified nhtsa as soon as we knew the situation in the wait. >> well, wait a minute. >> november 2009. >> it took you until november of 2009 when you had a 400% in complaints since 2004 to realize

that there might be a problem in the united states after a recall in europe? >> i'm speaking specifically about sticky pedals. thoept go back to 2002. the sticky pedal event began in the united states. there was one instance i believe it 2006 or 2007 but it was october 2009 that we had three corollas and that generated our investigation and we notified noticea immediately that we had seen that. you still, do you have any analysis, every evidence that sticky pedals can cause a sunday unintended acceleration. >> it depends on the definition of sudden. if it means that you can be depressing a pedal, take your foot off the pedal and the car continues at speed, it does cause that. >> typically does not translate into a sticky pedal.

>> not high speed. >> and 70% of your customers in the database, we still don't have an answer for their unintended acceleration. >> there are many factors that lead to it. >> but 70% of them we don't have an answer for, is that fair to say? >> that's probably fair to say. if i can show you one more. this is saturday's "washington post," okay, february 20th. suspicion lingers over acceleration in camrys, okay? and the reason why i bring it up because they cite three fatales of 2005 camrys and it says in each of these three fatal episodes, the car involved was a 2005 toyota camry, a model that the company has indicated is free from acceleration defects. it's not been recalled for either the sticky pedal or the floor mat interference. is that true? >> i believe so. >> any suggestions on why the camry has this acceleration

problem? >> in -- when we -- the model year changed in 2004, there was an acceleration issue that had to do with the transmission, that there was a surge between 38 and 42 miles per hour. and that surge was caused by a torque converter locking up. it wasn't very smooth. it was a shift shock, basically. and that was reported by customers as an unintended acceleration. that software was changed. and that tended to subside that particular issue. >> have you gone back and fixed the software in the 2005 camrys then? this fatal is the one that went over the parking lot and over the 70-foot cliff. >> again, i don't know -- >> you have put out a recall on the 2005 camry to fix this? a recall? >> on the pedal? >> on this torque issue you're talking about? >> the torque converter was 2004. >> these are 2005 camrys.

do we still have toyota vehicles that have acceleration and we don't know what the problem is? >> there's the possibility through either mechanical or human or some other type of error that could cause that. >> thank you. mr. barton, questions? >> thank you, mr. chairman. thanks for those questions. i thought they were excellent. mr. lentz, what's your background? you said you're not an engineer. what are you? >> sales and marketing. >> sales and marketing. i have a degree in marketing and economics and an mba in finance. >> okay. so you do agree from a marketing standpoint that what's going on now is fairly detrimental to your company? i was in one of your -- two of your principal dealerships in texas yesterday met with me, one in houston and one in arlington. and their sales are down 30%. i would assume from a marketing standpoint, that's not a good thing. >> no, sir, it's not. >> okay. you're the ceo of toyota in the

united states. do you -- how much authority do you have to solve this problem? can you pretty well call the shots or do you have >> well, i'm the chief operating officer for the u.s. from a marketing standpoint, i call the shots. if you're talking about from a defect standpoint or a determination of a recall standpoint, those decisions have been made in japan in the past. >> i'm not saying that is a bad thing. i just want to know how far you can go if you make a promise today you can deliver on it. >> that is changing. there are a number of dimplet organizations being put into the company that are going to make things much more transparent around the globe, much more transparent with regulators and allow us to have input into

defect decisions that in the past were always made in japan. pa lw e japan. there will be a north american committee that makes defect recommendations now. and there will be a process if we don't agree with the decision of that committee that we can have a process to override. to date, that has not existed. >> now, in a prior panel, i don't know if you were in the room or not, but we had a couple from -- i believe they were from tennessee, the smith couple. and the wife, her car experienced out of control acceleration for a number of minutes. i mean she was literally in this car long enough she could, you know, she put it in neutral. she put her foot on the brake. she tried to turn the ignition off. she put it in reverse. she called her husband on the cell phone. that was not a sticky pedal because of a floor mat. i mean something happened to

that car that's unexplainable so far. now we normally when something bad happens in a product, you know, if there's a plane crash, we go to the scene and investigate the plane. if there's a bridge collapse, we go to the collapse of the bridge and we look for structural defect or design defect. if there's a building collapse -- in this case, we have a car that had, you know, out of control acceleration and apparently all that was done was they went to a dealership and did a routine computer program review. why has toyota not obtained that vehicle and taken it to your laboratory and done everything possible to discover what caused the malfunction? >> i don't know specifically in her case. other than i did hear her comment that she had mentioned that a field technical specialist looked at her car.

