to long growth rates of gdp. finally, no major types of dislocations would be considered. to do the work, we conducted a number of interviews and surveys with large organizations as well as with consumers or receivers. we spoke with over 50 large organizations which in total represents 14% of the revenues to day and cover 90% of the sectors were sending mail through the system. we reached out to about 3000 through an internet survey. for those that don't have access, we spoke to 200 to understand their perspectives on how they receive mail and how they conduct transactions. paul we leverage our experience in other markets, posts, bits of

outside research that would help to build a projection of what other markets might do. first, we took the mail that was being sent in 2009 and reclassified this into segments that exhibited a common set of behavior is. you can see two columns. under first class, they are things like bills and invoices. they would write a check and send something back in the mail. the business to consumer mail, these are light changes to the terms in your credit card or the privacy statements. bank statements, they send these out and there is nothing sent out on it who receives them. checks are sent through the

mail. you can see standard mail letters, flyers which can be things like supermarket circular, catalogs, postcards and large envelopes. we tried to build a picture of the male and held large the segments were because we wanted to understand how sanders for thinking about the evolution as well as how receivers for thinking about what they did that might defect to the mail volume. first, i will show you a picture of the mail volume in total. first-class mail represents 47% of the mail that was introduced into the postal system in 2009. the lighter blue column is the mail that is generated by consumers.

this is the mail that you might send over the holidays because of your thank you notes. miscellaneous consumer to business, these are letters that a consumer might send to owners organization that they have some association with. when i show the whole picture, consumer generated mail only represents about 10% of the mail that is sent through the postal system general business to business mail, and general business to customer mail, those invoices are at the top. if i add to that, we will see

that we have about 90% that is being sent through the system was business generated. of the standard mail, the largest chunk is advertising letters followed by fires, catalogs, large envelopes, newsletters, catalogs. you can see two in pieces on the right. the first one is magazines. finally, packages which are also small on a volume perspective. we've sent build the projections segment by segment to arrive at the following results. our forecast suggests that all mail will drop from 177 billion pieces to 150 billion pieces.

that represents a 15% drop. we expect that there will be a volume of 50 pieces in 20-50 billion pieces in 2020. that is 837% drop over the time period. there is increasing acceptance of consumers to use an on-line means to conduct transactions and an increasing push to drive this out of their networks. we actually projected that this will remain roughly flat at about 85 billion pieces in 2020. there will be some online version of -- mail.

the volume came from packages. if we look at the implications of the volume projections, we look at the volume in the financial metrics. the day of the pieces that are being delivered to every household on a daily basis will be dropping from four to three over this time. this is driven by the drop in the volume and the growth in the households. from the perspective of the revenue that is being generated

from each of those households, it will actually drop on a real basis driven largely by the shift from first class to standard. i want to show you how it graph of the mail volume unfolds over 10 years. mail volumes from 2000, 213 billion pieces in 2006. what you see on this graph are three lines. the white line represents the interjections based on the views that we gathered and the analysis that we did from speaking with large and midsized sending organizations. the blueline is the volume projection that is generated from speaking with the consumers or the receivers. i will explain why there is a

small difference. finally, the war represents a worst-case scenario. what we did is we looked to europe and we found countries which had a broadband penetration of the internet five years ago which is similar to roughly where the u.s. today. we tried to project how the volumes might unfold. that gives you a lower down to. the worst case might be 120 million pieces. for each one of the segments that i showed it to you before on this chart, we tried to understand all of the factors that would build up the volume

and all of those that would erode the volume. generally speaking, the following all true. organic growth will increase the mail volume. growth in the economy which translates to the number of accounts that a bank might have with its customers, that will actually grow as well. increase in online payment and presenting of bills represents one of the largest thing is deteriorating over time. over the longer term, increasing mobile presented will be a factor. standard mail, some similar factors that will grow the mail, organic growth in the number of households, growth in the

economy. some of the factors that will erode the shift to online alternatives for acquisition male and two on-line alternatives for retention mail. those who you have a relationship with longer send you a notice through regular mail. they might send it through e- mail or by mobil. what does this look like? this is the same chartres. this is the mail volume in first class only.

the sender would like to have this option. there are some that are returned with a check. they would like to get rid of this. we will be getting rid of this in the next three years. many organizations have large programs in place to get rid of this. when you speak with consumers, they would say, they like to conduct their businesses online. there is a feeling that there is a better security.

