tax and generating other sources of revenue because sales taxes just aren't going to be there for you like they have been the past quarter century. >> if you could waive . do, what would you tell them? >> first, in the spirit of being aggressive, i would do four things. first i would extend unemployment insurance benefits for people who lose their job in 2010. right now you lose and you get your 26 weeks, and you're in trouble. second, more help to state government. i think i made a strong case for that. i think that is very important. it is not that states aren't cutting. their expenditures are falling.

it is important that they don't completely crush their budgets because that could obviously hurt the economic recovery later this year. third is a jobs tax credit. there are three poemsals. if i were doing it, i would go with the. 's proposal with a few twists. it is something that it is something that substantive that really ches the attention of business people. the proposal in front of the senate is small and i don't know that it generates the excitement to get business toss hire. it is an . expand out the power of the s.b.a. to make loans. part of the stimulus was s.b.a. lending. they need more funding, and i would become more concerned with the terms. you can make s.b.a. lending much more effective, and that

could make a big difference fast. the president's proposal to take tarp money and recapitalize community banks i don't think is going to work quickly enough. i don't think you are going to get institutions to take you up on the money. one more thing. [inaudible question] >> direct loans means raise the s.b.a. loan guarantee. i wouldn't go up to 100%, but i would raise it up to 97.5% for one year. the second thing is i would be pivoting on long-term fiscal situations. i think we need to make sure the economy is off and running, because you can't address long-term fiscal situations unless we are growing. if we are not growing, nothing works in the long run. let's spend that money, a couple of hundred billion dollars to make sure we are off

and running. we need to pivot fast and make sure we get a proposal because we need tax increases and spending cuts. we need someone to tell us that, and someone who is bipartisan. the sooner we believe we are going to get that medicine, the easier to respond to the near-term problems. >> you talked about the housing market as one of the things that got us into this problem in the first place. the shoe appears to be ready to drop on the commercial market soon. from what i've read@@@@@@@ @ @ >> just as the big banks got in trouble in the housing market. are those reports -- had they already been factored in not

only to the stock market, but to the economy more broadly? how do we deal with that? everybody around this table believes there has been a problem with access to credit for small businesses. your thoughts about the sba were very constructive in that regard. the question is, given that lending got us into the trouble in the first place, how do we think about that as all of us are pushing for additional limits? >> the commercial real estate problem is a weight on the recovery. i thought i depressed you enough with the three reasons for concern. it would have been #four. the link between commercial real estate and the economy is -- the

first is what you mentioned, small banks have problem with commercial mortgage loans. we lost 140 banks last year, and there are 550 banks on the troubled list. small banks are choking on commercial real estate loans. small banks are key to a small communities. business statistic. businesses that employ fewer than 100 employees account for more than one half of the hiring. if they can't get credit, they can't get going. the second link is direct. a collapse in commercial construction. it has been collapsing, and that is a direct hit to the economy. the good news, as you said,

this is largely factored in. it is no surprise. i think we have this pretty much understood in the financial markets and real estate community, and in the banking community. and it is a much smaller problem than the residential mortgage problem. to give you another number. the total residential mortgage debt is close to $10 trillion, and the total commercial mortgage outstanding is $3 trillion. underlike the residential mortgage market, the federal government can step in through fannie, freddie and others. there is no way for them to do that on the commercial market. they can work through the problems, and i think that is hang, so i think we will be able to digest it. it is a negative and doesn't help, but it is not going to

undo us. >> i can't say no to him. he is much bigger than i am. >> no, you can. you mentioned in one of your graphs, you showed thep, government hats grown in the last 20-plus years tremendously, allstate governments. and then it has dropped off? >> yes. >> do you believe there is an ability for us to adjust government? it sounds to me that you think the inevitable that taxes will have to be raised. >> i think that gap, which is now in my mind between revenue and expenditure, where we are right now, it is probably about $150 billion right now. i think that gap can be closed with budget cuts, some tax increases and growth. revenues aren't going to continue to fall forever. they are going to start to grow with the economy.

so by 2012 or 2013 they will start to narrow. >> i am understanding you made a comment that the levels of our funding, 2008 levels, will bee1 2012, 2013 or 2014? >> before you get back. >> so we have to get from here to there? >> that is the bottom line message, yes. your work is just starting. broadly speaking, manufacturers, he represents one of the first sectors to turn. you represent one of the last sectors to turn. sorry about that. maybe you can tax him. only kidding. [laughter] yes, sir? >> i found your presentation really discouraging because it began with a chart of we are now moving into recovery, and we are out of recession, and then you enumerated a long list of facts that were fairly

discouraging from the standpoint of state budgets, the standpoint of the taxpayer and the consumer. what you described from the standpoint of policy is in essence the federal government went all in. if you were playing poker, went all in saying we are going to put the chips on the table and try and make a change here. what if we miss diagnose the whole thing? a lot of the remedies you describe and what has been attempted has been based on an inventory-driven recession. you throw some money at the equation, the consumer spends it and gets the wheels turning again, and you go from there? what if this thing was a balance-sheet driven turn-down, in which case we probably maybe things worse by encouraging the consumer or government to spend at levels that maybe were unsustainable? what if we miss diagnosed the whole thing? what then?

because then we really would have a problem if things don't resuscitate here shortly. >> you make a guide point in that the diagnosis could be wrong. but my sense is that -- let me say that in most times, i would think what we did here, 99% of the time this is not something i would advocate. using stimulus in the way we used it, doing the auto bailouts, helping homeowners really as you put it, go all-in. i agree with you. but i think there are times -- 1% of the time, that is out of 100 years, a 100-year event, where it is important we do go all in. otherwise we are not coming out, and that was a judgment call. you are right. we don't know everything. that is why we are debating endlessly the stimulus.

but my sense is that if we did not go all in as you say, we would still be in a recession, and the financial system would still be in a mess, and it would cost taxpayers at the end of the day more. i don't say that lightly. i am with you 99% of the time. >> we will take this one and then we will have to wrap up. >> thank you. mark, it is great to have you back at n.g.a. i have a question that joe and mark were asking and trying to get at. >> but you want a more upbeat answer? >> no, not that part of it. but the emphatic way that you said we have to raise taxes, as if that is just a given and we have to do it. i understand, i think the reasoning that you use. i am curious, what is the difference between those people who would say to you that is the absolute worst thing that we could do right now?

coming from my perspective as the leader of a state and who has watched spending and watched what happened when revenues increase, if the assumption is by taxes going up, we will then be able to bring our expenses and our revenues more into alignment without completely decimating government programs or something, i think the history would show that when revenues go up to the government, it is not used in that way. it is a signal that now we can expand and do something else. what would be the difference between your philosophy that we have to raise taxes and a person who would come out and say that is the opposite of what we to be doing? how is it that they see economics and a potential recovery that differs from what you are seeing? because certainly there are people -- and again, i have tremendous respect for you, but there are people i equally respect who see it the exact

opposite. what is the difference in how you reach your conclusions? >> right. let me say i don't think we address our long-term fiscal situation by solely raising taxes. i think it has to be a combination of what we are calling spending cuts, or at least much slower growth in the rate of entitlement programs, combined with higher taxes. we cannot solve the accounting problem that we have in the long run without both. i think there are intelligent, smart, efficient ways of doing both that don't -- that are going to be painful, but that will allow the economy to grow and prosper and actually probably result in a better economy sooner than anyone thinks. if we do these things, we will be rewarded from the financial system, financial markets, and it will benefit us. there is a reasonable debate

about the merits of racing taxes that is a legitimate one. my perspective on this is the idea if i lower tax rates, i get people to work harder and do more entrepreneurial thing and generate more tax revenue. >> or let them keep their money and spend it and generate that activity. >> that is a good solid argument when tax rates are very high, and you bring them down a lot. down a lot. that is what we did during the we brought them down a significant degree, and it made a large difference and help to the economy in the long run. but i think the tax rates we are talking about are much lower than they were. if -- we don't have to raise them a lot, just a little bit in a prague-based way -- in a

broad-based way that would not have negative consequences the economists would suggest. i don't disagree with me philosophy with the philosophy, but what kind of taxes will raise? that will make all the difference at the end of the day. thank you, it is a pleasure. [applause] >> thank you so much. we promised not to shoot the messenger. we appreciate you taking the time to join nga. we will turn to someone who is an innovator in the private sector. i would like to introduce senator granholm. >> i suspect this introduction

will lead you to a speaker that will be a little more optimistic than mark zandi did, because alan molly is a champion and positive force -- alan mullaly is a champion. he was the ceo of bellingham -- ceo of boeing, and was recruited to become the ceo of ford motor co.. many of you know that ford was one of the companies that did not require taxpayer assistance, and has done a phenomenal job of emerging and navigating a tough time. that is under alan's wonderful leadership.

we are proud to have him as a c.e.o. he has done a great job with ford. i have to say just a quick personal story. because he is such a good guy, my husband, dan mull hearn -- mulhearn, comes from a ford family. we are all ford all the time in our household. he called dan and said your dad worked for ford? dan's dad passed away many years ago. he said yes. alan said is your mom still alive? dan said yes. what is her address. alan sent her a box of ford stuff, an umbrella, and a small

car. not a real car. to show you the combault of human being he is, he wrote her a note. he wrote her a note saying ford stands on theñi shoulders of me like your husband. i would like to introduce you to somebody who is such a quality person, that he has not only steered ford into a successful path, but he truly has made my mother in lawñi cry. please welcome our next guest. [applause] of >> thank you. >> the last time i was with mark, i was testifying. do you remember? well, it was a big deal to me at the time. [laughter] >> i was thinking the same thing like come on, mark, we have to get on with it here. but mark is a tremendous

professional. well, i know you have been through a lot this last couple of days, but i want you to know it is all going to be ok now, because ford is here, and we are going to take care of all of your automobile needs with the finest cars and trucks made in the world. ok? [applause] in addition, i was very surprised i was invited to the nation's c.e.o. meeting. i asked why and what could i do to serve, and what came back from your team was that you were interested in how ford had done what we have done, and also a lot of the things we have been through, you are going through right now. so where there are lessons learned, things we can talk about and share. i said i would be glad to come. what i would like to do is spend a few minutes and tell you a little bit about the ford

story, kind of the rest of the story that you don't maybe see on tv, and then highlight some lessons learned that maybe is applicable to what you are all going through. and then i would like to just offer a little bit of perspective about manufacturing in the united states and the global competitiveness of the united states, and then just touch on the importance of public-private partnerships. as the governor just mentioned, after 37 years at boing competing with the best worldwide, i want to give you my perspective of what it takes to the united states to move back up and compete worldwide. there is no reason we can't do it. and your world ford company is doing it today. here the story. jeffri mentioned this. i got a call from ford, and i had the honor to serve on every

boeing airplane except the 707. i'm not quite that opened, but the 727, 737, 747, 757, 767, and the 777. if you look at all the planes are flying, 80% of all the seats are on boings. when i got this call, i knew i was in trouble because you have all had this call where you don't say no right away. all we remember was that blue oval in every community across the united states. the ford dealer would take care of you, get you home at night, fix it up, wouldn't tell your parents all the time. ford was like the fabric of every small, medium and large

city in the united states. the more i learned about it, the parallels were incredible. i mean the technology, the manufacturing, the product line, the global presence. but also the situation that they were in, because it was pretty dire, as you know, three years ago. in the united states, because we have had a cost structure where we couldn't make cars in the united states and make them profitably, we went to larger s.u.v.s and trucks. it was a good business, but the world was charging with energy changing, and ford was not prepared for this future. they were essentially losing money on all of their vehicles. they were running out of cash. fuel prices was moving up. the united states was moving into a recession, which was starting to take the rest of the world with it. it seemed like a great opportunity to accept this job.

the kids were excited. they knew all about the boing planes, seven new models. they all have a pointy nose and a tail. now they can hang out with mass tanks, fusions, and maybe live in an f-150 and pull your house behind it. so they were excited, and i was excited, and made the decision to come to ford. we are going through exactly the same thing. the parallels we have been talking are absolutely incredible of what you are going through and what we are going through together. but the first thing i would offer is the importance of coming together around a compelling vision, about what you stand for, what you are serving, what your services are, and it needs to be compelling. we are serving. we are the c.e.o.'s. it is our most important job to decide what business we are in, and is that compelling for everybody involved.