>> a field technical specialist? >> right, somebody that works for toyota. >> okay. so you said one person that you're paying $50,000 a year and they spent an hour and they hooked up the little program and said we don't see a problem and filled out a form, we don't see a problem. you have a buimultibillion doll company that is experiencing a multibillion dollar hit in the marketplace, why in the world won't you get that vehicle and do everything possible to determine -- you know, it really doesn't matter that you got five million vehicles that are performing flawlessly if you got 10 that have failed. her problem is not a floor mat problem. it is not a floor mat -- >> i don't know. >> well, i know. i take her at her word. she's going down the highway at 100 miles an hour, she has enough sense to pull the damn floor mat from under the pedal

if -- i know that and you know. that you can't say that because of all the lawsuits. but why don't y'all get the car that's have had the problem and if you need nitsa there to verify what you're doing, get them. but if i'm president of toyota, i'm going to get the cars that we know have had a problem and i'm going to do everything i can to find out what caused that problem. and then i'm going to fix it if it's fixable. this -- you know, with gulf states toyota and those are good people. they want to sell your cars. and they're doing this fix and in my opinion it's a sham. not because they're not fixing that. they're making it feel better. they're shortening the pedal about an inch and a half and they're putting this shim that mr. burgess talked about so it feels differently. but unless it is a floor mat issue, which some cases it may

be, you're not solving the problem that mrs. smith had. she didn't have a floor mat problem. so, again, why don't you get that car? it's still in existence. check it out. tear it apart. do whatever -- and do it with witnesses that are credible because my guess is you have really, really smart engineers. >> yes, sir. >> hopefully they'll shoot straight with you and whatever the issue is, it is, you know, i'm an engineer. engineers are trained. we identify the problem, develop an opt mall solution, implement the solution. you probably can solve this problem if you really tried to. >> well, in terms of going out and seeing what the situation is, we -- today we have two engineering centers here within the u.s. with about 80 engineers.

we're adding three more of those. because our goal is on any unintended acceleration is to be able to contact the customer -- >> why won't you get that car and check it out? >> that's what i'm saying. the goal is with these added centers and added engineers is within 24 hours we want to be at that vehicle and we will inform them of the situations if they'd like to join us. they have joined us in some of the cases in the past. so we can get that car and see exactly what is going on. >> but if you got mrs. smith's car -- >> the smith car, i have written down to find out what happened with that. i have to tell you -- >> again, my time expired. if i'm ceo and i have the authority, as soon as i walk out of this hearing, i pick up the phone and i say get that car. if i have to pay $100,000, get that car, put the best engineers on it. let's tear the damn thing apart and find out what's happening to it. because can you do all this

other stuff. but if you don't go where the problem is, you know, you're probably never going to figure out what's going on. >> i can tell you listening to mrs. smith, i'm embarrassed for what happened. and we are going to go down and talk to them and get that car so that they feel satisfied. i want her and her husband to feel safe about driving our products. i was embarrassed to hear the story. >> well, my time expired. we want -- i mean we're happy -- you know, i have a gm assembly plant in my district. so i've got a good relationship with general motors. i have a toyota subassembly vendor plant in my district that makes component parts for toyota. so i'm not on any -- i want the truth. and i want whether my constituency wants to buy a gm product or a toyota product or any other product in the

automotive sector to feel those products are safe -- period. and i have confidence in your engineering department. you can solve it if your legal department will let you solve it. thank you, mr. chairman. >> mr. dingle waived the opening statement and waived questioning the last witness. i'll give him leeway with this potential. >> i thank you for your courtesy. mr. lentz, please tell me the date that toyota first heard of incidents of sudden acceleration in its vehicles sold in the u.s. >> i don't know the answer to that. >> please submit that to the record. now, mr. lentz, please tell me the date on which toyota commenced the first recall to address this problem in the united states. >> if i don't know the answer to the first one, i don't know the answer to the second one. >> please submit that for the record. i had heard that the first notice of it in the u.s. was in