there is an online access to records. if he wanted to have more records, you have banks give you your records going back. on the standard male side, there is a slightly more divergent view between the standard you. they would project mail volumes to be roughly flat. the sender's you is a bit more pessimistic. this diversion can be explained by the fact that consumers can say that they don't need to get the standard mail.

as far as a multimedia channel strategy to managing the relationship, and looks like sending a piece of physical male looks like the best way to close the deal. the senders have a much more optimistic view of how this would be an important fuel in their portfolio in the years to come. we believe that because of the return on investment is so high that the sender few will prevail. let me show you the full picture. this is the same chart that we showed before but now this is 2020. the most important thing you should take away from this chart is the mixed shift. the first-class mail volume was about 47% of the mail, it is now

about 35%. the standard is 57%. what is mixing the crushing operational. there's no segment that is immune. there is over 50% on a category by category basis. you actually see some categories where the volumes will grow. there are standard mail letters that grew by 18%. that is both because of a rebound in the economy. we have not tried to pinpoint the exact timing but there will be some. this is also driven by a shift from first class letters into

the standard mail letter category. sanders find that they will be able to achieve the same results with their advertising campaign by moving some of virtu a standard mail product. . we help to have this which will help to qualify the burden of the postal service. while all is projected to drop 15%, when we look at the average pieces, we can see this translates into a 26% drop and the pieces per delivery point over the same timeframe. when we look at the real revenue generated by the postal service and stopping at every house every day, it has declined from 2000 to about $1.40 to about a dollar in the year is set to come.

it is a 29% drop over the past 10 years. we wanted them to understand the sensitivity of these. what would it look like a standard mail will increase by 10% or drop by 10%? what with a decrease by 10%? what would you have to believe for that to happen? if standard mail were to increase 10% and first place -- first class or to increase over 150, as opposed to having 85% broadband penetration, you would

have a much more -- lower broadband penetration. you could also believe that on the standard mail sign that the economy would grow much more robustly. what would you have to believe to end at hundred 35 million? you could say that online concerns and target acquisition. the economy might grow more slowly in the next 10 years and has in the recent past.

if you consider more extreme circumstances such as no economic growth, you get a number that is closer to our worst-case scenario. while we stand behind its projection, if there's any risk to this forecast, we believe there is more upside or downside. [applause] >> thank you, good job. that was a rampant

demonstration. the volume projection is not a surprise with anyone. the loss of revenue is one from every door to the $40 every day. this is big news. this confirms the need for aggressive action. with the number of deliveries continuing to grow, the postal service is facing a severe income gap that we absolutely have to close.

there is a level of uncertainty showing a range of possible volumes in the future. this combined it with the changing patterns is with a change in the business model with the right speed and the reallocation no matter where the market takes us. let's keep things in perspective. mail will retain a great deal of value for businesses and agree to the people in increase simply digital world. mail volumes are going to decline and revenue will decline and revenue for delivery will decline in real terms. to address the revenue gap --

>> tamatomorrow, there is the discussion of an amendment to limit government spending. we will have a discussion on the reduction of the authority of the securities and exchange commission. also tomorrow, a memorial service for congressman jack murthjohn murtha who died last . -- for congressman john murtha who died last month. "t.r.t.r. reid has traveled the

world. we will have a three our conversation live sunday at noon eastern. texas held primary elections in the governor's race today. rick perry is projected to win the republican nomination. his main rival was senator kay bailey hutcheson. she conceded the race a short while ago in front of supporters in dallas. >> thank you. we have fought to get their, a

wonderful team. we have brought together a great team. we have fought valiantly for our principles but we did not win. i have called gov. terry and congratulated him on his victory. i want you to know from the bottom of my heart that all of you who came from some many parts of our great state to support me, to vote for me, to volunteer for me, i would not have done it without the incredible grass-roots effort that we have been able to do in this campaign. you posted defense, you drove me around, you flew me around and came to see me on the campaign trail. i would like to especially thank president george and barbara bush. [applause]

it took so much courage and principle for them to come in behind me because they knew me and i love them. vice-president cheynne. [applause] i appreciate their willingness to stand up for someone they knew. i want to thank my campaign chairman, jim francis, our cochairs, my finance chairman and all of the great campaign staff at work so hard on my behalf. i will always appreciate your courageous support and tireless efforts. i would like to single out the farm bureau.

