>> -- and es 300 and is, those are already included in it as an additional measure when we do the recalls. and we have recently announced a tacoma, which has a very high complaint . . the secora. this is probably 72% of the recall population, and the rest of them, technically little not possible. we do not stop it there. we carefully monitor the situation. by the next year, with this new model, with bls coming in, with these retroactive measures, we're quite sure we can lower the industry average. >> i yield to the gentleman from

california. >> thank you, mr. chairman, and the chairman has proven that he can ask a question so complex as to even be difficult for people of your great knowledge, and it doesn't surprise me. let me ask in a different way the same question so that we all have clart. mr. anaba, i will put this to you. isn't it true in order to use an advance brake override system like this, your cars depend on electronic systems, they depend on microprocessors and they depend on independent control the data bus that brake has been pushed. isn't that correct? >> you are much better than i am. i believe so. >> so for all of us here who are concerned, of course, about

fail-safe and acceleration caused by electronics, i think -- i'm asking you, isn't think -- i'm asking you, isn't it fair to say that although uld at times be a problem, and your people have not eliminated that, the solution is, in fact, electronics in this case. and that's what's going to give the higher level of safety. >> well, i can only say that this is an added measure to a customer confidence. and, of course, i do not mean to say it solve all the problems. >> yes. i understand that in the earlier testimony there were some zrepszreps discrepancies how secretary lahood would describe occurrence ands how you would. is that correct that you would like to be able to correct the record on some areas of secretary lahood's testimony? >> i'm not quite understand what specific comments are you referring to? >> i would welcome that if you would like to, we would offer

you the opportunity to submit for the record any technical corrections in what secretary lahood's questions and answers were during the earlier testimony. >> well, we'll be glad to for the record. >> thank you. and then ski that we put up the unintended acceleration exhibit that i showed earlier. and i put this up for both of you because in your current advertisement on tv you said something which i thought was extremely profound and a high goal. you said that good companies fix their mistakes and great companies learn from them. in the case of the unintended acceleration, in 2007, there was a problem in the united states for which the floor mats were changed. there was a problem in japan with a different model but similar in floor pedal in which the toyota pedal itself was

shortened. and now in the case of all these models, there is an electronic upgrade additionally to prevent an accident like we had in 2009. would that be the outcome today, the outcome of the recall including the electronics upgrade to advanced brake override, is that the type of learn from your mistake that we can expect in the future on any problem that develops? [ speaking japanese ]

>> translator: i do not know the situation you referred to about 2007. but generally speaking, whenever a problem occurs, toyota addresses those problems in the most sincere manner and attitude. >> may i make a comment? >> yes, please. >> i came to know japan's problem, to be shameful, only in the previous year you mentioned. and that was the very first time that i ever heard. and, therefore, let me look into that if it is correct or not. but at the same time, i think we're a company that we learn great lessons for me from this instance and we try to do more. so i think this -- you know, we are committed that we try to remain as great company, not at just good company. so i think we have a full compliment of our president. and then he has just said and we have many, many measures already

taking place. i don't want to go -- >> i appreciate that. and i have a copy of documents that you have provided to us concerning the toyota blade which is the japanese only vehicle. and we'll deliver that to you for your further update. my second and only other question, secretary lahood talked about wanting to but not necessarily having the transparency of worldwide sales and problems. will you agree, mr. toy identifia, to identify -- mr. toyoda to be the company that provides the u.s. nhtsa with full transparency of your worldwide observations and help set a mad will fodel for all th companies here in the u.s.?

[ speaking japanese ] >> translator: to that question,

i clearly say, yes. in the past cases of recall or problem has solution in making decisions we based our decision on two issues. the technical consideration and also whether or not the regulations and statutes in different parts of the world are complied with. and in that sense, going forward we intend to exchange and share information more timely throughout the world and we are now setting up the system for that purpose. and for that specific purpose, we're going to establish this special committee on global quality which i personally will be heading. and that very first meeting of that will be held on march 30th. and for that purpose, we are now setting up the structure where the united states and other parts of the world will be represented in the meeting of

that special committee for global quality. and we are now introducing this system so that we really face up to this problem openly and transpare transparently. >> thank you. thank you, mr. chairman, for your indulgence. >> thank you. >> thank you very much, mr. chairman. gentlemen, welcome to the united states. i have to compliment you mr. toyoda for deciding to come here and testify. actually, it's quite a unique experience in terms you'll be able to brog about the fact that you with stood the interrogation of a congressional committee. that's a badge of courage in the united states. but if you heard any of the examiner's questions of the secretary, and i think now yourselves, we're a little disturbed about some things and

i am, too. although i'm very sympathetic to the fact that we want to encourage international business. we want to certainly open our markets to your manufacturing from japan or your ownership of manufacturing facilities in the united states. but i thought i heard this morning the secretary say that you had a problem in japan that was detected in '07 and then subsequently the same problem was detected in europe but there was no communication of that problem or the prospect of that problem being contained in american manufactured automobiles or your products being sold in the american market. if that impression that i have is true, that's very troubling to me. i would like you as best you can, and i understand the difference in language, to

explain whether or not you're giving the american automobile purchaser, your customer, and the american market the same level of attention that you give to the japanese market or the european market. and if you didn't in the past, what are you going do to make sure that difference doesn't occur in the future? we can't afford to have a lag of a year or two years of finding out something that is defective in an automobile. i suspect the stock price is reflecting that to you. that it can be very costly. i hope it doesn't destroy a great deal of the equity of your company. i hope you can move on and move beyond this question. but i want to hear in my own mind that there hasn't been this difference between the whole

market and the american market or the home market and the european market or your experiences in the home market and european market and ignoring of the american market and the american customer if i may. [ speaking japanese ]

>> translator: we provide the same services with the same degree of care to the customers not oem nly in the united state but customers world over. however, as the congressman has just pointed out, our expansion outpaced our development and training of people working for us. and right now i'm fully aware of that. in july last year, i became

president. and since then, i appointed executive vice presidents responsible for each regions of the world. and by doing so, we established a system where information of different regions can come into the head office, can be captured in a more timely manner. and on top of that, specifically about this quality issue that we're faced with at the moment, with respect to concerns of the customers voices before they're expressed in the terms of -- in terms of complaints, we're going to capture those so that information be conveyed to the head office in a timely manner. and we are putting in place a system to enable us to do that. >> let me address, if i may, specific issues of defect information sharing which was also a ranking member issa's question. i think we should have done a

better job we should've done better sharing that cross regions information. >> is it a culture a psychology? something like that technology breakdown? >> when you going to the data base, you can find it but going forward, one of the things i lis that we are making nowñi a prodt safety executive. it's part of the global committee headed by one american, anyuiñiñr look to othr regions like europe and china. and in that, all the information is shared their said that we can

evaluate and no one is going on in a more transparent way. these to the changes that we're making now. >> just a side question from me. does japan have a system similar to the united states where you can sue for damages? >> i believe that we do. >> we have a contest going on sometimes in the united states that we called tort reform. it's an argument that my friends on the other side very often use in the medical field.

if you had tort reform, if you'll allow some people to die without recovery, and i think you are making the best argument for why we have the present tort system, and i hope you recognize what kind of payment for the injuries and damages suffered by innocent american citizens who live grown up in an atmosphere where we had a great deal of faith in something stamp, made in japan. that would be of the highest reliability. reliability. and you injured that thought process in the american public. and you will be called upon under our system to pay compensation for that. i yield back. >> yild i yield to the gentlemam indiana.

>> let me say we really need tort reform. we should just forgive these companies and let them kill our people. >> never mind. we just have a difference of opinion. first of all, let me thank you both for being here. i think it's very, very good that you came. it shows real concern on the part of toyota. i also want to compliment toyota dealers around the country. i went to a couple toyota dealers this last week to take a look at what's going on. they're working day and night to correct these mistakes. and so to your toyota dealers, i want to say thank you for working so hard to correct the problems. now after having said that, first of all, i have a case that took place in 1997. i don't want to go into all the details. a woman was injured in an automobile accident involving a toyota. she lost both legs. and i would like for you to review that. and if you wouldn't mind, give me a response. would you do that for me? >> yes, sir. >> i'll have my staff give this

to you so we can talk about that. the second thing i want to do is, i don't understand this, i went to the toyota dealer and this is the floor pedal mechanism that's used in japan and in some cars here in america. this is one that's manufactured by cts here in the united states. and they have done a good job on this. this pedal here has been involved in the accidents, i believe that it caused fatalities. this one here, there's been sticking and they've been putting a shim in there, a little metal piece in to correct that. and my question is why the difference? these are going in the same model car and why do they have different specifications? because this one here has caused the problems and created some deaths and this one here had sticking problems which have been created -- or corrected. but it's different. and so when you're manufacturing

the same car, why is it that they don't meet the same exact specifications? it seems to me that would be easier to correct than having one that's made one way and one made another way. [ speaking japanese ] >> translator: as congressman already knows, a car consists of some 20,000 to 30,000 parts. and i would like you to understand -- 20,000 to 30,000 parts. and i would like you to first of all to know that we work together with the suppliers in designing those parts. >> if i might interrupt. i understand that you work with the suppliers.

but the designs are different. this one here has a different neck nix in the bottom than this one. i'm wondering if it's the same model car there's a difference. [ speaking japanese ] >> translator: some parts are designed by our suppliers with

toyota approving that. and in other cases, toyota's own engineers design the parts. there are two approaches. in the case of this specific pedal, the suppliers design the pedal and toyota approve that. and in both cases, we are able to identify two excellent suppliers whose parts were worthy of us to use in the united states and japan. and, therefore, those two parts designed by our suppliers were used in this pedal. [ speaking japanese ]

>> translator: and on top of that, there's a philosophy to grow together with our suppliers. and in that sense, rather than placing order with one single supplier, we source the same parts from multiple suppliers. that is to say when there are suppliers that can supply parts that perform the same function, we do that. and this is another point i would appreciate your understanding. >> if i may real quickly say i understand. but when there's a problem of this magnitude where people have been killed because of the part and there's another part that doesn't result in fatalities but there was a sticking, it seems to me it would be easier to correct the problem if there was more consistency in the two parts. >> okay, thank you very much. the gentleman's time has expired. i now recognize the gentleman

from maryland. >> thank you very much, mr. chairman. i want to thank both of you for being with us this afternoon. and to mr. toyoda, i have read your testimony. i have listened to it. and i can appreciate you saying and meaning that you're sorry. the problem is that it's one thing to say you're sorry. it's another thing when it seems as if time after time there are pronouncements that problems are being addressed and over and over again they seem like they're not being addressed.