november. and that your first notice of it in europe was in may. is that correct? >> i -- >> yes or no? >> i'm sorry, i thought when you talked about sudden acceleration. >> i'm talking about sudden acceleration. >> but in november -- sudden acceleration has been around in the industry for 15, 20 years. >> all right. i just want an answer, not a speech. now, since 200 1shgs how many complaints of sudden unintended acceleration in vehicles sold in the united states has toyota border sales usa received? >> i don't know that number. >> please submit that for the record. how many of these complaints has toyota motor sales usa forwarded to nitsa? >> i don't know that number. >> please submit that for the record. mr. lentz, yes or no. prior to the u.s. recalls, were you empowered to authorize recalls for toyota products

manufactured or sold in the united states? >> no. >> who was responsible for that? >> japan is responsible. >> japan is responsible. now, mr. lentz, yes or no, is it true that toyota recall process for vehicles manufactured and/or sold in the united states requires the decisions concerning these recalls to be made in japan or with japanese oversight? >> yes. >> mr. lentz, yes or no, is it true that toyota had not reached a decision about whether to recall vehicle models linked to sudden unintended acceleration prior to being visited by acting nhtsa administrator ron medford in december 2009? yes or no? >> i think you have to be more specific about is that the floor mat recall issue or is that the sticking pedal issue? >> well, apply it to both.

>> okay. in the case of the sticking pedal issue, i know mr. medford went to japan. i can't tell you specifically if that is the reason. obviously, they were clear with us that we were going to do something with those vehicles. >> and you had not previously until that time done anything? >> in the case of the sticky pedal situation, we first -- i first knew about that in november of 2009. we had reports of three vehicles -- >> and he went there in december of 2009. >> correct. >> had you done anything about a recall prior to that time? >> no, sir. it was still under investigation. >> all right. now, mr. lentz, yes or no, did acting administrator medford's december 2009 visit to japan in discussions with toyota executives have any influence on the decision to recall vehicle models linked to the sudden

unintended acceleration problem? >> again, if we were speaking of the sticking pedal, i don't know specifically. i was not in the meeting. i would think it probably did. >> in correspondence addressed to this committee, certain officials communicated their concern that the united states government's financial stake in chrysler and general motors represents a conflict of interest that may be influencing its regulation of toyota. if that is true, i am outraged. do you believe that that statement is true or not? >> i don't believe that's true. i think the government's acting fairly. >> thank you. now, mr. lentz, yes or no, is the early warning of possible defects different in japan than in the united states? >> i'm not familiar with the process in japan. >> you would submit that for the record, please?

mr. lentz, are the japanese requirements in regard to this matter more or less stringent than american standards? >> again, my responsibility is the united states. i don't know the standards for japan. >> now, mr. lentz, if the japanese requirements are less stringent, does that affect how toyota evaluates potential defects in its vehicles and influence what information the company provides to u.s. regulators? yes or no? >> i would think not. the decision to make a recall in the united states is based on our experience in the united states. >> yes or no. has toyota definitively ruled out nonmechanical failures as the source of sudden unintended acceleration in vehicles recalled in late 2009 and early 2010? >> we never rule out anything that could cause sudden unintended -- >> so you would not rule that

out? >> we are vigilant and continue to look for causes. >> has toyota definitively determined that electromagnetic interference or other failures in electronic throttle controls are the cause of sudden unintended acceleration in the vehicles recalled in 2009 and early 2010, yes or no? >> we are studying through the exponent study that you have now which was preliminary. there's a lot more investigation to go on. so it's being looked at as well as there is going to be an advisory board on quality and safety. >> thank you. >> for the united states. >> i understand from your testimony that toyota has called upon exponent to conduct tests on certain toyota vehicles to determine possible causes of unintended acceleration. that is true, is it not? >> exponent, yes.