in ford's case we ended up going be back to henry ford and his original vision. on january 24 of 1925, in the "saturday evening post," henry ford had a full page tiesment. it said ford, opening the highways to all mine kind. it talked about ford, how grand it was, how important it was. it was about safe and efficient transportation. it needed to be affordable for all of us. we needed to be able to work there, buy the products, have great jobs, contribute to energy independence, energy security. everything we are talking about today, that was henry ford's original vision. so we pulled together around that vision. it excited all the shareholders. the most important thing is deciding what you are going to be, which is strategically deciding what you're not going to be. things were starting to slow down, so what did we need to do

to act on that? this is really tough. as leaders you know that the most important thing we do is we hold a couple of things in our hand simultaneously. despair, because everything is slowing down, and we can't get out of here, and the hope, and the plan for the future. i proposed that the best strategies are ones that deal with both of those, and everybody knows what the situation is, and you can deal with reality and develop a better plan to properly grow coming out. . >> we took the hurt and it was

awful. we took it down to the real demand, so it kept everybody going and consolidated the entire network so it could get back to profit operating. if you don't take it you cannot come back the other side. during the worst of times we decided to accelerate the development of the new vehicles people wanted. the important part of that restructuring was that we sold jaguar and are in the process of selling volvo. the next thing we decided was you would have a complete family of vehicles like the original fourd.

every vehicle we designed from now on would not just be competitive, but they would be best in class. that is why you see the third- party recognition that every vehicle is best in class in safety and value. 70% of the cars are recommended. that was a conscious commitment for us to compete on a global stage. it meant we have to have a cost structure supportive of that. over the years the unions have made agreements together and we were not competitive. we could not make a profit, which is why we brought -- why we bought all those other brands. where do we really want to take this company? can we take the actions that

would allow us to make cars in the u.s. to make a profit? our conclusion was we could. and help this invest in the united states? our conclusion was that we could. we went to work and an agreement came out where we define benefits and the fine contributions, we went to wages to be competitive, to allow flexibility so that we can operate in the united states profitably. and the need is pointed out that is that we are now contract -- converting truck plants and car plants, making the best cars and trucks right here in united states. the third thing that caught a lot attention is that we needed a small home improvement loan to do this. you don't have the same flexibility that we had on doing that, but we needed to get a

loan to be able to do this plan. the bankers believed in us and believe in our plan. now we are actually paid back our loans because people believed. this is also not support of the u.s. auto industry last year but u.s. auto industry last year but also be paying ta you have to include all the stakeholders, nobody gets left out. so we have included all the stakeholders, lawyers, employees, bankers and we operate in every state. we want to create a viable ford

business. it is fantastic. 14 out of the last 15 months we have increased market share with the best companies of the world. we returned to profitability in all our operations in the third quarter of last year. we provided guidance this year that we will be profitable for the entire year, so we are on a plan. i hope mark is right. even though the recovery is more gradual because of systemic issues, we will actually be able to grow and provide opportunities for so many people in the u.s. and around the world. for my fellow ceo's, that is my report to the board. i will be glad to take any questions. [applause] yes, governor. >> first of all, let me thank you and your team for what you have done at ford.

the way you got yourselves back on your feet and one of the best automakers in the world again, i think it speaks highly of the leadership and your work force. you have a high-quality work force. we had a great partnership in kentucky with ford. they employ about 5000 and produce great vehicles. let me ask you what your views are of how this country is supporting the manufacturing sector in general? are there things that we should be doing? what should we be paying attention to to make sure we continue to have the kind of strength that we need to be the number 1 industrial nation in the world? no. 1 destination in the war? >> well, i would be pleased to offer my thoughts on that.

it is so important, because as you know personally and all of you in manufacturing, we are fighting for the soul of america right now, because we have not held manufacturing as a high priority in the united states. i think sometimes this may because we provide manufacturing with a small m, but if you look at the r and d, 75% of investment comes to manufacturing. all the science, the enabling technology, is the manufacturing, so when we think of manufacturing, and i know your state does, too, this is manufacturing with a big m. we can compete where everybody else around the world will compete to do what it takes to get into manufacturing, because it is the answer for energy independence, in the energy

security, national supplant -- national defence, as sustainability. i think is so important. what we can do it -- the most important thing is that we come together with the shared view that it is important in that broad context. the second thing is that the move it up on the u.s. agenda. that means that we need to have access to markets around the world, which we do not today. manufacturing ought to be on the trade agenda in every free trade agreement that we're negotiating. that is why we are disappointed with the caribbean free-trade agreement. the koreans are taking advantage of the u.s. market. the first thing is access to the markets. the second thing is, access to a competitive capital for all this. another big one is a stable, predictable, and globally competitive regulatory environment and tax regime.

all the things that we're talking about, the certainty, we have no idea what that means for business is going toward some -- ford -- what that means for businesses going forward. you mentioned the employees afford. i've been all around the world with boeing and for, because 60% of our sales are outside the united states. i've never seen such a skilled and motivated workforce that we had in the united states. everything that makes the united states great, the technology and innovation, there is nowhere else around the world that has nurtured and environment like we have in the united states. making manufacturing important and cool again so that we attract the best and brightest in engineering and science, all the enabling technology we're

talking about, and another one -- and other really big one, letting the markets determined that currency exchanges. this situation is just a killer. we know what other countries are doing, they are targeting manufacturing, they undervalue their currencies so that they make things and we cannot. right? are we talking to each other here? we have got to have their trading around the world. you are the ceo's of this, and our ability to compete worldwide, you have to push the real-based trading said it weakened have access to capital and have free trade agreements that allow that to happen with no problems with the currency. that would be the big ones. >> you are able to change this. you change -- you came in and

change it. the work force change it with you. what is preventing the other companies in america from doing the same? >> [unintelligible] i cannot -- it is not my place to comment. >> is it possible, knowing what we know about your competition, it could be done with some adjustments? >> as i said, i think that we to the united states and american companies, can compete with the best in the world. that is a very big starting decision that we have to make. if you do not believe that, if you're not ready to take the action to include all the stakeholders, that is a self- defeating problem. >> he sat around and worked it out. >> i really like where ford is going.

>> six years ago, several governors testified before a congressional committee on manufacturing and we talked about trade. we said that but it fell on deaf ears. in the manufacturing leaders of this country convince the administration that we have to take a strong strand -- us from stand on trade to give us equal access to the markets? >> absolutely. we have so many things going on in the united states. i want to bits on everything -- i do not want to kibitz on everything. but we cannot make it ok unless we are growing. if you are in business, there is only one answer -- profitable growth. if you grow your business, then

there is nothing but opportunity. in the united states, our government is corn to grow less than gdp -- is going to grow less than gdp. everywhere else, is going to be faster. we need a public/private partnership where we deal with these issues where we allow the trade position of the united states to compete with the rest of the world. we need everyone to come together on the chair rule. >> alan, thank you. i." given us optimistic confidence about that american icon, the blue opel, having a bright future. you mentioned some similarities between our situation. one huge difference that we face that is different in business is that we are countercyclical. when our revenues are down, our

demand is up which has unique challenges for governors. can you address that for a second of where you would attack first? >> all that i know is that the most important thing is to deal with reality. and so, you are absolutely right, with a specific example that you said. on the other hand of that, on the other side, is that we have to deal with reality and get back to staying within that budget, making choices on the services, and we have to deal with the cost structure. we know where we are on wages and benefits. they need to be dealt with. they are not competitive. i'm looking for somebody merc something here. work with me on something. -- i am looking for some

nodding or something here. work with me on this. it's exactly what we need to do one every element i've served on jennifer's competitive council, on christine's, and you pull everybody together. whether it is education our taxes or the environment or energy, wages and benefits, and i think the leadership and the opportunity for the leadership challenge is to bring everybody together and address that. that is the only way for us to compete and profitably grow our businesses. >> one of the great things you have done is the playbook of offense and defense at the same time. i think that as what we're trying to do. think is the investments made in the of electric vehicle.

we made a commitment to $1 billion, and the electrification of the vehicle. the boys all like to take it up one more step. the and manufacturing for all of the years, the compelling vision is about where we're going as a country. i want to believe that sometimes sooner rather than later we're going to come together on an energy policy. i think that we're going to come together on a manufacturing policy, about where we want our country to go. i think energy independence and security, the national defence, and once we start laying out a compelling vision of where we want to go, that will release all of our creativity. just like the automobile industry. we are part of the solution for energy independence insecurity. i don't know about the cafe policies but we know we're going

ashley generate clean energy and use electricity. we will come together on that kind of a policy. we have taken a long-term view that we are all acquainted be using cleaner energy, going forward. we're focused on the best vehicles and the world and laying out at technology roadmap to move to more hybrids and electric, and working on batteries, moving to a hydrogen future. the minute that we come together on where we want to go, ford motor co. is one to be right there with the most enabling technology to make and clean energy future. but if we do not come together on the broad policies about where the country will go, then is all upstream. that is way we are making investments to date. >> everyone would like to see

bringing manufacturing jobs back home. we have a corporate income-tax of around 35%, with state income taxes over 40%. how big about competitive problem is that for jobs coming home? >> i tried to say that it was predictable and globally competitive, regulatory and tax structure. in our case, we continue to make great progress where we are bringing jobs back now in the united states because we're competitive, adding up all those elements. about the tax structure, that is absolutely key to competitiveness. >> > what did you did not mentin was natural gas. we at governors luncheon where

we talk about natural gas and do you see that like you see the other parts of the fuel revolution and technology? >> absolutely. i would be remiss to not mention that. natural gas is a very clean fuel. the only issue for natural gas for us is the packaging of it in vehicles. the big tanks and the pressurization and smaller vehicles makes that packaging tough. in bigger vehicles, it opens up a lot more possibilities. the question is, where do we want to go as a country? the infrastructure that we have to put in place for either electricity or natural gas, or hydrogen, that is a tremendous investment that we all have to make. we have the tools to be able to

continue to that solution. the big year issue is innovation on a systemwide structure. -- the bigger issue is innovation. >> what is the most;ç?3w3q it thing for you as manufacturers to choose as a goal for emission reductions, as opposed to picking winners or losers within the different technologies? >> again, i say the same thing over again. we cannot choose one of these infrastructure solutions, so right now we are doing the enabling technology from a manufacturing point of view on all of them. if we are going to be in business for the long term, and some are very organized. they are strong partnerships and are working on the grid, working on the naval technology for the

battery. the sooner we get to a shared view about where we want to go on energy, then the faster we can align our resources and technology to make that happen. çóbut right now is just patchwo. back to the regulation, and i know is was hard, but one thing we did together that absolutely is fantastic, that is to come together on one national standard for fuel efficiency improvement and co2 reduction. and carbon the oxide production. this rotates every bit of technology and innovation to improve fuel efficiency and reduce co2, that we know of. if we would have had a different set of requirements for every state and from the epa and the department of transportation, we

could never have come through for you. but i guarantee that because we stood tall and came together round one standard, we're going to absolutely exceed your expectations from ford. we were just talking about this. the more that we pull together our around where we really want to go and come together on a plan to do it, it lets us know that ford motor co. will be there to exceed your expectations. i wanted to tell you, thanks a lot. the boys you seem to be saying that the government -- >> you seem to be seen that the government needs to make a final decision. why don't you guys get together and come up with what that is, what sort of technologies that is going to be played on? >> again, the real issue here is the infrastructure. we have the technology now that

you can take a fuel cell, a hydrogen tank, mix them together with platinum, water comes out of the tail pipe and electricity goes over to an electric motor. that is great and we can do it technically. the same thing with electric vehicles. such improvements on the batteries, we can have electric vehicles and plug-in vehicles. but for widespread use by the consumer, we need the infrastructure throughout the united states just like we have with gasoline to date. that is a tremendous, tremendous investment that we cannot make. we have to make that as part of the infrastructure that we needed united states. whichever direction we go there, we will have in labeling technology that we can compete, provide the best solution for that division. >> it sounds chicken and egg. what other infrastructure would be other than what you decide to ensure the only ones that