2007, fatal crash involving a camry because allegedly a floor mat, a person was killed. and we can't get away from these facts. september 2007, you then, 55,000 cars are recalled. i know this is before your presidency. august 2009, california fatal crash, four people were killed. sailor family. september 2009, 4.2 million cars recalled. we can go on and on. and then just yesterday, mr. james lentz iii said something that was very interesting. basically what he said was that even with the sticky pedal and floor mat problem, that this may not account for all of the

problems. so -- and he implied that there were maybe some electronic problems taking place. the question becomes at what point do -- and i know also you want to regain the trust of your customer base. but that trust is hard to establish or re-estabilsh when they see over and over again these kinds of situations and they say, well, why should we believe that things are going to get better? and i know that there have been members that have had good things that toyota has done. people in my district are saying they call and they have to wait to get their cars repaired. but at the same time, they got to take -- they have to take the children to the babysitter.

they've got to go and do their marketing. i mean this is just practical things that are happening. so i'm just asking you how do you say to your customers, to people who take their hard earned dollars in a tough economic time and spend them on toyota vehicle, how do you say to them that we can trust you now when -- and i say this most respectfully. when it seems as if there is no end to this series of promises and then promised that seem to come short of reaching the goal of safety. [ speaking japanese ]

>> translator: i sincerely regret that some people actually encountered accidents in toyota vehicles. [ speaking japanese ] >> translator: as i mentioned earlier, with respect to the electronic throttle control system, the system itself has been designed based upon the philosophy of safety first and, therefore, whenever any abnormality or anomaly is detected, fuel supply is instantly cut off. [ speaking japanese ]

>> translator: that notwithstanding accidents actually happened. and, therefore, i instructed that every effort be made thoroughly to reproduce and d duplicate the accidents. up until yesterday, those tests have been repeated and conducted. however, no malfunction or problems were identified based upon the tests conducted internally within toyota. and, therefore, based upon such

thorough examination and testing conducted within toyota, i have been saying that i have no question with respect to the integrity of our system. [ speaking japanese ] >> translator: and, therefore, in cooperation with the authorities concerned, we already announced that we're going to thoroughly examine and investigate the outcome and data recorded in event data recorder. and the findings will be made public and disclosed in a prompt

and timely manner. and changes will be made in the very transparent manner so that that be assured going forward. >> thank you, mr. chairman. >> thank you very much. and i yield five minutes to the gentleman from florida. >> first of all, mr. chairman, i'd like to request unanimous consent to include in the record the specific information on the administration's proposed 2011 budget request which cut national highway transportation safety administration's vehicle research problem and also further reduce the amount for vehicle safety research in the bunt. i didn't have this further. if that could be inserted also in the budget -- i mean in the budget information in the record appropriate to my previous questioning of the secretary.

without objection. >> i'll review it and then we will -- iry serve the right to reject. >> again -- okay. then i'll proceed. this is indeed a very embarrassing day for the united states national highway safety transportation administration. it's equally a very embarrassing day for toyota to have the son of the founder of toyota here as the chief officer to come before the united states congress. i'm embarrassed for you, sir. i'm embarrassed for my dealers that i've talked to. i'm embarrassed for thousands of people, hard-working americans who work in, i guess over ten plants across the united states.

i thought actually i thought we were doing pretty good. toyota was taking quite a hit and i'll put in the record later on your safety record and some of the things you've done positively, information that i got until i was shaving the other day and heard the news of the memo that was prepared by a gentleman who i didn't even know his name, bring over a copy of the july 6 inaba memo. i hadn't read this actually, the details of it today. mr. inaba, this is one of the most embarrassing documents i've ever seen. in your preparation of this, you embarrassed all the people i represent, those hard-working people across this country. this is absolutely appalling, sir, that you would identify --

i know you were on the job only a few days. but key safety issues and identify is one of them on page 14 of the document you prepared. you identified the problem of the safety issue with regard to this -- these pedals. then on page 16, wins for toyota safety group. how could you possibly put in writing this and list as wins for toyota, particularly under the defects entry and negotiated equipment recall on camera es, sa saved $100 million with no defect found. i think you've done a great

injustice, sir, in this. i don't know if it was -- it's not a rookie mistake. obviously you've been with the company. but to prepare this document, to undermine the good working people and the reputation. toyota has an outstanding reputation and actually has had a great safety record. but this discredits everyone. how would you respond, sir? >> yes, sir. first of all, let me get the facts straight. this is the -- only a few days after my arrival to the company. and then -- >> had you been with toyota before? >> yes, i have. >> how long? >> 40 years in total, sir. but this is after two years of absence away from toyota. i also first became the president of toyota motor north america and then i visited one of the few days to washington office. i had no idea what the company

was. and that's why our staff wanted to give me an orientation material. >> i'm stunned to find your name on the front page. >> addressed to me. >> i did not know that until today. >> okay. the point is that, you know, i was in the middle of orientation tour. i didn't make it very clear. my name is on it. it is presented to me not me made it. that's all i want -- >> but you were aware of this. again, this is information you had and your company prepared. if in the future any company prepared a document like this and presented it to anyone in the company, to me, it would be -- to me, it would be one of the moest interesting thing you can do to anybody' reputation. i know it says on the side confidential and all of that.

but do you realize the people that have been let down? me? the people in my district who go to work every day in those toyota operations? the sales? and already the reputation has been severely damaged by what's been done here. >> i, honestly, with my honesty, i do not recall the meeting in any depth. but at the same time, now i see that. i think i must say to you that it is so inconsistent with the guiding of toyota. >> to me, it's unbelievable. >> i feel the same. >> you're in charge of the company. you have that responsibility. can awe sure the committee that this is not the approach? this will not be the approach of toyota now or in the future?

>> because now i'm getting more familiar, i'm president of that company. i am going to rectify that if there's any tone of it. >> the gentleman's time -- the gentleman's time has expired. let me make an announcement before we move any further. there's a vote on the floor. and it's actually three votes. and we plan to continue. and, of course, the agenda will woman from washington, d.c., will assume the chair. but i also want to let the gentleman from florida know that his time has long expired. >> yes, sir. and if mr. toyoda can just answer. [ speaking japanese ]

>> translator: i do not know about that specific document you referred to. and i do not know the comment. however, generally speaking, when a new person takes office as president, it is custom airily in any division to make presentations on various contents or substances going on in the company. however, generally speaking, the substance and contents of such documents does not affect the entire company in the way to cause drifting of the company itself.

>> the gentleman from ohio has five minutes. [ inaudible ] you only have a few minutes left. i'm calling on people who are left. i'm going to go to mr. connolly then since it goes on this side. we are. mr. connolly, you have five minutes. >> thank you, madam chairman. mr. toyoda, welcome to the committee. when did it first come to your attention that there was a problem with acceleration of your vehicles? [ speaking japanese ]

>> translator: i was appointed president in july. and there is a major difference between the sort of information i had received prior to assuming the position of president and the information i get to receive after becoming president. and, therefore, there may somebody difference between the information that company may have had as a company and the information i personally had as

president. however, i will clearly state whatever i know and even in those cases where i do not know or do not have any knowledge of, i will look into the matter and supply the report to you. [ speaking japanese ] >> translator: so responding specifically to your question of when, i would say some time toward the end of last year. >> toward the end of 2009? >> translator: that is correct. >> okay. were you aware of the fact that there had been complaints by consumers long prior to that time?

[ speaking japanese ] >> translator: right now i'm aware of that. however, did i have that sort of information before i became president? i didn't have that sort of information with the same degree of accuracy that i do now. >> but you had some awareness. we just heard from secretary lahood prior to your testimony. and he talked about the fact that nhtsa sent a team to tokyo to meet with the top leadership of toyota to bring to their attention as forcefully as they could the fact that there was a problem and that it needed to be attended to. that meeting was prior to your

testimony just now that you only learned about this problem in december of last year. were you not aware of the fact that nhtsa had sent a team to tokyo headquarters? [ speaking japanese ] >> translator: on that specific point, that was a matter handled by the division in charge of quality assurance.

and certain person in that division, i understand, received the visit from nhtsa representatives and had discussion with them. i know that. however, i do not know the specific content of the discussion nor the timing of that meeting. >> well, there seems to beod@@s) we know that the company was made aware by officials of nhtsa, who flew to tokyo for this express purpose. us in your testimony you didn't know about it. you were aware of that trip and that meeting but you weren't aware of the fact that there was a serious acceleration problem

with your vehicles until just a few months ago, december of 2009. is that correct? [ speaking japanese ] >> because if it is correct, given your position in the company and your family's association with the company, that would constitute extraordinary compartmentalization. [ speaking japanese ] >> translator: i personally know that there was a meeting with nhtsa representatives. but i do not know the content of that meeting. >> okay. i'm just going to ask one more question and that's of mr. inaba.