>> did the report conclude that electromagnetic interference is a potential cause of sudden unintended acceleration, yes or no? >> it has >> the -- it has not been tested yet. it is going to be tested and we will provide you the results when it is available. >> how many vehicles? >> i do not know that. >> how many did they not test? >> when i was there, i saw five different models being tested. >> would you please submit the response to those questions for the record, please? mr. lentz, yes or no, do you feel this is an adequate sample of vehicles? five vehicles, sir? >> if you look at the etcs system, the system from vehicle to vehicle is very, very similar.

the throttle body may be a different size but the general architecture of the system is similar. but the general architecture of the system is similar. >> mr. lentz, i'm a poor polish lawyer from detroit. would you please tell me yes or no so i can understand it? >> i -- i don't know how to answer that in a yes or no. >> all right. >> i think they are testing multiple vehicles. they're testing the system not particularly how does it work on a camry versus an fj cruiser. >> thank you. now yes or no, are the event data recorders installed in all toyota vehicles sold in the united states? >> as to have day, no. >> as of today? >> as of today they are not. >> then -- as of today, no. >> they are not in 100% of the vehicles. >> yes or no. would these edrs contain information such as recordings of vehicle component failures that would be useful to

investigators in determining the cause of an accident? >> i don't know exactly what they provide. i can tell you they provide information five seconds prior and one second after an accident. i can tell you that by -- >> would you please, mr. lentz, submit to me and for the record the answer to that question? now, can data from, again, yes or no, from edrs installed in toyota vehicles be easily read by nontoyota personnel such as nhtsa investigators? >> yes. with the proper scan tool of which we are going to produce and get 100 of them in the united states by april. we will make -- >> so they have not been previously made available? >> there's only one prototype in the united states today. >> what percentage of your vehicles imported into the united states were manufactured here have edrs? >> i don't know the exact

percentage. i think it's all vehicles except for -- if i can look at notes, i can give you -- >> please submit that for the record. mr. lentz, in general prior to toyota recall this is year and last, by whom and where could such data from toyota edrs be read in the united states? >> i don't know the answer to that because -- >> all right. if you please, mr. lentz, submit that for the record. >> there's one prototype tool available in the united states. >> so if you ever wanted to look at that, had to look at that prototype, right? >> and i don't know how accurate the prototype tool it is. >> you don't know how accurate it is? >> the standard for edrs comes in september of 2012. >> now, mr. lentz, yes or no, did nhtsa require toyota in 2006 to conduct a test on electronic

throttle components for 2006 camry? >> you could repeat the question? >> did nhtsa require toyota in 2006 to conduct a test on an electronic throttle component for a 2006 camry? >> i don't know the answer to that. >> please submit the answer for the record. now, mr. lentz, if so, did toyota or a designated third party conduct the test? >> i don't know the answer to that. >> if it was conducted by a third party, will you please tell the committee its name and submit an answer to those two questions for the purposes of the record, please. >> congressman, i don't have the answer. we can get that information for you. >> now, are reports on this kind of inquiry generated by toyota by third parties or by its own

internal investigations submitted to nhtsa? >> i'm not sure i understand the question. >> well, you have these studies being made in house or by others. and the question is, are the reports on those studies submitted to nhtsa or not? >> the study that is being done by exponent will be given to public, congress and nhtsa. >> have they done so prior to this time? >> i don't know what specific study you're speaking of. >> i'll let you choose. have any of them been given to nhtsa? or have they not? >> i don't know given, you know, given my responsibility which is on the sales end of the company, i can't -- >> you have been very gracious and kind with your time. but what i'm trying to figure out is are you responsible for these matters? you don't seem to have the information that i have been questioning for. and i'm curious, you told us that you were responsible for sales. you are responsible for

manufacturing? are you responsible for safety? are you responsible for decisions of this sort? are these decisions made elsewhere in japan? >> i am not responsible for manufacturing. i am not responsible for defect or quality decisions. defect decisions, recalls specifically, are, in fact, made in japan. >> mr. chairman, you have been most generous with your time. mr. lentz, i thank you for your courtesy. thank you. >> mr. rush for questions, please. >> thank you, mr. chairman. i see some attendees are who are sitting in the front row with buttons on that say i am toyota in america. are these some of your employees? >> these are some of the employees from the assembly plant that do a great job. >> i want to commend you on your diversity. i think you have a very diverse

workforce. i want to welcome all of your workers here. >> thank you. they're hard-working americans. >> thank you. we've heard some compelling and disturbing testimony from the smiths this morning. and the committee learned over the course of this investigations that mr. and mrs. smith were not alone in their experience with sudden unintended acceleration. and also with their frustrations of dealing with toyota. in fact, toyota received thousands of complaints from its customers about frightening, sudden unintended acceleration incidents. many of these incidents, unlike the smiths' resulted in serious injuries or even fatalities. i would expect that your company will respond with a sense of urgency and complete a serious investigation on these problems. but let's not exactly what

toyota did in the smith's case. one of the most tragic things the committee laerd duriheard d investigation is how dismissive toyota has been on the customer report of sudden unintended acceleration. mr. lentz, just to tell you, i have just received a few moments ago text written to one of my staff members. from my district in chicago. and i'm going to try to pull it up. it says here -- it's from one of the executives at a local newspaper in the chicago area.