manufacture cars? >> we have to decide as a country. what is going to be our energy policy? where do we want to go? this thing about the cafe legislation -- 1975, we pass cafe, improving the fuel mileage of cars because they burn gasoline since 1975, we have improved fuel mileage by wonder% on cars, 75% on trucks. we tried four times as miles and are imitating 68% of our oil. i don't think things are going >> the latest on the economic stimulus. of the $787 billion signed into law last year, $338 billion have been committed to states to spend on stimulus projects. that is up $5 billion from last

week. $186 -- $186 billion have been paid out. you will find other defense and congressional hearings on the stimulus, as well as links and government groups tracking its spending. that is at c-span.org. >> president obama spoke briefly at the white house about today's earthquake in chile, saying the u.s. is ready to assist with recovery efforts should the government asked for help. >> good morning, everybody. earlier today a devastating

earthquake struck the nation of chile, affecting millions of people. this was followed by multiple aftershocks and prompted a tsunami warnings in the pacific ocean. earlier today, i was briefed by my team on the steps we are taken to protect our own people and stand with our chilean friends. indications are many lives have been lost. on behalf of the american people, michele and i send our condolences to the chilean people. we stand ready to help with recovery efforts. chile is a close partner of the u.s., and i have reached out to the president to let her knowç$ the people need assistance. our hearts goi]ok out to the

families who may have lost loved ones. pra tsunami that could reach american shores later today particular, the in hawaii and american samoa. a tsunami is in place and people have been alerted to evacuate coastal areas. i urge citizens to listen closely to instructions from officials who will have the support of the government as they prepare for a potential tsunami and recover from any damage that may be cost. i urge citizens along the west there may be dangerous waves throughout the day. the most important thing you can doç isym carefully heat the instructions of your state and local officials. once again, we have been reminded of the awful devastation that canç come at a moment's notice. we cannot control nature, but we must be prepared for disasters when they strike. we will continue to take every step possible to prepare our

shores and?[3 protect citizens. we will stand with the people of chile as they recover from this terrible tragedy. thank you very much touch. ç÷çóokçqw3i]çç>> does> as the "washington post "correspond and, he has traveled the world. they are about his issues on the united states of europe, healing of america and confucius lives next door. watch our conversation on book tv's in death. >> james lentz, chief operating

officer for toyota sales talks about the recent recall of millions of vehicles. later we will hear from one couple who experienced problems with the accelerator on their lexus. this portion is about one hour and a half. >> thank you for inviting me here today. my name is james lentz, and i am the officer of toyota motor sales u.s.a.. in my testimony iç will address the recent recalls and actions that were taken to restore trust in the millions of americans who purchase and drive our vehicles. for twoç generations we providd americans with cars and trucks that are safe and reliable. we intend to produce safer in higher-quality vehicles in the future. even as we pave the way for the next generation of electric vehicles and hybrids. in recent months we have not lived up to our high standards

our customers have come to expect from toyota. çit has taken us too long to ce to grips with a rare but serious set of safety issues despite our good faith efforts. the problem has also been compounded by our poor communications within the company andç with regulators ad consumers. while a lot of auto companies have recalls and all major ones have experienced complaintsç[, toyota's recallsw3 have caused concern among our customers. i wouldi] like to assure the american people that nothing is the safety of the vehiclesueñaht our customers drive. we are committed to not only fixing the vehicles on the road and ensuring they are safe, but making our new vehiclesçç more reliable through enhanced communication and doubling our

focus in putting the customer first. our 1500 dealers are making efforts to complete our recalls as conveniently as possible for our customers. some dealers are staying open 24 hours a day seven days a week, and repairing vehicles at the rate of 50,000 a day. we have for. nearly 800,000 vehicles. -- we have repaired 800,000 vehicles. we are confident these repairs will make them among the safest on the road today. our engineers have identified two mechanical causes of unintended acceleration covered by recalls. we addressed these thrnegh our open recalls. one impulse floor mats that went improperly fitted, can entrap the accelerator pedals. they can also overtime gross sticky with humidity. the solutions -- grow sticky

with humidity. we are confident no problems exist with the electronic throttle systems. we have multiple fail-safe mechanisms to reduce engine power in the event of a failure. we have done testing on the system and never found a malfunction caused -- causing unintended acceleration. in december we asked an engineering consulting firm to conduct a comprehensive analysis of our electronics throttle system, with an unlimited budget. their report confirms it works as it is designed. we will make the results of this evaluation available to the public as soon as it is completed. why did it take so long to get to this point? with respective pedal

entrapment, tonia conducted investigations which focused too narrowly on technical issues without focusing on the way consumers use our vehicles. in the case of sticky accelerator pedals, we fail to respond to information emerging from europe and the u.s. wheat acknowledged these mistakes and apologize for them. we have learned from them. we understand we must think differently when investigating complaints and communicate faster and more effectively with our customers and regulators. our recent voluntary recalls of teh prius and lexus hybrids illustrate this approach. we are also going for the -- bar president announced a review of our operations that he will leave with the support of a new chief quality officer for north america, and our w3÷úçóçothel

regions. we will ask outside experts to evaluate funding is to make sure we exceed industry standards. we are expanding our network of technical officers in the u.s. so we can gather information faster and respond to reports. we will install brake overridew3 systems, making us the first manufacturer to offer this as standard equipment. we are announcing we will install this system on an extended range of vehicles, including takoma and sequoia models. the previously announced this will be -- these actions underscoring toyota is going beyond what is necessary to

ensure our customers can be completely confident in the safety of their cars and trucks. chairman waxman, and now ranking members as well as members of the committee, these are only some of the steps we are taking to earn back the confidence of congress and the american people. our team members and suppliers in the u.s. as a backbone of that effort. i am confident we will succeed in restoring customer trust in our quality and reliability of our vehicles. thank you very much. i am ready for your questions. . .

been a happy time for your company or for your customers. people have been very anxious people have been very anxious appears to be a rare situation, but it is a very scary and possibly fatal situation if a car has a sudden acceleration and the car seems to be out of control. for the future, you're suggesting that you're going to put in a system where the brake will override the gas pedal. >> yes, 2011 model year vehicle. with the exception of one vehicle by the end of this calendar year, most of the vehicles that come into the u.s. will have a standard equipment the brake override system. >> that will be helpful, but let me ask you about the cars that are already on the road. people have these vehicles. you're not planning to do any retro fit of the brake over the gas pedal in those cars? >> there are seven of those vehicles currently on the road that we are retrofitting. >> seven models.

>> camry, avalon -- >> you're going to rhett fit all the vehicles. >> those that are technically possible we're rhett fitting. >> is your microphone still working? >> the green light is on. >> okay. >> just try it a little closer, if you can. >> okay. >> how many vehicles will then be on the road with the possible problem if the problem is due to something other than the mats or the sticky pedal? >> yrn the exai don't know the r of the vehicles on the road that has that system. it is the majority but i can't tell you the percentages, i don't know. >> the majority of the vehicles on the road already on the road that will be retro fitted. >> vehicles on the road will be retro fitted. >> okay. now i mentioned in my opening statement and it's been well publicized that i've been critical of your assurances to the american people and i think we have a film that we could

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

unintended acceleration. >> we are very confident that the fix in place is going to stop what's going on. >> we're having some trouble with our sound system. do you stand by that statement? are you still confident that the two recalls that you've put into place will solve the problem? >> let me make sure that it's very clear on my statement. >> okay. >> unintended acceleration as i view it and define it is any time that a driver removes their input from the accelerator and the vehicle continues at some speed, and there are many different causes for that. there are mechanical causes, whether it's software issue in a transmission, whether it could be an idle up from an air conditioner, whether it could be a faulty cruise control, whether it could be a pedal, in this case an entrapped pedal. >> what concerns me, mr. lentz, there seems to be a difference

between your statement that was given on television and the statements that other toyota officials have given to our committee staff. even your own counsel in a letter to us said that the sticky pedals become lodged in a partially depressed position which typically does not translate into a sudden high speed acceleration event. also it appears that you're trying to give assurances to people, convince them that both of toyota's recent recalls will address the problem but our committee's investigation calls into accuracy your statement because 70% of the complaints of sudden unintended acceleration that come into toyota's customer call line were from vehicles -- drivers whose vehicles were not included in any of these recalls. how do you respond to that? >> well, if -- if i could. the week -- the week -- the day that i was in new york doing interviews, there were a number of television interviews.

there was also an audio conference call with about 150 journalists, and if i could read to you just a response that i made to a question. >> it's different than the one on television? >> yes. >> and is it more consistent with what we're being told privately by your counsel and by your own -- >> i don't know exactly what it is. >> let me ask you the question just directly. >> please. >> do you believe that the recall on the carpet changes and the recall on the sticky pedal will solve the problem of sudden unintended acceleration? >> not totally. >> okay. what do you need to do? >> we need to continue to be vigilant and continue to investigate all of the complaints that we get from consumers that we have done a relatively poor job of doing in the past. >> and why haven't you looked at the possibility of the electronics and the computer system being a possible fault as we heard from the first

witnesses in our first panel? >> we have looked into the electronics, and based on the testing that we've done in japan and now exponent that you saw the initial response from their testing, we continue to test the etcs in japan as well as now, what the exponent is doing, and we've not found a malfunction. it doesn't mean that we stop. >> but exponents evaluation has been very, very criticized as not very well done, not scientifically. the sample was too small, and unreliable report. do you have something more from japan that you haven't given us? >> i -- i am relying on the information that i have received from japan that they are confident the testing has been done in japan, and they are confident that there are not issues with the ecu. >> mr. lentz, my time is up. let me just tell you that i'm not confident that you're

looking for something that you don't think exists because if you're not looking for it, you won't find it, and we had -- these two witnesses earlier who spent three hours and came up with the possibility that this sudden acceleration could take place because of the electronics and the computer system. that report that you gave to our committee from that -- from that -- from exponent does not justify ruling that possibility out. >> it's not intended to do that. that's just the beginning of their investigation. it's -- they have many, many more steps to complete, and we'll provide you with that final when they get it done. that's just the beginning. >> that report is the beginning, but that only beginning -- that beginning only started this month. >> it started in -- >> in february of 2010. you're only starting to look at it, and you had an analysis done that was quite inadequate.

we need to be sure that you're doing a full and adequate analysis of something you've denied but which other witnesses have shown us is very possible as an explanation for the sudden acceleration. mr. chairman, my time has expired. i know other members will want to pursue this with mr. lentz. >> thank you, mr. chairman. mr. burgess, for questions. >> just to continue on that same line that the chairman was just following. yes, you have a responsibility to do these things, but there's also a federal agency who is responsible for traffic safety that has an oversight role here. what have they told you about their independent testing of your electronic throttle control systems? >> i don't know specifically of the results of the tests other than there have been many, many cases in the past that have been opened, investigations that have been closed, and they have not found anything. i can't tell you specifically what their testing paradigm was.

>> well, of course, we've had so much data in front of us today. there's one graph here that shows the -- the complaints of unintended and uncommanded acceleration really start in 2002 which my understanding is that's the year that the electronic throttle control actually came into being on your cars, is that correct? >> i believe 2001 might have been the first year on ls, but it's very close. >> what -- now you heard mr. gilbert testify here today and actually the response to mr. buyer's question that he cut no wires when he did his simulation. have your guys been able to reproduce his results without cutting wires? >> exponent in their initial study, i was up at exponent a few weeks ago, and they showed how they tested the vehicle for a vehicle short and other situations that involved the electronics from the pedal to the throttle ucm.