i'm looking at this confidential document made available to the committee. >> yes. >> my colleague was just referring to. and on one of the pages it has a, you know, just a series of ticks like this. and the bottom tick in your briefing, i understand what you said, it says secured safety rulemaking favorable to toyota. what -- and i'm going to run out of time. could you at least answer what was your understanding of what that meant? >> as i said, i don't recall the meeting in any depth. and i had no idea about this recall process back then. therefore, i have very little knowledge about it. and funny enough that i only recall quiet cars in that whole list of that. of course, now i am made aware of this. you know, that was a revision of

that. but i don't recall it. >> madam chairman, i know my time is up. this documented is dated july 6 of 2009. >> the gentleman's time has expired, mr. davis. >> thank you, madam chair. i would like to thank you and also ranking member issa and members of the committee for allowing me to join from my position on the ways and means committee on this oversight hearing on toyota's recalls. i had the honor of representing toyota's north american headquarters in kentucky. and one of the voices of perspective from our region. toyota directly employs 172,000 in plants and dealerships in the united states. and it's toyota has an integral part in our economy in kentucky and investment in the united states of america. they maintained operations in a world class level of quality in the commonwealth for nearly 25 years. the georgetown facility now manufactures engines and automobiles, all part of the

$5.4 billion investment in our state. toyota has been an exceptional corporate citizen in kentucky. they've given more than $37 million to local charitable groups from education to social services. not only have they supported local charitable needs, but they've been one of the commonwealth's longest job creators. toyota north american headquarters in kentucky supplies distributors across the continent from my hometown. in all, more than 8,000 kentuckians work directly for toyota and almost 1500 are in congress's fourth congressional district. 90 toyota suppliers are located in kentucky creating more than 10,000 additional jobs. toyota's decades long reputation for quality, safety, and service is based on high standards of quality and innovation and based on their corporate ethic of discipline, honor, humility. they have had a positive transformational effect on every aspect of american manufacturing. i can speak to this as one of

the few manufacturing professionals who serves in the congress. toyota is -- as congress conducts these hearings related to toy oat wra ses recall, we need to keep in mind toyota's willingness to do something unusual in american business politics in the congress. and that's to actually take responsibility and ownership for the problem and continue their commitment to quality. and more importantly, for the well-being of their customers. careless words and unfounded allegations by those who may have other agendas can do irrepairable harm to job creation in kentucky and in the united states. at a time when quality jobs are in short supply and unemployment in kentucky and the ohio valley remains above 10%, the jobs created by toyota are more important than ever. echoing the concerns voiced by kentucky governor and other governors across its united states in a recent letter to congress, i urge the members of this committee and my other colleagues to be thorough in their investigations of these issues and to arrive at conclusions based on evidence that is uncovered rather than

circumstantial speculation or sensationalism. let's focus on the facts rather than giving way to the temptation to engage in political theater. congress must exercise appropriate oversight in determining if national highway transportation security administration or safety administration is able to effectively identify and comprehensively investigate automobile safety facing americans. more over, americans need clear and consistent automotive standards applied to all manufacturers in this country, not simply one, to insure the safety of the entire american public. i appreciate your willingness to come and participate in this today and the contribution of your business to our country's economic strength and wealth. and with that, madam chair, i thank you and yield back. >> thank you for your comment. >> the gentleman's time has expired. miss maloney of new york. >> thank you. thank you for coming to testify today.

earlier you said the dealers in america are responding to any of the problems and making the customer whole assuming all costs for repair and to try and subsidize for time and so forth. my question is what about the american families or individuals who died or were injured since the company knew about the problem? will you assume their medical costs, funeral costs? [ speaking japanese ]

>> translator: truly speaking, truly, i feel very sorry for the members of the sailor family who ended their life with toyota vehicle. and i extend the condolences from the deepest part of my heart. working closely together with engineers, toyota team members and suppliers in making maximum efforts so that such a tragedy be never, ever be repeated. >> but you did not answer the question of whether or not you would assume the cost of the hospital repair of the body, the expenses of the individuals.

>> well, many of those cases pending legal issues. and so we will leave it to our legal counsel for its information. >> earlier when this came forward you had this report examination done. and i'd like to know if you think this is -- this report on the problems and solutions was sufficient earlier commissioner lahood testified he was depending on the research of toyota. so i'm asking whether you feel that this is sufficient. and secondly, i'd like to go back to a field technical report that came in from europe. and in it, the mechanics are really very clearly stating that there is a problem. and i want to know why this

information was not gotten out to people, to america, to the dealers, to everyone immediately and specifically how many complaints triggered an investigation? is there a standard? when someone complains and says there's a problem, what happens? how many complaints have to come in before you start reaching out? >> first of all, as i stated before, we could have done a much better job and we're now taking steps to improve it, as i said before. and to the specific question of how many number of reports do you need to initiate that investigation, i think for the

ua issue, unintended acceleration issues that we're committed to take actions in investigating those issues one by one. in other words, once we get the complaints of reports of that ua issue going forward, we will -- the goal is to start the investigation within 24 hours of the information that we receive. and we are creating many, many s.w.a.t. teams to really go into that area. >> okay. i've been called for a vote. but i'd like to get on the record, if i could, your response, mr. toyoda. what have you learned from this personally? and what lessons has the company taken from the events leading to today's hearings? and how will you change toyota in the future to protect people

and to provide an excellent product? and i'm running to vote. if he could answer. >> you want him to answer? >> i want him to answer. >> you may answer, mr. toyoda. what you learned. [ speaking japanese ]

>> translator: with respect to the recall, thus far, we have been too much focused on two perspectives. one is technical perspective and the other is compliance with laws and regulations. the most important lesson that i learned from this experience relation to the following -- with respect to customer first philosophy, we have been placing the highest priority on the safety thus far and we will continue doing so. but on top of that, from the perspective of customer first, we'll place greater emphasis

upon customers view point and perspectives. so that's the first lesson that i would like to mention here. and in addition to that, we'll make sure that we get information from various regions of the world in a more timely manner so that the time line be minimized between different parts of the world and the global head office in japan. we'll make efforts in that direction. >> thank you. if i may say so, the reason that you have seen such emphasis of what you call the technical matters and the law is precisely that customers did, in fact, apparently over and over again complain about these issues but had no way to know the cause and expected toyota to, in fact, look at the technical details. the technical details are beyond a family that reports unintended

acceleration. and the family expects that having reported that there will be an immediate remedy. the matter of law goes to transparency itself. the law requires automobile operators in this country to -- manufacturers in this@@@@@@@@@ -- to operate in a certain way, and law. i don't know if you want to respond, but i want to make it clear, and i would be pleased to hear that apparently the route from customer complaint to those that can do something about that is one of the points that you have shown in your testimony already. .

didn't get quite straight up to the fix it person. and as i understand it, one of the most important reforms is not through the customer complaints you listen to. i suppose you heard them, but the right people in the structure did not hear these complaints. is that so? at the right level, the level to bring an immediate remedy. those people didn't hear it soon enough. and so the customers weren't heard soon enough. is that correct? [ speaking japanese ] [ speaking japanese ] [ speaking japanese ]

[speaking japanese] [ speaking japanese ]

>> translator: it's not that customers were not heard, in my view. whenever complaints were reported, we tried very hard to reproduce and duplicate those complaints to identify what it was that was actually taking place which led to the complaints coming from the customers. we investigated them very hard and at the same time whether the similar phenomenon is likely to continue into the future, how much possibility there is for the same phenomenon to spread through other areas or other cars is another aspect that is investigated. so i will say that i will accelerate that process of following these three steps farther into the future. but with respect to the

reproducing -- re prduplicationf the phenomenon we have been working hard in toyota to do that. but even with the best efforts made, there are cases that cannot be or that have not been reproduced. so going forward, we will enhance the transparency of the process of us working very hard to reproduce and trying to identify those causes, sometimes seeking cooperation from the authorities concerned and we intend to lead our efforts in this area in the manner that our efforts itself will lead to the improvement of the vehicles of the entire industry. >> i'm going to go on with my question. i want to make sure you're not blaming the victims. the customers reported. let's not say, you know, we want to hear our customers. the fault does not lie with the

customers. you can bet your bottom dollar that the first time there was unintended acceleration, that's about everybody's horror. you can bet your bottom dollar that that customer reported that. your answer, which goes to "we'll see if this is duplicated" is, in some ways, very troublesome. that is such a serious problem that once it is reported one time it seems to me you have got a huge problem on your hands and you seem to be saying, well, if we hear it enough then we'll know we ought to do something about it. that's very troublesome. >> well, what we said in our testimony many other times, customer first, is the thing that we have been doing but we would have to make more focus on the customer concerns and complaints. and for that matter, i think we

also work closer with nhtsa so when we receive the customer complaints we'd like to know more about it and then also some of the information will be open to us including vin number so we can trace back each one of the customers. as i said, this the team could do that. so we are trying very hard to really put the words "customer first." >> first, let me say to you, i'm going to ask you a question that i think every american who has a toyota would want me to ask. and i can ask this because it's personal as well as congressional. i drive a camry hybrid. i switched to toyota very reluctantly because i wanted to buy an american car.

and the americans were not making hybrids almost at all or were so few that i went straight away to toyota. why? i didn't ask how much it cost. i was relying on this extraordinary reputation for quality and safety that had been built over generations. so i ask you, mr. toyoda, is there any chance that the camry hybrid will be recalled? for any reason. >> first of all, let me step in. first of all, chairwoman, you are driving american car. it is produced --

>> it's got mr. toyoda's name on it. you don't want to claim it anymore? you are disclaiming the car? >> no, no. it is an american -- >> it was the americans fault? >> no, no. please. first of all -- and also, now camry hybrid is not on the recall list. >> no. i just want to find out if you expect it ever to be on the recall list for any reason. >> i think you will be very safe in driving the car. that's all i want to just step in. >> you stand behind the toyota camry, mr. toyoda?