and it says stephanie, if representative rush wants to put a face to this toyota mess, my sister-in-law died december 28th in a car incident near dallas, texas. she and three others were riding in a toyota avalon when it left the road, hit a tree, flipped in the air and landed up side down in a pond. everyone died. police said there were no evidence of any braking, given rise to the idea that it was an accelerator problem. my sister-in-law, sharon love ransom, was a senior executive with ibm. this is another indication. you've indicated to this

committee this morning or this afternoon that you will retrieve the smith's car. would it be asking you too much to look into this matter and if possible, retrieve the car involved in this accident? >> if it's the accident that i'm thinking of, and we can have our staff check, both toyota engineers and nhtsa did, in fact, inspect that vehicle. >> do you know what they determined? >> i don't know what was determined. my understanding -- >> would you check into this? >> yes. we'll check into it. >> has there been any issue with avalon brand? >> there have been cases of both sticking pedals as well as floor mat entrapments, yes. >> mr. lentz, do you have any reason to believe that out of the thousands upon thousands of

complaints that toyota or lexus owners are inventing these terrifying stories about their driving experiences? >> no. but from an engineering standpoint, it's critical that we get information so that we can go and investigate. today, in many cases, information that is submitted on the website, unless there is an investigation open, we don't have the name of the customer or the full vin number. i think going forward, one thing that we should think about doing is make that available to the manufacturers so we can cross reference that against our data bases and we can investigate these much sooner and not have to wait for an investigation to be open to be able to do that. >> from a marketing perspective, don't you feel as though toyota and yourself, don't you feel as

though you owe your customers who some have gone through some serious injuries a lot of hurt and pain, don't you feel as though you owe them a sincere apology for your company, your vehicles, your product causing them sincere pain? can't you just apologize? >> yes, sir. yes, sir, we have. because i will tell you, and whether it is an accident, an injury, i mean we heard the smiths today. you didn't have to have a death to understand the terror that she had from that accident. i mean that's a terrible thing to have to put one of our customers through. and it doesn't even have to be an accident. we have apologized to our consumers just for the concern that we have given them with their current recall vehicles. we are sincerely sorry for that

concern and anxiety we put people through. i mean myself, my wife drives a toyota prius. it's a recalled vehicle. my son drives a prius. it's a recalled vehicle. my mother-in-law is in an es 2006. my father has a sequoia. they're recalled vehicles. you know, i want to make sure that my loved ones are safe as well. >> from a -- switching back over to the engineering, but you still have been pretty evasive here about the cause, the actual cause of all this pain and suffering. there is a lot of inconsistencies and a lot of angles you're operating from. i'm not sure if the apology -- what is it based on?

is it sincere? is this really a problem from an engineering perspective that you are assuming responsibility for? >> any time there is one death in one of our vehicles, that pains us to have that take place. regardless of how it happens. but it's critical today. and we weren't doing a good job in the past of investigating those quickly enough, especially when it had to do with unintended acceleration. and with adding these new engineers, these s.w.a.t. teams that we're going to be able to get on site as rapidly as we can, our goal is to make it in 24 hours. we need to be able to do that so we can understand what's happening and make the necessary changes so that it doesn't happen again. i can tell you i lost a brother in an accident a week after his 30th birthday. and that was 20-some years ago.