>> were they able to reproduce what mr. gilbert showed? >> no. in every case they went into an error code. as you, we received mr. gilbert's information very, very late. >> let moo ask you this. you know, are you going to hire him now to -- it took you three hours to find the problem. if he's correct, we have to make that leap of faith. >> but quite frankly we encourage people to try to find it. it's not in our interest if a problem exists to not find it and not figure it out, so if it exists, we encourage the mr. gilberts of the world to look at it. it just seems a little too good to be true that somebody could figure this out in three and a half hours when an industry has been looking for this for ten years. >> it may not be fair to ask you to testify to this but you heard mr. gilbert's testimony. do you or someone in your organization think it is possible that what he's described would be responsible for what happened, and if it did, would you expect to see some physical evidence, chafing

of wires, crossing of wires sore something that actually brought two circuits in to contact with the correct amount of resistance and then putting the five volts on top of it to create the uncommanded acceleration? is there anyone in your organization who is able to talk to us about that? >> vince is here. he's one of our attorneys, and he has been working with exponent, and at some point we'd love to get exbonenent and mr. gilbert together but if you like vince can give you a very quick explanation of what they found. i'm not an engineer. >> right. >> so i'd probably mess this up. >> since we're taking testimony under oath, i don't know what's permissible here. let me just ask you a question on the fix because i know your guys, your dealers in my area, toyota of louisville, they have been johnny on the spot with this. they have been getting people in, takes them 20 minutes to fix this, but if they are fixing the wrong problem and they really need to be developing whenever you just called the advanced override for the brake system,

then you wonder if we'll have to call people in for yet another fix to the problem. now what actually fixes the accelerator pedal? what have you developed that will fix that problem on the recall? >> there are two different issues. in the case of a sticky accelerator pedal, they are actually putting in a precision cut steel plate. >> we call that a shim, right? >> yes. >> how many different sizes of precision-cut plates are you produceing? >> i believe it's either seven or nine. >> seven or nine. >> yes, yes. >> and presumably this material that's hydroscopic and absorbing water and becoming incompatible with proper function, presumably that's a precision manufactured component, is it not? >> i would assume so. >> the fact that you have to seven to nine different-sized shims. >> i think it has to do with the amount of wear that's actually on the shim, so when the

technician takes the pedal off, they actually measure how large the gap it s and that determines the size of the shim that they put in, the steel plate. >> but it does -- a precision designed, grommet or the shim that we're talking about, it just doesn't seem reasonable that there would have to be so many different sizes in order to fix the problem if the problem was the pedal absorbing atmospheric moisture. >> the size difference is very very small. what it does is it insures that excess friction will not build up in the pedal. what has happened in the past is with where it gets shiny. once humidity gets added to that, it actually builds up to much friction, and that is when the pedal starts to bind or

possibly stick. >> this recall -- the national highway safety administration have signed off on this and feel that this fixes the problem. have they looked at it themselves? >> they do not sign off. we show them our solution and they do not disagree. we are confident it is the right fix. >> what about putting the advanced break override system index >> in production vehicles, it has already started on vehicles like the camry. >> for those of us with older model toyotas who want that degree of safety built in for our families -- how do we go about getting that done? >> it is a re- flash on those vehicles. >> you mean to reset the computer? >> to reset the computer in order to add that. >> technically, how difficult is that to do? >> it takes 15 to 30 minutes.

>> how much does it cost? does it cost? >> we're providing that. >> it just seems that that's something that really should happen in addition to all these other things just to be on the safe side. >> it's for added consumer confidence. >> thank you. >> thank you, mr. burgess. >> while on this rebooting of this computer there, why only some of the vehicles going to be rebooted, not the other ones? >> depends on the feasibility of the unit. some of the computers have different types of chips in them. >> okay. >> some are not rewritable basically. they are hard-coded. >> can't you fix it and rewrite the programs so that all your vehicles are covered? what do you say to the owners who are not going to have this safety feature added to it? they will just continue to drive down a road and hope they don't have a sudden unintended acceleration? >> again, the incident or possibility of that happening is very, very slim but understanding if it happens to you it's a very, very important incident. >> sure. very, very slim. let's take a look at this and from slim let's go to shim.

you talked a lot about the slim with mr. burgess, but the documents we asked for, and i put this in our letter on february 22nd, on the second page, i was going to ask you this question. we wrote to you on february 2nd requesting any analysis that toyota -- that shows sticky pedals can cause some unintended acceleration. you didn't produce any analysis. in fact, your counsel actually said, quote, typically a sticky pedal does not translate into a sudden high speed acceleration event, so this shim isn't going to solve the sudden unintended acre acceleration. >> it will prevent unintended acceleration. high speed, most likely not. >> as chairman waxman pointed out of the complaints you have in your own database 70% of the unintended acceleration events in your own database involves vehicles that are not subject to the floor mat or the sticky

pedal recall, so 70% of the problem isn't being addressed by the recall, correct? >> a couple of issues. most important part about it is those in many cases are customer -- customer generated i don't want to call them complaints but feedback to us that they are having an issue. what's most important is that we are able to investigate those as quickly as possible so we can understand chaes going on, and in the past we have not done a very good job of doing that. >> okay. haven't done a very good job doing that. mr. kane in the last panel testified over 2,000 complaints and when he went through it he figured maybe half of them, 1,000, 1,130 some cannot explained other than what the driver said other than the sudden unintended acceleration. do you agree with that. >> i'm not sure if his database

is sudden or unintended. i don't want to get into a debate over what is here. there is a big difference between unintended and sudden unintended. my understanding is that the database through noticea includes other things such as surges, whether it be from a cruise control, a transmission or other issues, so i -- i can't tell you from the date that they are using it. >> but some of the complaints are like recently. i put it in, park, pop over a curb and hit a tree and one gentleman went off a cliff and his wife died. >> yes. >> and that wasn't a high speed but that was a sudden unintended acceleration. it doesn't always have to be at high speed. >> correct. >> all of them have to be taken seriously. >> yes. there's no question. >> so 70% of all those complaints in your database we don't have annence for yet? >> there are answers with other mechanical breakdowns from transmissions, from other engine surges. there's pedal misapplication that's the possibility as well

and we're not here blaming customers but it does take place. >> but it sort sounds that way. i don't mean to be nitpicking here, but when mr. wax man asked you a question about unintended acceleration you said as i would define it. that's when you said to the chairman, and it seems like when we get this sudden unintended acceleration it's the way toyota wants to define it, not the customer. >> well, but i think we're defining it as a customer is defining it and that is a much broader spectrum of any type of -- any type of surge or movement in the vehicle that the customers doesn't expect to take place, and that can happen from a number of different sources. to me i'd rather have the broad spectrum to look at than a more narrow spectrum of high speed. >> well, let's talk about the customer here because this started, as you said in the 2000-2001 model year.

by 2004 nhtsa presented toyota with a document showing you had a 400% increase in complaints. that was in 2004. we learn, and you evidence or mentioned in one of your interviews, that you had a recall in europe in what, april or may of this sudden acceler e accelerat accelerator? didn't you do some things in england, in europe, in ireland? did have you a recall there? >> that's on the sticky pedal? >> right. >> yes. >> and in europe or excuse me, edge lan and ireland, is that just sticky pedal? >> that was a sticky pedal in europe. >> and that's in response to sudden unintended acceleration? >> again, it is in response to unintended -- the possibility of unintended acceleration which was a safety issue. >> to me -- >> when you did recall and you're open ended you're fixing you're. did you notify nhtsa of this? >> we knew about it.

>> did you notify nhtsa? >> we notified nhtsa as soon as we knew the situation in the wait. >> well, wait a minute. >> november 2009. >> it took you until november of 2009 when you had a 400% in complaints since 2004 to realize that there might be a problem in the united states after a recall in europe? >> i'm speaking specifically about sticky pedals. thoept go back to 2002. the sticky pedal event began in the united states. there was one instance i believe it 2006 or 2007 but it was october 2009 that we had three corollas and that generated our investigation and we notified noticea immediately that we had seen that. you still, do you have any analysis, every evidence that sticky pedals can cause a sunday unintended acceleration. >> it depends on the definition

of sudden. if it means that you can be depressing a pedal, take your foot off the pedal and the car continues at speed, it does cause that. >> typically does not translate into a sticky pedal. >> not high speed. >> and 70% of your customers in the database, we still don't have an answer for their unintended acceleration. >> there are many factors that lead to it. >> but 70% of them we don't have an answer for, is that fair to say? >> that's probably fair to say. if i can show you one more. this is saturday's "washington post," okay, february 20th. suspicion lingers over acceleration in camrys, okay? and the reason why i bring it up because they cite three fatales of 2005 camrys and it says in each of these three fatal

episodes, the car involved was a 2005 toyota camry, a model that the company has indicated is free from acceleration defects. it's not been recalled for either the sticky pedal or the floor mat interference. is that true? >> i believe so. >> any suggestions on why the camry has this acceleration problem? >> in -- when we -- the model year changed in 2004, there was an acceleration issue that had to do with the transmission, that there was a surge between 38 and 42 miles per hour. and that surge was caused by a torque converter locking up. it wasn't very smooth. it was a shift shock, basically. and that was reported by customers as an unintended acceleration. that software was changed. and that tended to subside that particular issue. >> have you gone back and fixed the software in the 2005 camrys then?

this fatal is the one that went over the parking lot and over the 70-foot cliff. >> again, i don't know -- >> you have put out a recall on the 2005 camry to fix this? a recall? >> on the pedal? >> on this torque issue you're talking about? >> the torque converter was 2004. >> these are 2005 camrys. do we still have toyota vehicles that have acceleration and we don't know what the problem is? >> there's the possibility through either mechanical or human or some other type of error that could cause that. >> thank you. mr. barton, questions? >> thank you, mr. chairman. thanks for those questions. i thought they were excellent. mr. lentz, what's your background? you said you're not an engineer. what are you? >> sales and marketing. >> sales and marketing. i have a degree in marketing and economics and an mba in finance. >> okay. so you do agree from a marketing standpoint that what's going on now is fairly detrimental to

your company? i was in one of your -- two of your principal dealerships in texas yesterday met with me, one in houston and one in arlington. and their sales are down 30%. i would assume from a marketing standpoint, that's not a good thing. >> no, sir, it's not. >> okay. you're the ceo of toyota in the united states. do you -- how much authority do you have to solve this problem? can you pretty well call the shots or do you have to ask for authority from headquarters in tokyo? >> well, i'm the chief operating officer for the u.s. from a marketing standpoint, i call the shots. >> marketing standpoint. >> if you're talking about from a defect standpoint or a determination of a recall standpoint, those decisions have been made in japan in the past. >> okay. i'm not saying that's a bad thing.

i just want to know -- >> but it's changing. >> i want to know how far you can go if you make a promise today can you deliver on it. >> that is changing. there are a number of different organizations being put into the company that are going to make things much more transparent around the globe, much more transparent with regulators and allow us to have input into defect decisions that in the past were always made in japan. there will be a north american committee that makes defect recommendations now. and there will be a process if we don't agree with the decision of that committee that we can have a process to override. to date, that has not existed. >> now, in a prior panel, i don't know if you were in the room or not, but we had a couple from -- i believe they were from tennessee, the smith couple. and the wife, her car experienced out of control acceleration for a number of minutes. i mean she was literally in this

car long enough she could, you know, she put it in neutral. she put her foot on the brake. she tried to turn the ignition off. she put it in reverse. she called her husband on the cell phone. that was not a sticky pedal because of a floor mat. i mean something happened to that car that's unexplainable so far. now we normally when something bad happens in a product, you know, if there's a plane crash, we go to the scene and investigate the plane. if there's a bridge collapse, we go to the collapse of the bridge and we look for structural defect or design defect. if there's a building collapse -- in this case, we have a car that had, you know, out of control acceleration and apparently all that was done was they went to a dealership and did a routine computer program review. why has toyota not obtained that

vehicle and taken it to your laboratory and done everything you could do? >> she mentioned that a field technical specialist looked at her car. that is someone who works for toyota. >> one person we are paying $50,000 a year spent an hour and hooked up a program and said, "we do not see a problem," and fill out a form. you have a multi-billion company with a marketing budget. why in the world want to get that vehicle and do everything possible to determine -- it really does not matter that you have got 5 million vehicles that are performing flawlessly if you have 10 that have failed. you know? her problem is not a floor mat

problem. >> i do not know. >> well, i know. i take her at her word. she is going down the highway at 100 miles per hour. she has the sense to pull the format from underneath the pedal if that is a problem. you know that and i know that. you cannot say that because of the lawsuits. but why don't you get the cars that have had the problem, and if you need to verify what you are doing, and get them. but if i am president of toyota, i am going to get the cars that we know had a problem, and i am going to do everything i can to find out what is causing that problem and i am going to fix it. those are good people. they want to sell your cars. they are doing this fix. in my opinion, it is a sham. they are not fixing it. they are making it feel better.