[ speaking japanese ] >> translator: right now, it is completely safe. and every day, as customers continue to use those vehicles, they may come up with new findings. but, as i said, it's 100% safe at the moment. for the customers to be able to feel safe in the car and so that ourselves will be able to sincerely receive any voices of the customers anywhere in the world, we are now putting in

place the structure worldwide to capture customers' voices wherever in the world. and we will listen to those customers' voices very humbly and modestly so that they will continue to be safe in our vehicles. >> thank you. >> chairwoman, could i have one more sentence? >> yes. >> i'm afraid you misunderstood. the camry hybrid is produced here and the vast majority of the parts are coming from the united states. so that's what i meant as american car. >> i just don't know what difference that makes. you need to explain it to me. were the cars that have been recalled produced elsewhere and that's the problem? mine is safer because american workers did it? and produced it? i don't understand the distinction.

the cars that had the problem were shipped from japan or something? >> the reason what i said, you know, why camry hybrid is american car is because you did bought an american car. that's what i meant, which is produced here, supplied here and so that's all -- >> many toyotas are produced and supplied here, aren't they? we're pleased to have you produced and supplied here, but the worldwide reputation begins in japan and stands behind wherever they are produced. >> that's very true. mr. toyoda, i was impressed with your opening remarks. in fact, i'm impressed with your being here. i'm impressed with some of what you have said you intend to do because we are really going forward. i am trying in my own questions to get some sense of where we need to have confidence in toyota and where there is still some questions.

but in your testimony you say -- and i'm quoting -- i would like to point out here, this is page one of your testimony, that toyota's priority has traditionally been the following: first, safety, second, quality, and third, volume. i'm going to ask you a question about what seems to be a fourth priority. that is for me the most troubling aspect of this controversy. and that first fourth quality is secrecy. to get to the heart of my concern about secrecy and the culture of secrecy, i would go to the data recorder, otherwise

known as black box. people in the united states are very familiar with airline black boxes because they know that a in that black box is critical information. and if you get to it fast you can find the cause. you can put -- you cannot only respond to those who have been hurt, you can put to rest some of the concerns as people begin to speculate what, indeed, caused this. and they come up with sometimes wild conclusions. but that black box is critical. now, other manufacturers, understanding just how important it is to get to the cause of the accident for all concerned, make the black box data available to do download. i have had a hard time

understanding, therefore, given the fact that your competitors make this data downloadable easily, i have had difficulty understanding toyota invoking proprietary technology that allows only you, toyota, on the spot to download. why should we respect your proprietary technology any more than we with respect the proprietary technology of other automakers, particularly given the safety aspects of this matter and the fact that an accident has already occurred. why do you not want to clear the air as quickly as possible? on what basis do you invoke some

proprietary technology interest when your competitors do not in the downloading area? >> let me respond to that question first that yes, we know detroit's three manufacturers have this information and then the reader is commercially available. toyota is also -- >> wait a minute. what's commercially available and when? >> the detroit three -- general motors, ford, chrysler -- have this commercially available reader that this -- what you -- >> why don't you have such a reader? >> we are in the process of making it available commercially

by probably middle of next year which is ahead of the law requirement, a. b, that this year, by april, in less than two months' time, we are going to make a hundred units of readers available at any region, any area. the point is that, you know, also in the past with requests we made it always open. now, this is the information that is the owners' information. with their consent, we can make that information -- >> yeah, it was available if you were on the spot. >> no. we do not hide it at the request of authorities like police request or nhtsa request or some government authority's request. we made it open. >> once you came as if there was something so secret that you had to be there in order for law enforcement or regulators to

read it. i just don't understand the difference. indeed, let me make sure i understand what your testimony is. are you saying that the company is redesigning the black box so that it can be readable by law enforcement, by safety investigators and consumers? >> and owners. >> consumers, yes. >> it should not be made available to anybody else unless there is a consent, to my knowledge, of the owners of the vehicle. >> you would not have to be -- toyota would not have to be present in order for the black box to be read. is that true? just like other manufacturers, you don't have to come to unlock the black box personally? >> i don't know that technical detail to answer.

>> well, that's the whole point, sir. one second. the gentleman from utah has five minutes. >> mr. toyoda, thank you for being here. very much appreciated. mr. toyoda, do you believe you are being treated the same as other manufacturers in the united states of america? [ speaking japanese ] >> yes, i believe so. >> do you have any reason to believe that other automakers are treated any differently by

nhtsa? [ speaking japanese ] >> translator: no, i don't think so. >> if you could hand the document, please, to them. there is a document dated july 6 of 2009. if you could take a look at this, please. this is an internal toyota document dated july 6, 2009. it has your name on it, mr. inaba. my apologies if i pronounced it wrong. on page seven, the second page, it says under the first bullet point, changing political environment, massive government support for detroit automakers. is that concerning? why was that brought up? >> this is one of -- i explained already once part of it.

this is one of my orientation because i was a few days into this position. this is prepared by washington office to give me sort of a first look of it. i do not honestly recall all these notions. i recall there is a quiet car regulation which struck me with a very strange feeling, but that was the only thing. but looking at all these papers, this certainly does not represent the toyota's overall guiding principle or belief. >> on the second page, under key safety issues, on the first point it says us-dot nhtsa under obama administration not industry friendly. is that a compliment or a criticism? >> i can't comment on that. >> what does it mean to you?

let me go to the last point. perhaps both of you could take this. quote, the new team has less understanding of engineering issues and are primarily focused on legal issues. can you explain what toyota meant by that? >> i still don't understand what the big difference between the two. engineer, legal. both are involved anyhow. >> both what? >> both sides have been -- will be involved in a discussion anyhow.

>> this is an internal toyota document. mr. toyoda, how would you read this? [ speaking japanese ] >> translator: i can't understand it. >> my understanding is that both toyota and nhtsa knew about this problem back as early as 2007. yet it took so long to get it taken care of. is there a regulatory component here that was slowing us down? [ speaking japanese ]

>> translator: today i came to understand that this particular document was prepared as a part of the presentation material addressed to the new president. however, i do not know the background of this writing, nor do i know how this document was prepared. therefore, i apologize, but i simply do not know the answer to your question. >> do you believe it's true? do you stand by it or do you want to distance yourself from it? [ speaking japanese ] >> translator: well, i need to understand this further. that is to say, i cannot understand the english written here. >> now, eight months into this position, i'm beginning to learn

myself and form my own opinion. so that is not consistent -- or i'm learning this does not represent my feeling today. of course i will learn more. i would like to build a very good relationship with nhtsa so that we can work together very good. >> explain to me the negotiation that happens between an auto manufacturer and nhtsa. often the word "negotiation" is used. how does that work? what is negotiated in your -- >> i have met nhtsa officials twice. so i am not able to explain what the negotiation means. so it is still a little bit too premature for me to say anything. but i don't know. certainly negotiation doesn't

sound like a good word. there is a discussion, yes. but also exchange of information, yes. we oftentimes get the good guidance from nhtsa, from an official. we listen to it, respect them. they ask us information. we provide them. so this is sort of like the nature of the relationship, as i understand, whether it falls into negotiate or not, i can't -- i don't know. >> do you believe, mr. toyoda, that american unions have an undue influence in this process? [ speaking japanese ]

>> translator: since i haven't understood the content of this, i don't know how i should answer that question. i apologize for that. >> toyota hired some former nhtsa employees. why would it be appealing to hire former nhtsa employees? >> well, first of all, those two gentlemen who came from nhtsa i know personally. so, of course, having -- >> how did you know them? >> i just started meeting him more often because i am a president of that company and meet them. >> did you know them before they were hired? >> no, i did not. i'm beginning to know their personality, their professional standard. so i have a very high respect so i have a very high respect for gentlemen's professionalism and ethical

standards. so it doesn't matter whether they are coming from nhtsa or not, to me. it does not. >> do you believe that the relationship between nhtsa and toyota or other manufacturers is too close, too cozy? >> i don't believe so. >> the gentleman's time has expired. five minutes to the gentleman from ohio. >> i thank the gentlelady. we have heard mr. toyoda say that toyota grew too fast. it's interesting that it's being told us as we are investigating cars that are accelerating out of control. it's ironic. but i would submit perhaps a misleading parallel. the problem is not that you were moving too fast but that you were moving too slow. too slow to recognize the material defects that a put

people's lives at risk and too slow to have some internal questioning about the effectiveness of your own value innovation program which in the mid decade began slashing production costs so that you could reach a 10% operating profit and when china came into full competition and began dropping their price for parts, you began to cut your costs even more. this committee hasn't really looked at the economic backdrop of the change -- what appears to be a change in toyota's culture but which may be, in fact, a kind of a cutthroat corporate competitive environment which caused toyota to drive costs down and, as we know, safety is then put at risk. there are 180 different parts

you looked at where you cut the cost by at least 30% according to industry reports. now, mr. toyoda, to your knowledge were there ever any discussions at toyota that certain design or engineering flaws would create system failures that would result in unintended acceleration? [ speaking japanese ]

[ speaking japanese ] >> translator: you pointed out that before i became president the speed of growth may have been too fast. i was referring to the fact that the growth may have outpaced our ability to develop and train human resources. and you also pointed out that the company may have become a finance-driven manufacturing company. and --