and there's not a day that goes by that i don't think of that. so i know what these families go through. >> t mr. lentz, it seems to me that toyota got the first item back in 2000 when the british ordered a lexus recalled due to acceleration problems. they got a second in 2003 with the canadian recall. toyota is a global corporation. those two alarm bells should have sent your engineers scrambling to figure out what was wrong and what was needed tock done to fix the problems. -- to be done to fix the problems. instead, the same types of problems cropped up in

additional toyota models resulting in the recalls that brought you here today. here today. so instead of deploying your everything nears after toyota got those early warnings in 2000 and 2003, they waited until problems cropped up in the united states and then toyota deployed lawyers and lobbyists to convince the department of transportation that this was a small floor mat issue and not something more serious. and that, mr. lentz, has done a disservice to toyota's kists and u customers and ultimately to toyota's dealers and employees. so according to documents obtained by my office, toyota recalled a lexus in the united kingdom in 2000 and a sellica in canada in 2003 because of floor

mats were entrapping the accelerator pedal and the exact same problem that has caused fatalities in this country. why didn't toyota take immediate action to prevent the much later accidents that toyota clearly knew the problem existed as far back as 2000? >> specifically on those two incidenc incidences, i can't tell you the specifics of those. i do not know. but i can tell you that a weakness in our system has been within this company we didn't do a very good job of sharing information across the globe. most of the information was one way. it would flow from the regional markets like the united states, canada, or europe back to japan. >> okay. so what you're saying is that ultimately the decisions are made in japan? >> in the case of -- >> and notwithstanding problems

that are identified in the united kingdom, in canada, the information goes back to toyota headquarters in tokyo and whether or not you in america are given orders to correct the problem, identify it in other countries, is not in your hands. is that what you're saying? >> correct. but that is changing. there is going to be a number of different groups set up. there is an overall quality group that toyota is going to chair. >> well, you know, that's -- that's an important change. obviously it is a policy that i'm sure all americans are shocked to learn existed. that is that this system of quality control, the toyota represents to be at the heart of their corporation was not something that shared information about defects in products that were being sold in the united states even though it was identified in other countries. and that's just unacceptable. just plain unacceptable to the

consumers here in america. let me move forward quickly if i can. you told the "today" show that the sticky accelerator pedal and the mat problems were the only problems. and you fixed them. you said today that you have only just begun to test whether or not the electronics are the problem and that you acknowledged that you can't rule out that possibility. so the reality is you don't know what is causing all the vehicles to suddenly accelerate. and you don't know if you've solved the problem, do you? >> there are many, many causes. in terms of the recalled vehicles -- >> but you don't know if you solved the problem? >> i don't think anyone, any manufacturer knows 100% exactly what is causing it. because if we did -- >> what i'm saying since you're only beginning the investigation, you don't know if

you've solved the problem, is that correct? >> etcs has been looked at in the past in japan as they develop the products. but -- >> you said you had solved the problem. the truth is you don't know if you have solved the problem. isn't that correct? >> let me clarify my statement. in terms of solving the issues of those recalls, we solved the problem. and if in documents that we have also sent you, when i did a number of interviews with journalists, i made it quite clear that my feeling is -- and this is a quote -- my feeling is these two fixes solve the issues that we know of. are we going to remain vigilant? of course we will. but we are confident that entrapment is a cause. we are confident that the pedal issue is a cause. and we are confident in those two fixes. but we are also confident that from what we know today it is not an electronics issue.

>> what you know today, but, again, you're only at the beginning of your investigation. so you don't know what caused the problem, do you? >> we have not seen failures in the etcs and we have -- this isn't the first time etcs has been looked at. it is the first time that we've gone to exponent to look at it. when we put in our quality north american advisory board, they will have total independent control of a another study of their choosing. now that's going to take place. that committee is going to be in place by the end of march. so there's going to be another study soon right after this. >> and is the same thing true for the problem with the electronic throttle control system in your vehicles? do you know what's wrong there? >> that's what i'm talking about. the etc is electronic control, sorry. >> you don't know what is wrong there either? >> again, we have not seen failures. it has been looked at in japan

in the past. >> if there is no possible problem with your electronic throttle control systems, why do you need to find a way to override the electronic throttle if there is no problem? why do you have to find a way to override it? >> you always have to keep your eyes and ears open. in the event there is something. >> you can't have it both ways. you can't say there's no problem but you're trying to find a way to override something that's not a problem. it leaves people with the impression that there must be a problem. >> but that's why you have to continual test and test and test in the event that something develops. it could be -- it could be a change in the emi. it could be a number of different things that we have to continual test and verify. >> i appreciate that. but i just wish that there was a little bit more humility here with regard to what you don't know, that you just say you don't know and then the public as they're driving around carries that kind of cautionary warning with them as they're

driving pending the completion of all of your studies. thank you, mr. chairman, very much. >> thank you. next for questions we go to miss beget. >> thank you, mr. lentz. i probably hold the record among the committee members because i have three camrys. so i'm very, very concerned that we get this right just like you are for your family. i want to ask you a couple questions. the first one is you just told mr. marky that this is not the first time that you folks have looked at the etcs. and you folks provided a number of documents in response to our february 2nd, 2010, request. have you, as far as you know, has toyota provided all of the documents relating to previous tests of the etcs? >> again, i can't tell you.