they are shortening the pedal about an inch and a half and putting this sham so that it feels -- putting this shim, so that it feels differently. unless it is a floor mat issue, which in some cases it may be, you are not solving the problem that mrs. smith had a. she did not have a floor mat problem. smith had. she didn't have a floor mat problem. so, again, why don't you get that car? it's still in existence. check it out. tear it apart. do whatever -- and do it with witnesses that are credible because my guess is you have really, really smart engineers. >> yes, sir. >> hopefully they'll shoot straight with you and whatever the issue is, it is, you know, i'm an engineer. engineers are trained. we identify the problem, develop an opt mall solution, implement

the solution. you probably can solve this problem if you really tried to. >> well, in terms of going out and seeing what the situation is, we -- today we have two engineering centers here within the u.s. with about 80 engineers. we're adding three more of those. because our goal is on any unintended acceleration is to be able to contact the customer -- >> why won't you get that car and check it out? >> that's what i'm saying. the goal is with these added centers and added engineers is within 24 hours we want to be at that vehicle and we will inform them of the situations if they'd like to join us. they have joined us in some of the cases in the past. so we can get that car and see exactly what is going on. >> but if you got mrs. smith's car -- >> the smith car, i have written down to find out what happened with that. i have to tell you -- >> again, my time expired. if i'm ceo and i have the

authority, as soon as i walk out of this hearing, i pick up the phone and i say get that car. if i have to pay $100,000, get that car, put the best engineers on it. let's tear the damn thing apart and find out what's happening to it. because can you do all this other stuff. but if you don't go where the problem is, you know, you're probably never going to figure out what's going on. >> i can tell you listening to mrs. smith, i'm embarrassed for what happened. and we are going to go down and talk to them and get that car so that they feel satisfied. i want her and her husband to feel safe about driving our products. i was embarrassed to hear the story. >> well, my time expired. we want -- i mean we're happy -- you know, i have a gm assembly plant in my district. so i've got a good relationship with general motors. i have a toyota subassembly

vendor plant in my district that makes component parts for toyota. so i'm not on any -- i want the truth. and i want whether my constituency wants to buy a gm product or a toyota product or any other product in the automotive sector to feel those products are safe -- period. and i have confidence in your engineering department. you can solve it if your legal department will let you solve it. thank you, mr. chairman. >> mr. dingle waived the opening statement and waived questioning the last witness. i'll give him leeway with this potential. >> i thank you for your courtesy. mr. lentz, please tell me the date that toyota first heard of incidents of sudden acceleration in its vehicles sold in the u.s. >> i don't know the answer to that. >> please submit that to the record. now, mr. lentz, please tell me

the date on which toyota commenced the first recall to address this problem in the united states. >> if i don't know the answer to the first one, i don't know the answer to the second one. >> please submit that for the record. i had heard that the first notice of it in the u.s. was in november. and that your first notice of it in europe was in may. is that correct? >> i -- >> yes or no? >> i'm sorry, i thought when you talked about sudden acceleration. >> i'm talking about sudden acceleration. >> but in november -- sudden acceleration has been around in the industry for 15, 20 years. >> all right. i just want an answer, not a speech. now, since 200 1shgs how many complaints of sudden unintended acceleration in vehicles sold in the united states has toyota border sales usa received? >> i don't know that number. >> please submit that for the record. how many of these complaints has

toyota motor sales usa forwarded to nitsa? >> i don't know that number. >> please submit that for the record. mr. lentz, yes or no. prior to the u.s. recalls, were you empowered to authorize recalls for toyota products manufactured or sold in the united states? >> no. >> who was responsible for that? >> japan is responsible. >> japan is responsible. now, mr. lentz, yes or no, is it true that toyota recall process for vehicles manufactured and/or sold in the united states requires the decisions concerning these recalls to be made in japan or with japanese oversight? >> yes. >> mr. lentz, yes or no, is it true that toyota had not reached a decision about whether to recall vehicle models linked to sudden unintended acceleration

prior to being visited by acting nhtsa administrator ron medford in december 2009? yes or no? >> i think you have to be more specific about is that the floor mat recall issue or is that the sticking pedal issue? >> well, apply it to both. >> okay. in the case of the sticking pedal issue, i know mr. medford went to japan. i can't tell you specifically if that is the reason. obviously, they were clear with us that we were going to do something with those vehicles. >> and you had not previously until that time done anything? >> in the case of the sticky pedal situation, we first -- i first knew about that in november of 2009. we had reports of three vehicles -- >> and he went there in december of 2009. >> correct. >> had you done anything about a

recall prior to that time? >> no, sir. it was still under investigation. >> all right. now, mr. lentz, yes or no, did acting administrator medford's december 2009 visit to japan in discussions with toyota executives have any influence on the decision to recall vehicle models linked to the sudden unintended acceleration problem? >> again, if we were speaking of the sticking pedal, i don't know specifically. i was not in the meeting. i would think it probably did. >> in correspondence addressed to this committee, certain officials communicated their concern that the united states government's financial stake in chrysler and general motors represents a conflict of interest that may be influencing its regulation of toyota. if that is true, i am outraged. do you believe that that statement is true or not? >> i don't believe that's true. i think the government's acting

fairly. >> thank you. now, mr. lentz, yes or no, is the early warning of possible defects different in japan than in the united states? >> i'm not familiar with the process in japan. >> you would submit that for the record, please? mr. lentz, are the japanese requirements in regard to this matter more or less stringent than american standards? >> again, my responsibility is the united states. i don't know the standards for japan. >> now, mr. lentz, if the japanese requirements are less stringent, does that affect how toyota evaluates potential defects in its vehicles and influence what information the company provides to u.s. regulators? yes or no? >> i would think not. the decision to make a recall in the united states is based on our experience in the united states. >> yes or no. has toyota definitively ruled

out nonmechanical failures as the source of sudden unintended acceleration in vehicles recalled in late 2009 and early 2010? >> we never rule out anything that could cause sudden unintended -- >> so you would not rule that out? >> we are vigilant and continue to look for causes. >> has toyota definitively determined that electromagnetic interference or other failures in electronic throttle controls are the cause of sudden unintended acceleration in the vehicles recalled in 2009 and early 2010, yes or no? >> we are studying through the exponent study that you have now which was preliminary. there's a lot more investigation to go on. so it's being looked at as well as there is going to be an advisory board on quality and safety. >> thank you. >> for the united states.

>> i understand from your testimony that toyota has called upon exponent to conduct tests on certain toyota vehicles to determine possible causes of unintended acceleration. that is true, is it not? >> exponent, yes. >> did the report conclude that electromagnetic interference is a potential cause of sudden unintended acceleration, yes or no? >> it has not tested electromagnetic as of yet. >> so they did not test that. so they do not know. >> it has not been tested yet. it is going to be tested. and we'll provide you the final testing when it's available. >> thank you. how many models of toyota vehicles did exponent tests? >> i do not know that. when i was -- >> how many did they not test? >> when i was there, i saw five different models being tested. >> would you please submit the

response to those questions for the record, please? now yes or no? do you feel that this is an adequate sample of vehicles for the purposes of exponent tests? >> if you look at -- >> you say you saw five vehicles. >> if you look at the etcs system, the system from vehicle to vehicle is very, very similar. the throttle body may be a different size but the general architecture of the system is similar. >> mr. lentz, i'm a poor polish lawyer from detroit. would you please tell me yes or no so i can understand it? >> i -- i don't know how to answer that in a yes or no. >> all right. >> i think they are testing multiple vehicles. they're testing the system not particularly how does it work on a camry versus an fj cruiser. >> thank you. now yes or no, are the event data recorders installed in all toyota vehicles sold in the

united states? >> as to have day, no. >> as of today? >> as of today they are not. >> then -- as of today, no. >> they are not in 100% of the vehicles. >> yes or no. would these edrs contain information such as recordings of vehicle component failures that would be useful to investigators in determining the cause of an accident? >> i don't know exactly what they provide. i can tell you they provide information five seconds prior and one second after an accident. i can tell you that by -- >> would you please, mr. lentz, submit to me and for the record the answer to that question? now, can data from, again, yes or no, from these computers be read by computers that are not toyota's?

>> there is only one prototype in the united states today, but we will make available -- >> what percentage of your vehicles that are imported or manufactured here have edr's? >> it is all the vehicles except for -- if i can look at my notes -- >> please submit that for the record. by whom and where could such data from toyota edr's be read in the united states? >> i do not know the answer for that. >> please, mr. lentz, submit that for the record. >> there is one prototype tool in the united states. >> so whoever wanted to look at that would have to look at that prototype? >> i do not know how accurate that tool is. the standard for edr's comes in

september of 2012. >> yes or no -- did nhtsa require toyota in 2006 to conduct a test on electronic throttle components for the 2006 camry? >> would you repeat the question? >> did nhtsa require toyota in 2006 to conduct a test on an electronic throttle component for a 2006 camry? >> i do not know the answer to that. >> please submit the answer for the record. >> if so, did toyota or a third- party conduct the test? >> i do not know the answer. >> if it was conducted by a third party, would you please submit an answer to those questions for the purposes of the record? >> i do not know the answer. but we can get that information

for you. >> mr. lentz, our reports on this kind of inquiry generated by toyota for third parties or by its own internal investigations -- are they submitted to nhtsa? >> i am not sure i understand the question. >> you have the studies being made, in house or by others. the question is are the reports on those studies submitted to nhtsa or not? submitted to nhtsa or not? >> the study that is being done by exponent will be given to public, congress and nhtsa. >> have they done so prior to this time? >> i don't know what specific study you're speaking of. >> i'll let you choose. have any of them been given to nhtsa? or have they not? >> i don't know given, you know,

given my responsibility which is on the sales end of the company, i can't -- >> you have been very gracious and kind with your time. but what i'm trying to figure out is are you responsible for these matters? you don't seem to have the information that i have been questioning for. and i'm curious, you told us that you were responsible for sales. you are responsible for manufacturing? are you responsible for safety? are you responsible for decisions of this sort? are these decisions made elsewhere in japan? >> i am not responsible for manufacturing. i am not responsible for defect or quality decisions. defect decisions, recalls specifically, are, in fact, made in japan. >> mr. chairman, you have been most generous with your time. mr. lentz, i thank you for your courtesy. thank you. >> mr. rush for questions, please. >> thank you, mr. chairman. i see some attendees are who are

sitting in the front row with buttons on that say i am toyota in america. are these some of your employees? >> these are some of the employees from the assembly plant that do a great job. >> i want to commend you on your diversity. i think you have a very diverse workforce. i want to welcome all of your workers here. >> thank you. they're hard-working americans. >> thank you. we've heard some compelling and disturbing testimony from the smiths this morning. and the committee learned over the course of this investigations that mr. and mrs. smith were not alone in their experience with sudden unintended acceleration. and also with their frustrations of dealing with toyota. in fact, toyota received thousands of complaints from its customers about frightening, sudden unintended acceleration incidents. many of these incidents, unlike

the smiths' resulted in serious injuries or even fatalities. i would expect that your company will respond with a sense of urgency and complete a serious investigation on these problems. but let's not exactly what toyota did in the smith's case. one of the most tragic things the committee laerd duriheard d investigation is how dismissive toyota has been on the customer report of sudden unintended acceleration. mr. lentz, just to tell you, i have just received a few moments ago text written to one of my

staff members. from my district in chicago. and i'm going to try to pull it up. it says here -- it's from one of the executives at a local newspaper in the chicago area. and it says stephanie, if representative rush wants to put a face to this toyota mess, my sister-in-law died december 28th in a car incident near dallas, texas. she and three others were riding in a toyota avalon when it left the road, hit a tree, flipped in the air and landed up side down in a pond. everyone died. police said there were no evidence of any braking, given