>> i understand your answer. it's not responsive to the question i'm asking. i want to be polite, but i also hope that you will answer the question that i ask which is -- were there ever any discussions [speaking japanese] >> whenever those issues of recall came up, within toyota,

we had very serious discussion into which state so-called unintended acceleration takes place. >> have you ever been and biased by your attorneys or business associates not to discuss any defects in the electronic product control system because such an admission would create such liability, which would be financially devastating to toyota? be financially devastating to toyota? [ speaking japanese ] >> translator: that has never happened. >> mr. inaba? >> never happened. >> you have had no discussion with your attorneys about matters of material defects in your products? [ speaking japanese ] >> nothing cost toyota more than

the loss of a customer's trust in our vehicles. for that perspective, we are as eager as anybody else to know if there is any problem. >> thank you, mr. chairman. >> mr. sauter? >> thank you very much. first, i want to make a couple of comments at the very beginning. first, i want to thank mr. inaba for visiting warsaw, indiana to the new toyota dealership there. it was a big thing for the small town. dave illing is running that in my district. people were very excited to have you in. secondly, i have some concerns about the way the hearings have been conducted. to some degree it seems we are having a hanging before the trial. i'm not saying you're not guilty. it seems by hauling you in here and the way we have handled this

and by going through a lot of internal memos, there is a lot yet to be decided. and i'm trying to get to the truth. i represent an auto area. we make parts through my whole district. ft. wayne, indiana is the proud home of the silverado and sierra who is in competition with you every day. my goal is to sell ford, toyota and chrysler. also cts is right at the edge of my district. these two petadals have differe problems. the longer one was having a slightly slow release which means when you take your foot off, it comes up just a fraction of seconds too slow. it also was sticking in floor mats because it was longer, but nobody was killed from that. it was a standard recall problem where you say, okay, we're going to fix the part a. this one, however, whether it's electronic or whatever, the one

from -- is it denso? it had acceleration. in other words that when you let go it went up. it was causing the car to go faster and that's -- all the death cases came from the denzel model, not the cts. when you go through the models, and this is important for many things. one of our concerns as american congressmen is you treat america like the rest of the world. we are concerned about memos that suggest you were addressing the problems in europe and japan before the united states. the other thing is parts suppliers. what's amazing is that the american parts supplier was actually delivering the safer model and that your subsidiary -- and i don't know whether you're aware that a little after 3:00 the fbi raided three toyota suppliers. and one is this one that made the pedal that's causing it. there is clearly going to be an

investigation as to that. i also want to thank you if you are going to be an american company for working with our parts suppliers. i understand you need multiple suppliers, that having -- and it's good to have the competition. that's how we get better things. i understand why as a corporation you need legal protection. although you need to be honest about what's happening here. when you have hearings like this more people file lawsuits. you have to protect yourselves and stockholders. i understand that. but in looking for safety i urge you to look at the american suppliers. i don't know if it was whether you were trying to do cost controls internally on your historic system, but what i see happening -- and it's interesting when you match up these models, what happened is that it isn't true that the american company was supplying your american-made vehicles. that you have been transitioning over and where the problems were occurring were in the denzel model and you moved 50% to camry in 2007.

but you have been moving lexus over. i'm praising you, not criticizing you, for moving over, but it's an acknowledgment that when you had problems in this one, they weren't as great as this one. i would encourage you to look at whether there was interaction in the type of pedal, whether it was the cruise control or the electronic or whether there is something inside here. because you're addressing the snap-back. because that's just a fraction. we have people sticking carpet under. you can have any kind of pencil get under to affect that. but that's still different from the sudden acceleration. i encourage you to continue -- you have multiple manufacturing plants in the state of indiana not in my area. we are more the big three. i also want to encourage you in addition to not treating us differently compared to japan and europe and safety questions and continuing to use american suppliers and doing your

standards, the companies in my district are saying when you come in, you're aggressive making sure they have good standards, but to continue to do that and i also encourage you -- i'm discouraged that a number of years ago you said your goal was to be the number one auto supplier to iran. we have rules in the united states about supplying iran. i hope toyota also reverses that position because, as americans, we arer very concerned about that. i would welcome any comments. [ speaking japanese ] >> thank groyou for the suggestions. we do not treat american customers any differently from europe or japan. just a matter of timing that there may be a difference in reacting or resolving the problem, but there is no way we

can differentiate any american drivers from the rest. >> the gentleman's time has expired. the gentleman from illinois, congressman quigley. >> thank you very much. >> thank you. my colleague from ohio stressed that he raised a point to get a more specific answer. i will briefly try to do the same thing as it relates to black boxes. clearly, other manufacturers make this black box data available to download. at this point toyota has proprietary technology that allows only toyota to download this data. now, beyond adding more the specific question is -- will your company redesign the black box so they can be readable by law enforcement, safety investigators and consumers? [ speaking japanese ]

>> it is true that we have one reader in the united states which can read edr. and we have made a decision that we will have a hundred units of them made available by the end of april. >> how will they be made available? to whom? >> this is made by our supplier. so it's toyota's technology. let me carry on. by middle, i guess, of 2011, prior to the law requirement, we will make this reader commercially available in this market. so there are steps that we had to take maybe because of that reason, but also for us it is

very important to know the reasons of any accident and, you know, getting into more technical details of that. of course, we have been always opening our information to the authorities' requests. >> but the other manufacturers don't make these entities hurdle to get this. it's just -- it's not proprietary. you're still making it difficult, even if you add more readers. as you say, information is so important. as we talked about before, one of our big concerns here is we don't know exactly what's happening. yesterday it was said mr. lints isn't certain a recall would solve the safety problem. again, we are flying blind and with respect, i don't see that what you're talking about is a

dramatic leap forward to improve how much information we're getting with these incidents as they take place. >> and as other manufacturers you are referring to in my understanding, to the best of my knowledge it's only again motors, ford and chrysler. no other makes are not ready yet, i don't think. so i think we are still among the early wave of that information available. >> with respect, i think that it would behoove you and everyone who drives your vehicles, including my family, if you rethought that and advanced the efforts to make this information available far more quickly than it allows and even in the redress attempts you're talking about now. >> yes. we are trying to, sir. >> getting to the main point

made by mr. lints, he wasn't certain that a recall would solve these problems. it came down to the issue of electronics and still a question there. what is your level of certainty as to whether electronics is a main cause of this problem? >> well, let me try my way. >> okay. >> my level of confidence is 100%. i think i have full trust in toyota's engineers. over 50 years, i think they have done a great job to bring toyota's name up to here. and i have no doubt they are still doing it. so, of course, all the exhaustive testing done at toyota, it is exhaustive in their mind. that's why we went outside to exponent. if that is not enough, we are

willing to stand. we are just in the process -- just very close to announce what mr. toyoda referred to as outside advisory board. this is going to be two very prominent -- i can't name it now -- maybe in a couple of days -- two prominent safety experts leading the panel to investigate this etcs of toyota, whether it is any -- i mean, whether it is any problem or it is robust. and they can choose any outside laboratory to test it. so we are now hoping that we can announce it fully so you will understand, but we are willing to take that sort of test through this advisory and they can be also advisory board to our overall quality improvement. this is what i wanted to say. >> thank you.

>> thank you for coming today. frankly it is refreshing to see corporate executive show remorse in what is a very serious issue and to try to attack the way to move forward on concerns with your product. i would like to ask you one question, and then perhaps propose a creative opportunity for you to consider. is your corporate culture in america different than your corporate culture in japan, so that the corporate culture in america is impeded from responding more quickly to safety concerns? >> if i understand your question correctly, is corporate american culture is different from japan?

is that the question? >> it would be helpful to have an understanding if your corporate culture in america is fully free and independent to be able to respond quickly to the safety problems presented to them here. >> of course there is a difference because our corporate culture in america is very much composed of so many americans. the vast majority is americans, and therefore there might be difference. at the same time, it is amazing that i personally see a lot of camaraderie, because i have worked in this country nine years. this country nine years. so i have seen many of the toyota associates here, including our leaders and the corporate culture is very, very similar, to my surprise, to that of toyota value in japan. but there is also a difference,

you know, in communication, i have to admit. and there is sometimes, you know, a lack of communication because of the language differences, because of the cultural differences, too. so here i am being the head of this north american operation. i am called half american, half japanese. so i think i can bridge that gap very easily so that our corporate culture of customer first and then honest and transparency should be kept intact. >> so there is nothing in the american toyota corporate system that is not free or is impeded by the dominant corporate culture in japan to quickly address safety issues? >> it would be fair to say that there is none. but there is always a difference. >> i understand. >> i think my job is to sort of even it. >> one of the most significant issues here, of course, is the

unintended acceleration. the earlier comments were suggesting that -- and your executive yesterday suggested that what you are doing may not totally fix the problem. now in that regard, unintended acceleration has affected other car manufacturers. so i would suggest to you that you have a potential opportunity here, as the dominant player in worldwide automobile manufacturing, or certainly one of them, to perhaps lead on a new way of thinking about the safety problem, working perhaps in a consortium with other manufacturers, your competitors, working with the united states government. we had the secretary of transportation here to think more creatively and perhaps do the research and collaboration that shows it is this mechanical problem that we were demonstrating earlier or is there some electrical issue that has not been discovered yet that

more collective minds working together could actually discover, and broaden the impact of the safety changes for the entire car industry. [ speaking japanese ] >> translator: as the congressman pointed out, throughout the world toyota has been deploying and pursuing business in the world. i believe the corporate culture of things we treasure very much are commonly shared anywhere in the world. [ speaking japanese ]

>> translator: however, different regions do have its own cultures, its own customs and local people of a specific country work for a company and we deliver products to customers in the local markets. in that sense, i have been thinking since april that we will give greater initiative to different regions of the world. for example, by emphasizing more

of the culture of the united states or the customs here. >> the i now recognize the gentleman from illinois, congressman davis. >> thank you very much, mr. chairman. i thank you, gentlemen, for appearing before the committee. mr. toyoda, for years, there have been complaints pouring into your company about unintenduninten unintended acceleration problems in your vehicles. your own field technicians in europe were alerting you that something in the accelerator pedal was causing cars to speed up uncontrollably more than a year ago. when did toyota first learn it had a problem with sudden unintended acceleration. why did it take you almost a year to bring this to the attention of regulators and even more time to tell the public about the problem?

is there some policy in your company that prevents you from alerting regulators as quickly as possible about a problem or the public so that we all become aware? [ speaking japanese ]