it's a test or just development cycle. >> well, i -- i understand -- i mean we know that you've provided thousands of pages of documents relating to the development. what we want to know is are there additional documents relating to the testing of the etcs that you just testified that you folks, that it's not the first time you looked at it. and have we received all the documents relating to previous testing of the etcs? because that's what we care about here. >> i understand. i'll have to check. i don't know specifically. >> okay. if there are additional documents, will you provide those, please, to this committee? >> of course. >> now the only document that toyota has produced to us that we have seen that claims to address the phenomenon of sudden unintended acceleration is this february 2010 report that we've been talking about that was conducted by exponent. my first question is that report was commissioned in december

2009, two months ago by toyota's defense attorney, correct? >> yes, i believe so. >> and how much money was paid -- i know mr. boyer would want to know the answer to this question. how much money was paid to e exponent? >> you would mind supplementing your response with that information? was it over $1,800 as far as you know? >> i am sure. >> i am sure it is, too. >> my understanding is we have given them an unlimited budget to test as much as they can to find out about that. >> and i'm glad you have. but i don't -- i mean you just as you wouldn't question efficacy of what the previous witness testified to because he was paid a few thousand dollars. >> right. >> you wouldn't think that that would taint the scientific results of your experts either, would you? >> well, and that's why we have

an advisory board -- >> yes or no is a good answer for me. >> i can understand why you would feel that way. >> i mean you wouldn't think that your people would be tainted any more than the last witness would. >> no. >> by being paid some kind of a money, correct? >> no. >> thank you. let me ask you this. let me ask you this. the exponent report was considered to be an interim report, correct? so they're still conducting tests. >> correct. >> is that right? okay. will you provide the committee with the final test results when they are obtained? >> yes, we're going to make that public. >> whether do you expect that to happen? >> i don't know. >> now it's my understanding that toyota's counsel who is sitting right behind you told committee staff today that toyota had, in fact, replicated dr. gilbert's tests. and that toyota was able to produce the same conditions without triggering an error. is that correct?

>> yes. >> when did exponent do that test? >> the wee hours of the night last night. >> so this is new information for us? >> yes. >> i'm assuming toyota will be willing to shart results of that testing also with this committee, correct? >> yes, we will. >> now, in your opening statement, you said that toyota had done extensive testing of electronics and found no issues. do you wish to change or clarify this remark in light of the findings disclosed to the committee today? >> again, i'm relying on the information from japan that they told me they have done testing. i have not seen it myself. i have not seen test results. i'm relying on their information to me that they have tested it extensively. >> okay. in light of the new revelations revealed by your attorney mr. hester that exponent was able to

replicate the same conditions as dr. gilbert last night. does that change your testimony today? >> i'm not sure i understand. >> okay. late last night, according to your testimony -- >> okay. now i understand. >> okay. >> we will provide that. i will tell you, again, i don't know exactly how mr. gilbert has done this. >> are you disagreeing with xpoen snent. >> no, i'm not sure what mr. gilbert has done is necessarily something that is real world that can happen. and i can also tell you that exponent was also able to do this on a competitive vehicle with the same result. so this is not unique to toyota. >> okay. now i have one last question for you. i would assume, in light of the questions raised by dr.

gilbert's testimony today as well as the witnesses, mr. and mrs. smith, and we have a lot moran he c more anecdotal information. i'm going to assume that toyota is going to take this seriously, that they're not going to deny that these acceleration issues could be happening because of the etcs and that they're going to expeditiously investigate this and going to provide the results of this committee. >> yes. >> is that a fair statement of your intention? >> yes. >> i look forward to hearing from you. thank you. >> thank you. >> thank you. mr. doyle for questions. >> thank you, mr. chairman. welcome. thank you for all the questions you've answered. so you heard the testimony of the first panel and dr. gilbert sounds like a pretty reasonable guy. and you just found out that your testing company was able to