rise to the idea that it was an accelerator problem. my sister-in-law, sharon love ransom, was a senior executive with ibm. this is another indication. you've indicated to this committee this morning or this afternoon that you will retrieve the smith's car. would it be asking you too much to look into this matter and if possible, retrieve the car involved in this accident? >> if it's the accident that i'm thinking of, and we can have our staff check, both toyota engineers and nhtsa did, in fact, inspect that vehicle. >> do you know what they determined? >> i don't know what was determined. my understanding -- >> would you check into this? >> yes. we'll check into it. >> has there been any issue with

avalon brand? >> there have been cases of both sticking pedals as well as floor mat entrapments, yes. >> mr. lentz, do you have any reason to believe that out of the thousands upon thousands of complaints that toyota or lexus owners are inventing these terrifying stories about their driving experiences? >> no. but from an engineering standpoint, it's critical that we get information so that we can go and investigate. today, in many cases, information that is submitted on the website, unless there is an investigation open, we don't have the name of the customer or the full vin number. i think going forward, one thing that we should think about doing is make that available to the manufacturers so we can cross

reference that against our data bases and we can investigate these much sooner and not have to wait for an investigation to be open to be able to do that. >> from a marketing perspective, don't you feel as though toyota and yourself, don't you feel as though you owe your customers who some have gone through some serious injuries a lot of hurt and pain, don't you feel as though you owe them a sincere apology for your company, your vehicles, your product causing them sincere pain? can't you just apologize? >> yes, sir. yes, sir, we have. because i will tell you, and whether it is an accident, an injury, i mean we heard the smiths today. you didn't have to have a death to understand the terror that

she had from that accident. i mean that's a terrible thing to have to put one of our customers through. and it doesn't even have to be an accident. we have apologized to our consumers just for the concern that we have given them with their current recall vehicles. we are sincerely sorry for that concern and anxiety we put people through. i mean myself, my wife drives a toyota prius. it's a recalled vehicle. my son drives a prius. it's a recalled vehicle. my mother-in-law is in an es 2006. my father has a sequoia. they're recalled vehicles. you know, i want to make sure that my loved ones are safe as well. >> from a -- switching back over to the engineering, but you still have been pretty evasive here about the cause, the actual

cause of all this pain and suffering. there is a lot of inconsistencies and a lot of angles you're operating from. i'm not sure if the apology -- what is it based on? is it sincere? is this really a problem from an engineering perspective that you are assuming responsibility for? >> any time there is one death in one of our vehicles, that pains us to have that take place. regardless of how it happens. but it's critical today. and we weren't doing a good job in the past of investigating those quickly enough, especially when it had to do with unintended acceleration. and with adding these new engineers, these s.w.a.t. teams that we're going to be able to get on site as rapidly as we can, our goal is to make it in

24 hours. we need to be able to do that so we can understand what's happening and make the necessary changes so that it doesn't happen again. i can tell you i lost a brother in an accident a week after his 30th birthday. and that was 20-some years ago. and there's not a day that goes by that i don't think of that. so i know what these families go through. >> thank you, mr. rush. >> thank you, mr. chairman. mr. lentz, it seems to me that toyota got the first recall in 2000 when the british ordered a lexus recall due to acceleration problem. they got a second alarm in 2003 with the canadian recall.

toyota is a global corporation. those two alarm bells should have sent your engineers scrambling to figure out what was wrong and what was needed to be done to fix the problems. instead, the same types of problems cropped up in additional toyota models resulting in the recalls that bring you here today. so instead of deploying your everything nears after toyota got those early warnings in 2000 and 2003, they waited until problems cropped up in the united states and then toyota deployed lawyers and lobbyists to convince the department of transportation that this was a small floor mat issue and not something more serious. and that, mr. lentz, has done a disservice to toyota's kists and

u customers and ultimately to toyota's dealers and employees. so according to documents obtained by my office, toyota recalled a lexus in the united kingdom in 2000 and a sellica in canada in 2003 because of floor mats were entrapping the accelerator pedal and the exact same problem that has caused fatalities in this country. why didn't toyota take immediate action to prevent the much later accidents that toyota clearly knew the problem existed as far back as 2000? >> specifically on those two incidenc incidences, i can't tell you the specifics of those. i do not know. but i can tell you that a weakness in our system has been within this company we didn't do a very good job of sharing information across the globe.

most of the information was one way. it would flow from the regional market in the united states and europe and back to japan. >> notwithstanding the problems -- in canada, in the united states -- the information goes back to exporters in tokyo, and whether or not you in america are instructed to fix the problem is not in your hands. is that what you are saying? >> correct. but that is changing. there -- there are going to be a number of groups set up. >> that is an important change. it obviously is a policy that i am sure all americans are shocked to learn existed -- that is, that this system of quality

control in toyota, where rep should be at the heart of their corporation, was not something shared about defects with problems in the united states that were discovered in other countries. that is unacceptable to the consumers here in america. let me move forward quickly. / / . . the mat problems were the only problems. and you fixed them. you said today that you have only just begun to test whether or not the electronics are the problem and that you acknowledged that you can't rule out that possibility. so the reality is you don't know what is causing all the vehicles to suddenly accelerate. and you don't know if you've solved the problem, do you? solved the problem, do you? >> there are many, many causes.

in terms of the recalled vehicles -- >> but you don't know if you solved the problem? >> i don't think anyone, any manufacturer knows 100% exactly what is causing it. because if we did -- >> what i'm saying since you're only beginning the investigation, you don't know if you've solved the problem, is that correct? >> etcs has been looked at in the past in japan as they develop the products. but -- >> you said you had solved the problem. the truth is you don't know if you have solved the problem. isn't that correct? >> let me clarify my statement. in terms of solving the issues of those recalls, we solved the problem. and if in documents that we have also sent you, when i did a number of interviews with journalists, i made it quite clear that my feeling is -- and this is a quote -- my feeling is these two fixes solve the issues

that we know of. are we going to remain vigilant? of course we will. but we are confident that entrapment is a cause. we are confident that the pedal issue is a cause. and we are confident in those two fixes. but we are also confident that from what we know today it is not an electronics issue. >> what you know today, but, again, you're only at the beginning of your investigation. so you don't know what caused the problem, do you? >> we have not seen failures in the etcs and we have -- this isn't the first time etcs has been looked at. it is the first time that we've gone to exponent to look at it. when we put in our quality north american advisory board, they will have total independent control of a another study of their choosing. now that's going to take place. that committee is going to be in place by the end of march. so there's going to be another study soon right after this. >> and is the same thing true

for the problem with the electronic throttle control system in your vehicles? do you know what's wrong there? >> that's what i'm talking about. the etc is electronic control, sorry. >> you don't know what is wrong there either? >> again, we have not seen failures. it has been looked at in japan in the past. >> if there is no possible problem with your electronic throttle control systems, why do you need to find a way to override the electronic throttle if there is no problem? why do you have to find a way to override it? >> you always have to keep your eyes and ears open. in the event there is something. >> you can't have it both ways. you can't say there's no problem but you're trying to find a way to override something that's not a problem. it leaves people with the impression that there must be a problem. >> but that's why you have to continual test and test and test in the event that something develops. it could be -- it could be a change in the emi. it could be a number of

different things that we have to continual test and verify. >> i appreciate that. but i just wish that there was a little bit more humility here with regard to what you don't know, that you just say you don't know and then the public as they're driving around carries that kind of cautionary warning with them as they're driving pending the completion of all of your studies. thank you, mr. chairman, very much. >> thank you. next for questions we go to miss beget. >> thank you, mr. lentz. i probably hold the record among the committee members because i have three camrys. so i'm very, very concerned that we get this right just like you are for your family. i want to ask you a couple questions. the first one is you just told mr. marky that this is not the first time that you folks have looked at the etcs.

and you folks provided a number of documents in response to our february 2nd, 2010, request. have you, as far as you know, has toyota provided all of the documents relating to previous tests of the etcs? >> again, i can't tell you. it's a test or just development cycle. >> well, i -- i understand -- i mean we know that you've provided thousands of pages of documents relating to the development. what we want to know is are there additional documents relating to the testing of the etcs that you just testified that you folks, that it's not the first time you looked at it. and have we received all the documents relating to previous testing of the etcs? because that's what we care about here. >> i understand. i'll have to check. i don't know specifically. >> okay. if there are additional documents, will you provide those, please, to this committee? >> of course. >> now the only document that

toyota has produced to us that we have seen that claims to address the phenomenon of sudden unintended acceleration is this february 2010 report that we've been talking about that was conducted by exponent. my first question is that report was commissioned in december 2009, two months ago by toyota's defense attorney, correct? >> yes, i believe so. >> and how much money was paid -- i know mr. boyer would want to know the answer to this question. how much money was paid to e exponent? >> you would mind supplementing your response with that information? was it over $1,800 as far as you know? >> i am sure. >> i am sure it is, too. >> my understanding is we have given them an unlimited budget to test as much as they can to find out about that. >> and i'm glad you have.

but i don't -- i mean you just as you wouldn't question efficacy of what the previous witness testified to because he was paid a few thousand dollars. >> right. >> you wouldn't think that that would taint the scientific results of your experts either, would you? >> well, and that's why we have an advisory board -- >> yes or no is a good answer for me. >> i can understand why you would feel that way. >> i mean you wouldn't think that your people would be tainted any more than the last witness would. >> no. >> by being paid some kind of a money, correct? >> no. >> thank you. let me ask you this. let me ask you this. the exponent report was considered to be an interim report, correct? so they're still conducting tests. >> correct. >> is that right? okay. will you provide the committee with the final test results when they are obtained? >> yes, we're going to make that public. >> whether do you expect that to happen? >> i don't know. >> now it's my understanding

that toyota's counsel who is sitting right behind you told committee staff today that toyota had, in fact, replicated dr. gilbert's tests. and that toyota was able to produce the same conditions without triggering an error. is that correct? >> yes. >> when did exponent do that test? >> the wee hours of the night last night. >> so this is new information for us? >> yes. >> i'm assuming toyota will be willing to shart results of that testing also with this committee, correct? >> yes, we will. >> now, in your opening statement, you said that toyota had done extensive testing of electronics and found no issues. do you wish to change or clarify this remark in light of the findings disclosed to the committee today? >> again, i'm relying on the

information from japan that they told me they have done testing. i have not seen it myself. i have not seen test results. i'm relying on their information to me that they have tested it extensively. >> okay. in light of the new revelations revealed by your attorney mr. hester that exponent was able to replicate the same conditions as dr. gilbert last night. dr. gilbert last night. does that change your testimony> know exactly how mr. gilbert has done this. >> are you disagreeing with xpoen snent. >> no, i'm not sure what mr. gilbert has done is necessarily something that is real world that can happen. and i can also tell you that exponent was also able to do this on a competitive vehicle

with the same result. so this is not unique to toyota. >> okay. now i have one last question for you. i would assume, in light of the questions raised by dr. gilbert's testimony today as well as the witnesses, mr. and mrs. smith, and we have a lot moran he c more anecdotal information. i'm going to assume that toyota is going to take this seriously, that they're not going to deny that these acceleration issues could be happening because of the etcs and that they're going to expeditiously investigate this and going to provide the results of this committee. >> yes. >> is that a fair statement of your intention? >> yes. >> i look forward to hearing from you. thank you. >> thank you. >> thank you. mr. doyle for questions. >> thank you, mr. chairman.