>> translator: in the name of our company's tradition and pride, i can clearly say that whenever a problem arises, toyota pursues is facts thoroughly and rigorously and looks into those matters in great detail. and in doing so, our fundamental approach and stance is to give the highest priority to customers' safety and convenience. in addition to that, once that is accomplished, we provide and create products that also satisfies the mandate of the times. for example, in conserving environment or existing in harmony with nature.

now, with respect to your specific question of when we learned about this problem, i do not know when we learned about this problem. but i do hope that you would understand the basic sense and attitude of the company which i described. >> reports were actually surfacing seemingly several years ago and yet it appears that there was no significant effort to deal with it until the accident in california. do you feel that your company acted quickly enough to begin to address the issue in a way that regulators and the public would know that you were doing so? [ speaking japanese ]

>> translator: as it turned out, in this particular case, the response, according to your impression, was not quick enough. however, going forward we will establish the framework very firmly and diligently so that we will not betray your expectations in that regard. and i will personally take leadership in putting a place the structure that will enable us to capture information from the local areas concerned in a

more timely manner. >> media reports suggest that your company knew at least a year about the sticking pedals before you shared that information or communicated that information to the regulators. do you think that was perhaps a bit lengthy of time to tell regulators if the company knew? [ speaking japanese ] >> now i know the sticky pedal situation is in question. and, yes, we knew that probably a year ago in europe. as i have been saying that this had not been shared well enough on this side. so we did not hide it, but it was not properly shared. so we need to do a much better job in sharing whatever is happening in europe should be known in the united states so

that we are all alert to see if there is any danger to american consumers and drivers. the other issue is that the first information we get to know in europe was all right-hand drive cars, and also different models, much smallerer cars than those models sold here, that's why initial judgment -- which turned out to be wrong -- but it was limited to a right-hand drive and much smaller cars. so there is a lack of maybe -- you may call it sensitivity, but there is no deliberate sort of delay in the process. >> well, let me just say i appreciate your answers and i thank you for indicating that you expect to do a better job. i'm always reminded of my mother who told us when i was a kid growing up that what you do

speaks so loudly until it is hard for me to hear what you say. so i hope your actions will be certainly forthcoming. i thank you very much for your answers. >> thank you, gentleman from illinois. now i call on the gentleman from california. >> thank you. mr. iniba, you just made a comment that was startling for me. i apologize that you have to testify in a second language and in a setting that may not be as comfortable as you as you prefer. but you stated that you had 100% -- you were 100% sure that the difficulties with the pedals, with the acceleration was not electronic, that it was

not going to be involved with the data systems, that it was a physical problem. you stand by that statement? >> sir, may i clarify what i meant? because the question, i thought, was that i personally -- what is my confidence level about etcs, electronic throttle control system, so my feeling is that since i have a trust in our engineers, even though it has not been extensively tested by the outsiders which i added, but my confidence -- persol confidence level is 100%. but i am only referring to etcs system, sir. >> okay. because it does concern me when anyone can say anything to 100%. it's one thing to stand behind your vehicles. it's one thing to ask the american people to stand in front of them, especially with their children. and 100% is a very strong statement. it's fine to say it here in

these hearings, but out in the real world, we have had some terrible tragedies. i just want to make sure as being a representative in san diego where the tragedy that finally opened up this book caused your family has spent decades creating a reputation that is second to none, probably only compatible with the inventor of the automobile himself. the big question is, the think there is a possibility that that reputation being so good might have made those of us who were regulators not ask the tough questions we might have asked from general motors or some other auto maker, or that same reputation and feeling of success and confidence might have left toyota not to ask the tough questions of yourself?

in other words, your success created the problem or created the atmosphere and the environment that allowed this problem to go on from 2007 to just recently? . .

[ speaking japanese ] >> translator: i personally do not believe that we didn't ask that question because we had very high reputations. since i became president in july, i have been saying internally within the company that we need to heed customers, dealers, and we need to become a good listener. because of the inadequacy on my part, probably, that ability itself may not have spread widely within the company. but for the past 70 years we have been supported by customers and by our partners because

toyota has been a company and listened to opinions of outsiders very modestly and sincerely. and you have my commitment that we will continue doing so going forward. >> look, the damage done to the toyota name will do more -- will impact toyota more than anything this congress can do. the consumer and the market will wage a very -- demand a very high price from toyota for these mistakes. the question is, though, how do we prevent it in the future for toyota and everybody else. do you agree that the federal government of the united states should require all manufacturers, including toyota, to report all incidents of malfunctions no matter where in the world those occur? not just here in the united states.

[ speaking japanese ] [ speaking japanese ]

>> translator: i personally believe that realistically there are limitations to the current engineering capability. however, toyota has a challenging spirit to make things better or to correct inadequacies or troubles wherever that may happen. going forward, we'll continue to strive to minimize those troubles as close as possible to zero by examining each individual reported cases, putting them under scrutiny, and making public any findings in that process. and we would like to work together in this industry. >> in all fairness, i would just like a yes or no, should the federal government of the united states require toyota and every other manufacturer to report total malfunctions not just those within the jurisdiction of the united states. yes or no, should we require all

information or shouldn't we? what is the position of mr. toyoda? [ speaking japanese ] >> translator: we would like to extend full cooperation. >> so we'll take that as a yes? >> translator: yes. >> thank you. five minutes to the gentleman from texas. >> thank you, mr. chairman. i represent the san antonio area down through the valley where we have a toyota plant. currently right now there's 2,500 hardworking americans in the san antonio area plant where their jobs and family livelihood. i see jay here, which i visited, a couple of other folks here. so we're asking you to put

toyota back on track so americans jobs are not put in jeopardy and of course the american drivers that are at risk is what we have to address. it is my hope you move swiftly to fix the safety problems, rebuild the reputation talking about and restore the toyota legacy which employs americans here at home. american drivers and american workers are watching and waiting. toyota has a glowing legacy in this country for decades for the sake of safety and for the sake of jobs, we need to get that back. you all need to get that back. in this country we have american made toyotas made by american workers, american drivers behind the wheel. the responsibility toyota has to americans runs wide and runs deep. and this is about safety and this is about jobs. as i mentioned in my area, it

doesn't include suppliers, about 5500 when you include everyone, does not include toyota dealers. millions of americans also drive your vehicles. as i mentioned, i met with jay and a couple of other folks, a toyota forklift operator. she said even at this time of recession toyota has not let anybody off, has spared the employees and is still working. we appreciate that. without a doubt your ability to repair your reputation in this country will affect american workers an drivers who depend on toyota. one of the things i want to look at, in fairness, in fairness to all, when you look at the nhtsa numbers, you see -- i don't want to go, one company at 32%, i've handed this out, mr. chairman, one at 17%, another 15, and

another, combined ones, toyota was at 11%. so in the past you were doing well, very well. but again, we now have to look at what lessons have we learned. so my question, mr. toyoda, what lessons has your company learned as a result of these recalls? [ speaking japanese ]

[ speaking japanese ] >> translator: this past data clearly places high evaluation to our track record. however, currently we are having a series of recalls, brake system or accelerator pedals has caused concerns. but we are examining those matters, pursuing the true cause of those problems, identifying counter-measures. and going forward we'll make sure we get information more swiftly. and therefore, i will clearly say that going forward we will regain the good reputation as represented here in this track record. that's exactly what we are doing at the moment. >> mr. toyoda, in your major editorial that you wrote recently, you said that toyota,

and i believe paraphrasing your word, has not lived up to the high standards itself. how has your company not lived up to the high standards? [ speaking japanese ]

>> translator: first, above anything else, we will make double commitment with new vigor to have sacht and customer first permeate through every business and every process through toyota. that, i believe, would be the best way for us to win back the trust that we enjoyed in the past. on top of that as we deployed business globally, we will make every effort to enhance the transparency of our business in various parts of the world. >> time has expired. now call on the gentleman from tennessee, congressman duncan. >> thank you very much, mr. chairman. yesterday a woman named rhonda smith testified at the energy and commerce committee and she's from east tennessee, from just outside my district, which is based around knoxville. she was driving into knoxville

in her lexus automobile. on october 12th, 2006, three and a half years ago, and she experienced one of these sudden acceleration events and her automobile reached 100 miles an hour. she said she thought it was her time to die. she said she called her husband and tried to put the car in reverse but the computer apparently didn't recognize it. she feels that toyota's response to her complaints was a farce. toyota apparently told her there was nothing wrong with her car. our investigators for energy and commerce committee and this committee have found their complaints started coming in about these events in 2001 and nhtsa started an investigation apparently in 2004 aimed at

toyota. now, 2004, that's six years ago, if that investigation started early in the year. maybe five and a half years ago if it started late in the year. but mr. toyota has said several times today that he just became president last summer, as if this excuses him. mr. inaba, though, became head, as i understand it, nine years ago of the u.s. toyota operation. now, one of my sons had a toyota forerunner several years ago and my wife drove a small lexus until about two years ago. both of those are very good automobiles. i think you've got a very good company and put out almost entirely good automobiles. i have a good impression of your company. but having said that, i don't believe i've heard a good answer today -- and i've been in and out some -- i don't believe i've

heard a good answer or a complete answer as to why it took your company so long to respond to these complaints. because apparently there were many complaints. @ @ @ @ @ z@ @ @ @ @ @ @ z8@ @ v why was there not a response before now when you get all of these complaints? >> [speaking japanese]

>> translator: i listened to the testimony by miss smith yesterd yesterday, and i feel very sorry and regret for the fact that while she was driving a car,

such huge anxiety was caused to her. at the same time, i apologize for the response by the dealer, which is not really up to our standards. as to why it took us so long, in order to accelerate our response going forward, i have established the special committee for global quality, and we are now setting up the framework so that the first meeting can take place on march the 30th. we have deeply reflected on what has happened thus far. we learned a very important lesson from what has happened. to take actions for improvement as quickly as possible, i think, is the job that i really have to attend to at the moment. >> let me just say this. i understand there are no americans in the top leadership of toyota in japan. i think you can say there's many americans in the top leadership here. but it might be a good idea to

put a couple of americans in the top leadership in japan. thank you. >> gentlemen, time has expired. now the congresswoman from california. >> a question to both the president and the ceo here in the states. have you turned over every document to nhtsa that relates to the sticky pedal and the sudden unintended acceleration? >> i believe so. >> i believe so. >> there's not any suppressed document or secret document we're going to hear about a year from now?