welcome. thank you for all the questions you've answered. so you heard the testimony of the first panel and dr. gilbert sounds like a pretty reasonable guy. and you just found out that your testing company was able to duplicate what he did. doesn't it make a whole bunch of sense, and i think that joe barton said the same thing that, you guys talked to dr. gilbert when the shearing over, probably offer him more than $1800 and ask him to come down to toyota or with exponent and the three of you sit together and see if there's something -- what's the down side to testing this gentleman's theory out? >> there's no down side. that's why i don't want to down play what he has done. again, i'm not sure about his testing paradigm. but we welcome anyone that can find any issues with our electronics. i mean if there is a problem, we

want to find it and we want to fix it. so, yeah, there's no problem with that. >> it's in your best interest to find -- no one has more to lose than you and your employees and dealers to not fix this problem. i mean you should have every incentive. i believe you do want to fix the problem. i mean this is -- your company has a very good reputation. it's been put into question. and you know perception is reality. if the public thinks that your car isn't safe, you need to go out of your way to prove that it is. >> yes, sir. >> and so i just -- i just think, you know, before you leave washington you ought to get this guy's phone number and he should be sitting down with your people and you ought to test his paradigm and see whether it has any merit. >> and what's important is when i was at exponent, i drove a vehicle as they did the test to short circuit the accelerator pedal. and so i had the sense and the

feel of what happens when it gets in the limp mode, how they can measure what happened. and that's why i just have to really understand as does exponent what mr. gilbert did. because my understanding is we were splicing wires together. >> okay. yeah, and if i were you, i'd want to know what he dshgs too. there's no good outcome from you not trying to get this problem fixed. it's not good for america. it's not good for all the people that work for your company here in this country. and all the people that drive your cars for you not to go the extra mile and test any theory that seems to have any merit to it. >> i agree 100%. and that's also why going forward any time we have a reported incident of ua, we're going to send a s.w.a.t. team out there, the goal is within 24 hours, so we can learn as much as we can. that is why it is also helpful if we could get full vin numbers. sometimes they get a complaint we don't ever receive.

and the current thing, unless an investigation opened up, we can't get that information. it would really be helpful, for the entire industry, not just us. >> okay. mr. chairman, in the interest of time, i'm going to yield back. >> thank you, mr. doyle. miss christianson for questions. >> thank you, mr. chairman. and i want to take this opportunity to welcome the dealers and the workers in the audience and recognize that they were here when i made my opening statement. but i did say at the time that we want this toyota to really fix t mr. lentz, how long have you been in your position? >> since july, 2006. i was the president, then president coo, basically with the same responsibility. >> i read an article about a week and a half ago that was talking about the history that toyota has in not responding to

complaints. it started out by saying that in the late 1980's, toyota was actually -- would actually go to a customer's home and say, your car has a problem, pick it up, take it and fix it. by the late 1990's and beyond that, toyota decided that fixing problems -- they would not even tell customers about the problems. then we had the failures that have brought us here today. it is a culture shift over that time. and you tell us what happened? what happened to the toyota of the 1980's to bring us to the toyota of 2010? >> one comment before that -- there are dealers that still make house calls. my father, who lives in colorado, his son lives about 3 miles or 4 miles away. every time he needs service, the

sales man picks up his car and takes it in for service. it still happens. we are not totally out of the 1980's yet. i think what happened -- i think we lost sight of the customer. i think we -- i do not think it was a goal for us to grow faster, but we did. we had a lot of customers that loved our product. our loyalty rates were growing higher and higher and our volume grow. the complexity of the product line grew from the number of models and engines and transmissions to everything else that goes with it. with it. and i think we outgrew our engineering resource. and i think when that happens -- and we had strategies to deal with that. but the strategies didn't work. and i think as a result of that,

we're suffering from that today. i think -- i think the most important thing is we lost sight of our customers. and i'll give you an example even in the floor mat issue. in the very beginning back in 2007, we recalled vehicles because of the all weather mat. the mat was too thick and there was risk it would bind up underneath the accelerator pedal. it would happen if the mat wasn't properly put down. so from an engineering standpoint, if the mat is properly in place, it's no big problem. but we didn't understand a simple thing like how customers use a floor mat because in climates like this, people double stack mats. they put the rubber mat on top of the carpet mat. not just in our cars but others. we didn't understand something as simple as that. >> and just to get one other question in, you know, i'm really disturbed by what sounded like a real snap diagnosis.

i'm a physician in the case of the mats. when we're presented with a problem, we can welcome diagnose it by listening to history but we always look at every other possible cause before we really make a diagnosis and we start to treat. and, you know, that doesn't sound like it happened here. and in your business and my profession, lives depend on the decisions that we make. and it's really important to really examine all of the possible things, rule out for every other possibility. can ayou assure me -- i hear yo saying it's not that electronic thing. can you assure us today that not only with this but with every complaint that you're going to do a complete diagnosis? >> yes. i can tell you that the company's process is from top to bottom are being evaluated. and starting with the president of the company who is going to

speak tomorrow to one of the committees. he is responsible for global quality committee. it's a brand new committee that is going to look just at quality and safety. and there are representatives from each of the large regions around the world that are on that. there is an independent advisory board that will report to that. to look over his shoulder -- >> what independent advisory board. we talk about people paying and stuff. how do you get this independent -- >> you go out and hire safety and quality experts from outside of the company to oversee what's happening to make sure that we're doing the right thing. and that's -- the north american region of that and these committees are going to be announced by the end of march. they are going to be responsible for an independent, >> the committee also heard from rhonda smith to had problems

with her car. this portion is 15 minutes. her. >> sure. just pull it closer. >> is that better? >> try that. >> yes. >> my name is rhonda smith and this is my husband of 38 years, eddie smith. i'm a retired social worker with the state of tennessee and eddie is a senior vice president at a bank in sevierville, tennessee. i'm truly thankful to be here today and i feel i'm speaking on behalf of those who have lost their lives needlessly, unnecessarily and i would like to share an incident with you concerning sua that i experienced october 12th, 2006, and our new lexus es 350. this car had 2,728 miles on it when the incident occurred. the vehicle had a keyless push button ignition and required a key fob to be present inside the car in order for it to start. on that thursday, october 12th,

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

speeds to over 100 miles per hour down the interstate. i place both feet on the brake after i firmly engaged the emergency brake and nothing slows the car. i figured the car was going to go its maximum speed and i was going to have to put the car into the upcoming guardrail in order to prevent killing anyone else and i prayed for god to help me. i called my husband on the blue tooth phone system. i knew -- i'm sorry. i knew he would not help me, but i wanted to hear his voice for a time. after six miles, god intervened as the car came very slowly to a stop. i pulled it to the left median.

with the car stopped, and both feet still on the brake, the motor still revved up and down at 35 miles an hour. it would not shut off. finally at 33 miles per hour i was able to turn the engine off. after my husband arrived he found nothing unusual about the accelerator or the floor mats. but the strange thing was that the dash lights and the radio were still on. after the wrecker arrived, we gave the vehicle fob to the wrecker driver. when he hooked the car and prepared to winch it on to the rowback, he asked my husband to put the car in neutral so he could start the winch. the drive wears standing 20 to 25 feet away at the rollback controls. without thinking, my husband sat down in the car without the key

fob and was able to shift the car into neutral which he shouldn't have been able to do. but when he did that, the car actually tried to start itself. we have a notrized statement from tommy clayton, the wrecker driver, attesting to this. toyota said they would inspect our lexus and contact us. after ten days we still had not received a callback. we called again and got the same assurances. toyota promised us they would look into our complaint several more times over the next few weeks. when we finally forced toyota to respond in writing we received a five-sentence analysis stating and i quote, when properly maintained the brakes will always override the accelerator. well, we know that's a lie. and we were outraged that toyota would suggest in that statement also that the brakes had to not properly be maintained in order

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

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

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

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

greedy. and shame on you, nhtsa, for not doing your job. it is our hope that this testimony will help all of toyota's customers in a way that toyota has not yet done to this day. once again i'd like to thank this committee for taking the time to listen to our story. it's about time we were heard. and hypothope that toyota and >> thank you, mrs. smith. mr. smith, your opening statement. pull the microphone up. >> good evening. i would also like to think -- thank the honorable members of this committee for inviting us to testify today ensure our sudden unintended acceleration experience.

i am the husband of the woman you just heard. we purchased this 2000 lexus because of toyota's exemplary claims of safety. we have young grandchildren. it has been a true experience to try to decide what to say today. you heard my wife describes her experience. listening to what you think are the last words you'll ever hear her speak and imagining the debt of your lifelong best friend and spouse and being unable to do anything about it. besides being at terrorizing and traumatizing experience, it was frightening and heart wrenching. she was aired by the grace of god and is still by my side today -- she was spirited by the grace of god and is still by my side today. we have been on a mission to get

this injustice noticed, address, and fixed. toyota was informed of this potentially deadly problem in 2006 and was warned by us numerous times that lives would be lost if this was left unattended. we found -- phoned, ema hoi polloiiled, -- emailed and wrote letters. we received as rhonda said was a statement from toyota stating if properly maintained the brakes would always override accelerations. they called us liars. next toyota pushed us to arbitration with the national center for dispute settlement. this was one of the biggest wastes of my time and my wife's time and money we have ever seen. it was a complete setup trying to make us go away and we

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

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

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

to toyota, i say your quality and safety record has been totally destroyed by your past and present words and actions. now your integrity has come into play. how are you going to handle this? we're here today to help see that you don't shove the american people under the rug again, and that your true colors are finally revealed. to nhtsa, i feel you have totally failed the american public and ióó, >> on wednesday, toyota ceo and president akio toyoda, and the president of the north american division, testified about the recall. this portion is about an hour and 45 minutes.

our second panel -- i would like to introduce our second panel. testifying on this panel, mr. akio toyoda, president and ceo of toyota motor corporation. and mr. anaba, president and ceo of toyota motors north america. gentlemen, it is the committee's longstanding policy that all witnesses are sworn in. please stand and raise your right hand as i administer the

oath. do you solemnly swear to tell the truth, the whole truth and nothing but the truth? if so, answer in the affirmative. let the record reflect the witnesses and r answ witnesses answered in the affirmative. you may be seated. let me begin by first welcoming you, and i really appreciate the fact that you have come to testify and that, mr. toyoda, that you actually volunteered to come and to testify. i want you to know we're very impressed with that. that shows your commitment, of course, to safety as well, and we want to appreciate the fact that you volunteered to come. mr. naba, we welcome you here as well, and we've had conversations with you over the past few weeks and months.

so at this time, we would ask you to -- actually, we will give you additional time. we generally give five minutes, but being he is all the way from japan, we'll give him more time. so mr. toyoda. yes, you may begin. >> his microphone. >> thank you, chairman towns. i'm akio toyoda of toyota motor corporation. i'd first like to state i love cars as much as anyone. i love toyota as much as anyone. i'm here with my toyota family of dealers, team members and friends.

i take the most pleasure in offering a vehicle that our customers love, and i know that the 200,000 team members and dealers across america feel the same way. however, in the past few months, our customers have started to feel uncertain about the safety of toyota's vehicle, and i take full responsibility for that. today, i would like to explain to the american people, as well as our customers in the u.s. and around the world how seriously toyota takes the quality. >> mr. toyoda, could you just pull the mike a little closer to you? thank you. >> today i would like to explain to the american people as well as our customers in the u.s. and around the world how seriously

toyoda takes the quality and safety of its vehicle. i would like to express my appreciation to chairman towns and ranking member isa as well as the members of the house oversight and government reform committee for giving me this opportunity to express my thoughts today. i would like to focus my comments on three topics. toyota's basic philosophy regarding quality control, the cause of the recalls, and how we will manage quality control going forward. first, i want to discuss the philosophy of toyota's quality control. i myself, as well as toyota, am not perfect. at times we do find defects, but in such situations, we always

stop, try to understand the problem and make changes to improve further. in the name of the company, it's longstanding tradition and pride. we never run away from our problems or pretend we don't notice them. by making continuous improvements, we aim to continue offering even better products for society. that is the core value we have kept close to our hearts since the founding days of the company. at toyota, we believe the key to making quality products is to develop quality people. each employee thinks about what he or she should do, continuously making improvements, and by doing so makes even better cars. we have been actively engaged in

developing people who share and can execute on this core value. it has been over 50 years since we began selling in this great country, and over 25 years since we started production here. and in the process, we have been able to share this core value with the 200,000 people at toyota operation, dealers and suppliers in this country. that is what i am most proud of. second, i would like to discuss what caused the recall issues we are facing now. toyota has, for the past few years, been expanding its business rapidly. quite frankly, i fear the pace at which we have grown may have been too quick. i would like to point out here

that toyota's priority has traditionally been the following. fir first, safety; second, quality; third, volume. these priorities became confused and we are not able to stop, think and make improvements as much as we were able to before, and a basic stance to listen to customers' voice to make better products has weakened somewhat. we pursued gross speed at which we were able to deliver to our people and organization and we should sincerely be mindful of that. i regret that this has resulted in the safety issue described in the recalls we face today, and i am deeply sorry for any accident that toyota drivers have

experienced. especially i would like to extend my condolences to the members of the saylor family for the accident in san diego. i would like to send my prayers again, and i will do everything in my power to ensure that such a tragedy never happens again. since last june, when i took office, i have certainly placed the highest i am the grandson of the founder and all of the toyota vehicles bear my name. when the cars are damaged, i am as well. i, more than anyone, wish for the cars to be safe and for our customers to feel safe when they use our vehicles.