>> translator: that won't happen. >> the people of japan are very hospitable. i know that for a fact. this is the number two most important market for toyota in the world. when a united states regulators flies to japan to meet with your leadership, i find it hard to believe that, one, you didn't know about the meeting. and two, you never had a report about the meeting. can you respond to that? [ speaking japanese ] >> translator: but that's a fact. and i regret that the response in that manner was not good.

[ speaking japanese ] >> translator: of course, there are things that we reflect upon. but i believe people in the quality division responded to that very adequately. that's my understanding and i hope you understand. >> i would like to ask you to turn over to the committee, any documentation, any memos that arose out of that meeting by the regulators in the united states coming to japan. >> translator: i will do that. >> i want to read to you a little bit of an e-mail i received from a constituent who owns a toyota tacoma truck they

purchased in 2008. soon after we bought the truck, we began to notice that the engine would surge when we were stopped and had our foot on the brake. we took the truck into the dealer as soon as we started to notice these problems. we were turned -- returned at l three more times with the problem. they had a service person test-drive it and told us they were up able to duplicate the problem. my wife asked to speak to the head of the department and he told her the truck needed to get used to her driving style and to give it a few months. in capaci in exasperation they went to the

internet and found others. we went back and they continued to blame it on my wife. i want you to revow this complaint and report back to me. more importantly, i hope moving forward you never again use the excuse it was driver error. [ speaking japanese ] >> translator: i didn't know about this case but we would like to give an explanation on that with documents and other means. all over the company, i will

make sure we never, ever blame the customers going forward. >> thank you. one last question. you said safety first, mr. toyoda. we know that the electronic throttle control may be problematic. you've already decided to put the override -- brake override chip into models moving forward. you are going to do it for some models retroactively. would you be willing for a customer who came into your dealership to offer that chip to anyone who had concerns about the safety of their vehicle? [ speaking japanese ]

>> translator: i do not know the technical details, but if it is technically and engineerly possible and if we can find a good method, we will do that. other than that, i do not know a good answer to that. >> all right. thank you. >> now call on the gentleman from ohio. >> i'm from california. >> california. >> thank you so much. may i say to you -- [ speaking japanese ] mine is more of a comment. mr. chairman, i'm going to concede my time. we do have another panel and

there's another committee waiting for this room. currently about 8 million toyota vehicles have been recalled in this country due to the sudden unintended acceleration events and braking concerns. and i hope that the interest shown here in america will be taken by so that you can fix whatever is causing this. and we hear it's computer driven, these causes. so i would hope -- and there's a saying that kaiser permanente uses, i hope we all thrive. i hope you thrive. we're concerned about the victims, they are going to be the next panel up. i was hoping we could get both panels together so they could explain what happened to them and you could comment. but a word to the wise, and that is listen closely, make a commitment to go back and make the decisions at the top so that

your particular product will be, again, number one. with that -- [ speaking japanese ] thank you and i yield back my time. >> thank you for yielding back your time. i recognize now the gentlewoman from ohio. >> i thank you mr. chairman, mr. toyoda, and your associates for coming today. mr. toyoda, i am not satisfied with your testimony. i'm being very forthcoming. i do not feel it reflects sufficient remorse for those who have died, and i do not think you have accurately reflected the large number of complaints that have been filed with toyota for a decade. i as one member am disappointed. i dedicate my testimony in memory of guadalupe alberto, age

76, who died when her 2005 toyota camry sped out of control and crashed into a tree. business week reports she blew past an intersection. witnesses saw her with both hands on the wheel. she appeared to be standing on the brake while steering. where is the remorse? as far back as 2002, nhtsa -- and our government is at fault, too, records two toyota executives, both of whom were former nhtsa employees hired by your company, worked with their former co-workers, scott, you and jeffrey at nhtsa when it decided it wouldn't investigate what they termed longer duration incidents involving uncontrollable acceleration. i call it sudden death

acceleration where brake pedal applications allegedly had no affect. nhtsa limited its investigation to those situations where it was a second or under a second. that was a major decision that affected lives all through this decade. so i am disappointed. this book, "the toyota way," is used in business schools across this country. the author talks about your company's principles. principle number five reads, build a culture of stopping to fix problems, to get quality right the first time. the first time. mr. toyoda, how did toyota lose its way? you say in your testimony your

company grew too fast. some smart lawyers gave you those words. i think what happened was your company went from emphasizing long-term quality values and corporate responsibilities to fighting against safety regulations, against insider influence inside this city and your own capital in japan, and environmental regulations. and, indeed, is it a total of -- the toyota way to change decisions that work against the interest of the people of our country and other countries? do you know how many people died because of what your company did?

>> [speaking japanese] >> not limiting to those individuals you specifically mentioned, i feel deep regret for those who lost their lives or who were injured by accidents, especially those in our cars. i send my sincerest condolences to them from the bottom of my heart. the [>> [speaking japanese]

>> translator: i came from japan to appear at this hearing. but at the same time i wanted -- i had been trying to convey my sincere feelings, my own beliefs to the people throughout the world. but the fact that was not something i will reflect upon. [ speaking japanese ]

>> translator: as you pointed out, the development of people, human resources at toyota may not have kept pace with the pace of expansion. i will observe that and look at that fact very sincerely. going forward to bring about and effect changes to become a better carmaker and to become a more transparent carmaker i think is the role and mission of myself as president. [ speaking japanese ]

[ speaking japanese ] >> translator: however, some customers of toyota, as a matter of fact many customers of toyota around me say they are willing to continue buying toyota vehicles going forward. as long as there is such customers feeling and accepting the gravity of those victims of traffic accidents, i think it is my responsibility to care for those customers and create cars for those customers. i believe that i am the only person who can display the leadership to transform a toyota in that direction. >> gentlewoman's time has

expired. five minutes to the gentleman from missouri, congressman. >> thank you and that the witnesses for being here. mr. toyoda, yesterday, david gilbert, associate professor of automotive technology at southern illinois university testified that toyota has an electronic problem. a conclusion he derived from testing that only took him three and a half hours. i note this his credentials are significant and he's very qualified to do this testing. toyota has announced that to help solve this problem, toyota will begin to install brake override systems on your cars. isn't it true that if what dr.

gilbert testified to, that toyota has an electronics problem, you cannot be certain that a brake override system would even kick in and work when your electronics malfunction? [ speaking japanese ]

[ speaking japanese ] with respect to the problem of electronic throttle control system, i gave the instruction to conduct thorough duplication and reproduction tests. we have conducted actually numerous reproduction, duplication tests on a 24-hour basis. thus far we have not identified any problem with our etc system.

i know this testimony given by professor kbil bert yesterday and personally do not know the details of what sort of testing he conducted. but just the confrontation between toyota and professor gilbert, we have not clarified which side is correct. this means there are problems that has not been resolved for the entire industry. and therefore, in the open forum, to validate the situation, we are willing to conduct testing together so our customers would be able to feel safe in the vehicles as quickly as possible. toyota is ready to extend cooperation in that regard. >> thank you for that. yes, sir? >> please allow me to give a little more -- i have a little more information about that. we'll be glad to meet with him or have him meet with our engineers and then explain his

test method. if there's any input he may have, we're willing to listen to anything he has for the issue. but we have some concerns, as far as we know, and our engineers gave us some concerns about it, because he cut into a circuitry and then manipulated the system in a way that is very unrealistic. also, in the meantime, with the very short time we have conducted if some other manufacturer's cars would rchl the same, we have done three cars already with a very low ua rates. in other words, they are considered to be a very safe car. and it replicated the same way. so in my very amateur term, it is not unintended acceleration.

it is an intended manipulation. >> so you have determined it's not electronic. but i would hope you would get with professor gilbert and compare your notes, compare your testing to make a determination on whether it is or isn't. >> yes, sir. >> thank you. the time has expired. now call on the gentleman from ohio. >> thank you, mr. chairman. i want to thank our witnesses for their time today and for coming in and testifying before the committee. mr. inaba, i'm concerned about some of what you say in your testimony relative to what we have learned about toyota employees and former nhtsa employees. as has been explored by multiple members here today, there seems to be a conflict or certainly

seems to be an effort on the part of former nhtsa employees employed by toyota or formerly employed by toyota to put a halt to investigations. i'll refer to the business week article on february 12th. it said one example, in a lawsuit, the company and nhtsa expressed limiting unintended acceleration complaints to incidents lasting less than a second. that's what representative was referring to. all four of the probes, toyota aides helped end were complaints unintended acceleration was caused by flaws in the vehicle's electronic throttle systems. do you believe that had these efforts not been made to limit these investigations, that toyota as a company would have reacted more quickly and nhtsa would have reacted earlier to some of the problems that we're now addressing today in terms of the number of accidents and the

severity of these accidents? >> well, i don't know any of the specific incidents or occurrence you can mentioned. as i said, i believe in their -- in two of our associates very high ethnic standard and also their integrity. so i have good reasons to believe in that, rather than just hinting this they may have some relationship in favor to us. also on the nhtsa part, they are a very, very professional team of people. >> just to follow up, you're suggesting they didn't engage in this behavior to try to limit the investigations and -- is that what you're saying? >> well, i don't know how to --