under our leadership, i would like to reaffirm our values of placing safety over quality -- the safety and quality as the highest of priorities since we were founded. we will have a system in which we can execute what we value. third, i would like to discuss how we plan to manage quality- control as we go forward. up to now, any decisions on conducting recalls have been made by the customer quality engineer division in japan. this division confirms whether there are technical problems and makes decisions for the necessity of a recall. however, reflecting on the issues today, from the customer perspective. to make improvements on this, we

will do the following changes to the recall decision making process. when recall decisions are made, a step will be added to the process to ensure that management will make responsible decisions from the perspective of customer safety first. to do that, we are devising a system in which customers have a voice around the world to reach our management in a timely manner. we can assist them with zero who will be able to make decisions as necessary. we will use respected experts around the world to ensure that we did not make misguided decisions. finally, we will invest heavily in quality in the u.s., through the establishment of an

automobile center of excellence. product safety objectives and the sharing of intermission and responsibility. of new divisions. sharing of more information and responsibility within the company for product quality decisions, including defects and recalls. even more importantly, i would ensure the members of the management team actually drive the cars and that they check for themselves where the problem lies as well as its severity. i myself am a trained test driver. as a professional, i am able to check a problem in a car and can understand how severe the safety concern is in a car. i drove the vehicle in the accelerator pedal recall in the

prius, comparing the vehicles and decided the remedy was the settings. i believe that only by looking at the product by sight can you make decisions. you cannot decide by a report or a meeting room. whatever results we obtain from the investigation we are conducting in cooperation with ntsa, i intend to further improve on the quality of toyota vehicles and fulfill the principle of putting the customer first. my name is on every car. you have my personal commitment that toyota will work vigorously and quickly to restore the trust from our customers. thank you.

>> thank you very much, mr. toyoda. mr. anaba? >> chairman towns, mr. issa, members of the committee. thank you for inviting me to testify today. my name is yashima inaba, and i'm the president and ceo of toyota north america and chairman and ceo of toyota motor sales usa. as you heard today from the toyota president, akio toyoda, and as the subcommittee of oversight investigation heard yesterday from jim lentz, president and chief operating officer of toyota sales usa, toyota is taking decisive steps to restore the trust of the tens of millions of americans who purchase and drive our vehicles. our 172 team members and dealers

across north america are making extraordinary efforts to complete our kurncurrent recall quickly and convenient as possible. we have rigorously tested our solutions and are confident that with these repairs, the toyota vehicle will remain among the safest on the road today. we also are going further by installing advance brake override systems in all of our new north american vehicles before the end of 2010, and in an expanded range of existing models as a customer confidence measure and taking comprehensive steps to ensure strict quality control and increased responsiveness to our customers and regulators in the future. as you have heard, mr. toyoda is

leading a top to bottom review of our global quality control processes and will seek input from independent safety experts to ensure that our processes meet or exceed industry standards. as head of toyota north american operation, i will be closely involved in this review, working with a new chief quality control officer for north america. i will also take responsibility for ensuring we improve our dialogue with safety regulators and that we take prompt action on any issue we identify to ensure the safety of american drivers. in inviting me to testify today, the committee asked me to address several issues with regard to our recent recalls. let me summarize my answers

here. our recent recalls addressed five separate issues that we have identified with certain toyota vehicles. in total, some 5.3 million vehicles across 14 models are affected by one or more of these recalls in the united states. the biggest recalls are for solutions our engineers have developed with regard to two specific mechanical causes of unintended acceleration. one involves inappropriate accessory floormats that when loose or improperly fitted can then trap the accelerator pedal. the other concerns, accelerator pedals that can, over time, grow sticky in rare instances. the solutions we have come up with for both these instances

are effective and durable. with respect to possible accelerator entrapment by the floormat, toyota recently designed a vehicle-based change that directly addresses the problem and announced a solution to the public in november 2009 as parted of the safety campaign. announced on september 29th, 2009. owners of affected vehicles can, in the meantime, drive safely by ensuring that they use only properly secured, appropriate floormats. with respect to sticking acceleration pedal, a safety recall in the united states in january to address this issue. the sticking condition does not occur suddenly, and if it does, the vehicle can be controlled with firm and steady application of the brakes.

we are confident that vehicles whose drivers are not experiencing any issues with their accelerator pedal are safe to drive and toyota is rapidly completing the repairs on our customers' vehicles. in both these cases, to thoroughly and carefully evaluate technical aspects of these issues, however, we now understand we must think more from our customer's perspective rather than more of a technical perspective in investigating complaints and that we must communicate faster, better and more effectively with our customers and our regulators. our recent recalls of 2010 prius and hybrids braking system,

camry cars to inspect the power hose and certain 2010 tacoma trucks to inspect the front drive shaft all illustrate this new approach. chairman towns, ranking member issa, and members of the committee, i ensure you that nothing matters more to toyota than the safety and reliability of their vehicles our customers drive. we are committed to not only fixing vehicles on the road and ensuring they are safe but to making our new vehicles better and even more reliable through our redoubled focus to putting our customers first. thank you. >> thank you very much. and let me thank both of you for your testimony. let me begin by saying, have you told ntsa everything you know about sudden acceleration

problems? have you told ntsa? >> according . >> translator: according to my understanding -- according to my understanding, we fully shared the information we have with the authorities. >> our washington office has been always in touch with ntsa, and we are fully cooperating with ntsa in any information they require. >> has toyota disclosed all information about other potential safety defects with your vehicles to the regulators? have you done that?

>> translator: i do not know the specifics, however, as i mentioned earlier, i do understand that all the information we have are shared with the authorities. >> let me ask this question. today attorney general andrew cuomo of new york announced an agreement with toyota, and this agreement provides that if a customer might be afraid to drive his or her car subject to a recall, the dealer will pick up their cars, fix them, and return them to the customers.

now, the customer will then be reimbursed for any taxi or rental car expenses that they might incur. will you commit to doing this for customers nationwide? if you want me to repeat it, i will do so. >> it's being translated. >> chairman, let me address that question because i'm local here. >> i'd be delighted. >> i heard a number of instances that when this recall news came out, i think a number of customers who were very afraid

and the dealers took care of customers very well, and in many instances dealers went to pick up their cars and also gave them a toyota rental car for the time that they're not able to drive. and this process we see going on. i think there is a good understanding on the part of the customers that the cars are being fixed well and they are confident about that. >> my question is, are you just >> this is happening all over the world -- a nationwide. >> i want to make certain we have that understanding. i understand this is going on in new york. the last question that i have for you is that -- mr. toyoda, you have offered a break

override feature for some recalled -- brake override feature for some recalled vehicles? why have you not done so for all vehicles? [speaking japanese] -- >> [mr. toyoda speaking japanese] >> tranlastor: -- translator: allow me to explain the situation a little bit. . c c c c c c c c c c c c s,g&

unexpected acceleration.

and of that, the elect >> whenever there is any he system is cut off. and even under a very vigorous testing conducted internally or by ntsa, no problem in malfunction was identified, and, therefore, i am absolutely confident that there is no problem with the design of the etc system.

>> translator: however, placing emphasis upon the fact that customers do have concern as to the possibility of unexpected acceleration which may result from the remaining three reasons, in order to offer extra measure of confidence as the chairman has just mentioned, we decided to add brake override system. >> is that a yes or no? that's what i'm trying to get to, if it's a yes or no. >> translator: i yield to

congressman issa, but i'm trying to find out, is that a yes or a no? >> let me address in a different perspective. we are -- just for the record, we are putting brake override system on all of the models for north america coming off the line by the end of this year. and now probably your question is retroactively. what about the existing models? we have already announced -- >> that's my question. >> -- 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 rate, and add to it 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 it fair to say that although electronics could 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 if that impression that i have is true, that is very troubling. i would like you, as best you can, and i understand the difference in language, to explain whether or not you are giving the american automobile purchaser, your customer, and the american market the same level of attention you get to the japanese market or the european markets, and if you did not in the past, what are you going to do to make sure that difference does not occur in the future? we cannot afford to have a lack 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 does not destroy a great deal of the equity of your company, and i hope you can move beyond this question, but i want to hear in my own mind that there has not been this difference between the home market and the american market, or the home market and european markets. 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 in sharing those cross regional defect information. >> what have you dernld was the cause that you didn't? what was it? is it culture, psychology, something that happened in the communications breakdown? just seems absolutely -- >> whether you go into a certain data base, you can find it. but it is not, i must say, i don't know very well, but

positively shared. now what we're going to do going forward is one of the things i'd like to report to you that we are making now one american we call product safety executive is a part of recall decision making as part of the global committee headed by one japanese, one american and maybe later added from other regions like europe and china. and then in that, all the information is shared there so that we can evaluate and know what's going on in other parts of the world in more transparent way. so this is the change that we are making now. >> let me ask you just a side question. does japan have a torch similar similar to the united states where suit can be brought for damages by these injuries and loss of life?

[ speaking japanese ] >> translator: i believe we do. >> we have a little bit of a contest going on in the united states. we call it tort reform. and it's an argument that my friends on the other side very often use in medical argument field. if you had tort reform and you just allow some people to die or get severely injured without recovery, that would correct things. i think you are making the best argument in the world i've ever heard of why we should have the present tort system. and i hope you recognize what kind of payment for the injuries and the damages suffered by innocent american citizens who like myself have grown up in an

atmosphere that we had a great deal of faith in something that was stamped made in japan, that it was of the highest 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 just yesterday, mr. james lynch iii said something very interesting. basically what he said is that even with the sticky peddle and the format problem, that maybe this may not account for all the problems. he implied that maybe there were some electronic problems taking place. the question becomes, at what point -- and i know also you want to regain the trust of your customer base, but that trust is hard to establish or reestablish when they see over and over again these kinds of

situations and they say why should we believe that things are going to get better? another have been members on this day is to have said that they have had good things that toyota has done, buqiñi others y they have called and have to wait to get their cars repaired, but at the same time they have to take the children to the babysitter, the have to go and &/xlthese are just practical s that are happening. al 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 >> mr. toyoda, welcome to the committee. when did a first come to your attention that there was a problem with the acceleration of your vehicles? [speaking japanese]

>> i was appointed president in july, and there is a major difference between the information i had acquired after becoming president. 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 be some discrepancy. again, we're trying to get at what did we know and when did we know it to sort of gauge the company's -- the quality of the

company's response to the serious problem on behalf of its customers. and obviously, we have an interest as american congressmen and women to protect our constituents who are your customers. and we know that the company certainly was made aware why u.s. officials through nhtsa who flew to tokyo for this express purpose and you're telling 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?

as i stated before, we could have done a much better job, and we are now taking steps to improve it, as i said before. to this specific question of the number of reports we need to initiate the investigation, i think for the unintended acceleration issue, we are committed to take actions in investigating those issues one by one. in other words, once we get the complaints or reports of that issue going forward, the goal is to start an investigation within 24 hours of the information that we received. we are creating many swat teams

to really go into that area. . . y 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 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 country to operate in a certain way.

and, therefore, the first thing we do is to look and see if they are operating according to law. and law here meant, of course, the regulatory agency. i don't know if you do want to respond. but i do want to make it clear. i was pleased to hear that apparently the root from customer complaint to those who can do something about it is one of the reforms you have suggested in your testimony already. and apparently these went astray because they 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 ] >> 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, we are now putting together a structure, world wide, to hear customer complaints from anywhere in the world. we will listen homily and modestly so they will continue to be safe -- hungrilmbilyly and modestly so there will continue to be safe with us.