all i'm saying is that whatever they have done is within the very good ethical sort of code. >> my question, though, if the investigations had not been limited, if the investigations had not been limited, would we have addressed the situation earlier than we are today? >> i think it is a very issue that since i don't know the conversation or event, i would not make any more comment on that. >> also, mr. inaba, in your testimony earlier, you suggested that the information in europe with regard to some of these challenges wasn't shared with folks in thethe united states was unfamiliar with what was going on addressing sudden acceleration problems in europe. so i just want to make sure that i have this right. so you are saying that toyota of america was not aware of the efforts by toyota to address the

sudden acceleration issues in europe, when that was going on. >> well, i must say in our term, sticky pedal issues. i think in our term, toyota, american side, was not aware of that or was not informed of that. that is true. that's all i know. >> so when that was going on, when those complaints were being addressed, when solutions were being created and a recall taking place in europe, you were unaware of that here in the united states? >> i personally got to know that fact in january this year. >> i will just conclude with the case, i'm encouraged by the fact my folks in cincinnati when i went to the toyota dealership and went to the service department said they hadn't seen complaints. when i went back and looked at

nhtsa records, it was pretty clear there were multiple complaints about sudden acceleration. i will just reflect upon this one. that i saw and it's a complaint from 2009. the gentleman said i bought my tacoma three months ago i experienced the problem three times now, the last time after picking up my daughter from work. it was accelerating and i was literally standing on the brake. the engine was racing and it wouldn't stop. i threw it into neutral and it sounded like it would explode. i had no rugs, it did not come with any, i was going to get all i used to raise -- and it goes on. but clearly this is not a math problem or sticking paddle problem, but an experienced driver experiencing sudden acceleration in 2005.

we in the congress want to know and the american people want to know if their vehicles are safe and if you can stand here today and tell us that they do not risk, because of a computer issue or electronics, sudden acceleration in toyotas on the road today. >> [speaking japanese]

>> i don't know about the particular case in 2005, and without the wit -- without knowing the specifics, i cannot give any specific answers. might just refer to electronics control system, to the system we have conducted various tests thus far to date, we have not encountered the same phenomenon as a result of that test. therefore, i believe the vehicle is safe. however, going forward, we are willing to work together in an open forum with industry partners to validate the situation, introducing opinions

of other people, including professor gilbert for that matter. >> gentlemen, time has expired. >> thank you. >> let me say that, first of all, i really, really appreciate your coming to testify. we really appreciate that. we look forward to your follow-up on the safety issue. because as i indicated to you, this is what this is all about, about safety and making certain when people get into cars, they are safe. we hope that you continue to work on that. let me say to you, mr. toyoda, i want you to know that i'm impressed with the fact that you came voluntarily to come before the committee to testify. i want you to know that that to me indicates your commitment, indicates your dedication, and that you are serious about making certain that these autos are safe. i want to thank you for that.

i also want to thank you, mr. inaba, for your being in touch and understanding the fact that this is a serious issue that must be addressed. anything else you want to say? >> mr. chairman, if i could just echo your words and say a great many promises were made, commitments for change. we look forward to seeing that as somebody who has worked with the society of automotive engineers for many years, i look forward to that change being spread throughout the design industry in qs 9,000 and other standards. i believe what we have begun here today is going to be critical for all automobile manufacturers particularly as we put more electronic systems in the car. i, again, thank you for your great distance and your patience through this long day. mr. chairman, i would ask unanimous consent that

[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> coming up on c-span, federal reserve chairman ben bernanke testifies on capitol hill. president obama discusses his economic policies at a meeting with the u.s. business roundtable. and toyota executives testify at a hearing about their company's recalls. on tomorrow's "washington

journal," we will preview health care summit with members of congress, including michael burgess of texas, diana degette, james clyburn, and bill cassidy. james clyburn -- julie rovner as well. >> live on thursday, day-long coverage of the health care summit. live from blair house, it will also include your reactions on c-span radio and c-span.org. >> now, federal reserve chairman ben bernanke. he told congress that the federal reserve will maintain

low interest rates to help preserve the economy. this is about an hour. >> chairman frank, ranking member baucus, and other members of the committee, i am pleased to present the federal reserve's semiannual monetary policy report to the congress. i will begin with outlook -- comments on the outlook of the economy and for monetary policy. although the recession officially began more than two years ago, u.s. economic activity contracted particularly sharply following the intensification of the global financial crisis in the fall of 2008. concerted efforts by the federal was served, the treasury department, and other u.s. authorities to stabilize the financial system, together with highly stimulative monetary and fiscal policies, helped arrest the decline and are supporting a nascent economic recovery. indeed, the u.s. economy expanded at about 4% annual rate during the second half of last year. a significant portion of that

growth can be attributed to the progress firms made in working down unwanted inventories of unsold goods, which left them more willing to increase production. as the impetus provided by the inventory cycle is to prepare -- is temporary, and as the fiscal support for economic growth likely will diminish later this year, a sustained recovery will demand -- depend on the continued growth in private- sector final demand for goods and services. private final demand does seem to be growing at a moderate pace. in particular, consumer spending has recently picked up, reflecting gains in real disposable income and household wealth and tentative signs of stabilization in the labor market. business investment in equipment and software has risen significantly. an international trade, supported by a recovery in the economies of many of our trading partners, is rebounding from its deep contraction. however, starts of single-family homes, which rose noticeably

this past spring, have recently been roughly flat, and commercial construction is declining sharply. the job market has been hit especially hard by the recession, as employers reacted to sharp declines and concerns about credit availability by deeply cutting their workforces. some recent indicators suggest that the deterioration in the labor market is abating. job losses have slowed considerably in the number of full-time jobs in manufacturing rose modestly in january. initial claims for unemployment insurance have continued to trend lower, and the temporary services industry, often considered a bellwether for the employment outlook, have been expanding steadily since october. notwithstanding these positive signs, the job market remains quite weak, with the unemployment rate near 10% and job openings scarce. of particular concern because of its long-term implications for workers' skills and wages is the increasing incidence of long- term unemployment.

indeed, more than 40 percent of the unemployed have been out of work six months or more, nearly double the share of a year ago. increases in energy prices resulted in a pickup of consumer price inflation in the second half of last year, but oil prices have flattened out over recent months, and most indicators suggest that inflation likely will be subdued for some time. slack in labor and product markets have reduced wages and price pressures in most markets, and sharp increases in productivity have further reduced producers' unit labor costs. the cost of shelter, which receives a heavy weight in consumer price indexes, is rising very slowly, reflecting high vacancy rates. in addition, longer-term inflation expectations have remained relatively stable. the improvement in the financial markets that began last spring continues. conditions in short-term funding markets have returned to near pre-crisis levels. many, mostly larger, firms have been able to issue corporate

bonds or new equity and do not seem hampered by a lack of credit. in contrast, bank lending continues to contract, reflecting both tightened lending standards and weak demand for credit amid uncertain economic prospects. in conjunction with the january meeting of the federal open market committee, board members and reserve president -- reserve bank presidents prepared projections for economic growth, unemployment, and inflation for the years 2010-2012 and over the long run. the contours of these forecasts are broadly similar to those i reported to the congress last july. they continue to anticipate a moderate pace of economic recovery, with economic growth of roughly 3-3.5% in 2010 and 3.5-4.5% in 20113 consistent with moderate economic growth, participants expect that the unemployment rate will decline only slowly, to a range of

roughly 7.5% by the end of 2012, still well above their estimate of the long run sustainable who rate of about 5%. inflation is expected to remain subdued, with consumer prices rising at rates between 1% and 2% in 2010 through 2012. in the longer term, inflation is expected to be between 1.75% and 2%, the range that most fomc participants judge to be consistent with the federal reserve's dual mandate of price stability and maximum unemployment. over the past year, the federal reserve has employed a wide array of tools to promote economic recovery and preserve price stability. the target for the federal funds rate has been maintained at a historically low range of 0% to 0.25% since december 2008. the fomc continues to anticipate that economic

conditions are likely to warrant exceptionally low levels of the federal funds rate for extended period. to provide support to mortgage lending and halls and markets and to improve overall conditions in private credit markets, the federal reserve is in the process of purchasing $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt. we have been gradually slowing the pace of these purchases in order to promote a smooth transition in markets and anticipate that these transactions will be completed by the end of march. the fomc will continue to evaluate its purchases of securities in the light of the evolving economic outlook and the conditions in financial markets. the federal service also winding down the specific liquidity facilities it created during the crisis. on february 1, a number of these facilities, including credit facilities for primary dealers, lending programs extended -- a land -- intended to help stabilize money market mutual

funds and the commercial paper market, and temporary liquidity swap lines with foreign central banks, or allowed to expire. the only remaining lending program created under the federal reserve's emergency authorities, the term asset- backed securities loan facility, is scheduled to close on march 31. in addition to closing its special facilities, the spat -- the federal reserve is normalizing its lending to commercial banks through the discount window. the final auction of discount- window funds to depositories through the term auction facility, which was created in the early stages of the crisis to improve the liquidity of the banking system, will occur on march 8. last week we announced that the maximum term of discount window loans, which was increased to as much as 90 days during the crisis, would be returned to overnight for most banks, as it was before the crisis erupted in august 2007. to discourage banks from relying

on the discount window rather than private funding markets for short-term credit, last week we also increased the discount rate by 25 basis points, raising the spread between the discount rate in the top of the target range for the federal funds rate to 50 debate -- to 50 basis points. these changes are in response to the improved functioning of financial markets which have reduced the need for extraordinary assistance from the federal sir. these adjustments are not expected to lead to tighter financial conditions for households and businesses and should not be interpreted as signaling any change in the outlook for the monetary policy. although the federal funds rate is likely to remain exceptionally low for an extended period, the federal reserve will at some point need to begin to tighten monetary conditions to prevent the development of inflationary pressures. notwithstanding the substantial increase in the size of its