i tell you, if you're ever in the trenches. we in texas know how important agriculture is in our state. bui have worked with the farm bureau throughout my career. there are no more wonderful, oil, down to earth and it people who will stand on principle dramatic consequences and i love you guys. [applause] on the campaign trail, i talked about some of the challenges facing our state. i think it is important that we not overlook our challenges and that we come together to make sure that texas remains what it is today, the greatest state in america. [applause]

i will work with gov. harry and our fellow republicans to keep taxes strong and prosperous for the future. we all must do that. i also congratulate debra medina. she ran a campaign focused on limited government and lower taxes. we had a big turnout in our republican primary, so the competition attracted voters to our party. this will naturally lead some hard feelings but i asked my supporters tonight to join me and unite behind gov. terry. that is what will be best for all of us and for texas. [applause] our party must come together. we must put aside our

differences, we must embrace the new people who have come into our party today and work to elect republican leaders who will lead our state and our nation out of this recession with conservative principles of limited government and fiscal restraint. i thank all of you for working and supporting me for your loyalty. my husband, who has stood beside me and missed a lot of defense because he was helping some much with our home and our children. now, we must unite. we must win texas for republicans and our conservatives had principles. we have both served texas. we love taxes. i will always do everything i can in whatever capacity to protect texas, our values, our principles, and the greatness and the uniqueness that we are.

thank you all from the bottom of my heart. thank you. thank you. [laughter] [applause] [applause] thank you. thank you very much. thank you. thank you. thank you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> kay bailey hutcheson conceding the nomination to incumbent rick perry. moments ago, he spoke in driftwood, texas. >> thank you very much. there are many people that are

the reason i am standing here tonight but there's no one more important and no one that had more to do with that than a beautiful blonde girl that i talked in to marry me. [applause] mcnaught do things like this without someone like her. we have been blessed to have a key fabulous -- has two fabulous children. i want to thank my mom and dad for being here tonight. they taught me some great values. they taught me some of the great texas values that have made at the state so great. i really want to thank all of you for being here tonight to help us celebrate a very important moment in the history

of our party. a little while ago, i took a phone call from senator hutchison. she gave her congratulations and i am greatly appreciative of the very gracious way that she offered the support to us in the upcoming campaign and to unite the party to gegether. . . .

there were a string of victories here lately, of victory in virginia, of victory in massachusetts, and now there has been a victory in texas. [applause] i think the message 30 clear, conservatism has never been stronger than it is today. and we're taking our country back. one vote at all time, won

election at a time. this election was about hard- working texans sending a message to washington -- quit spending all the money! the numbers indicate that a lot of people participated in this election process, and i think that bodes well for our state because it means people are awake and energized, they are aware of the power that they hold in their hands. washington cannot hide the fact that congress hiked the national debt ceiling to $14.30 trillion. they cannot hide from the fact, they cannot conceal that the budget that they are going forward with has a $5 trillion

debt ended. they cannot hide that. voters are aware, the voters are aware of washington's intent to enact laws and regulations that will triple our energy industry and kill jobs particularly in taxes. they are trying to impose national education standards that will reduce the quality of our workforce, negotiate a health care bill that decreases our ability to have good health care and cost millions of >> for the people of this country. today the votes of those citizens were tallied and there was a resounding message that reverberates all the way from texas to washington, d.c.

texas voters said no to washington bureaucrats making decisions that state leaders and citizens should be making for themselves. they said no to legislation that would kill jobs and drive people out of our economy. they said no to a culture of reckless spending that endangers our children's future. however, republican voters did not say no to everything. they said a resounding yes to leadership that controls spending, fights for individual freedom, and the united states constitution. [applause] from driftwood, texas to

washington, d.c., sent out a message tonight, stop messing with texas! stop messing with texas. that message resonates across our state, and i have seen the energy and enthusiasm all across the state in this campaign like i have never seen before in my life. whether you are a fiscal conservative or a tea party patriot or even if your a disk crumpled conservative democrat, we welcome you here today. we're glad that you are in the game and making a difference,

whether you voted for me or one of my very able opponents, i am going to work to unite the republican team to win in november by carrying the cause of limited government, on lawman -- on a limited opportunity, and jobs for texas. -- on limited -- unlimited opportunities, and jobs for texas. there is a land of opportunity in america today and it is called taxes. -- texas. it is strong today, texas as strong today for a few simple reasons that reflect the conservative principles of the majority. we did not spend all the money last legislative session.

that is a simple concept. we sustained a predictable and fair regulatory climate. we reform our legal system where we do not have sitting in the state. and we have an accountable school system. that is not fancy stuff but it is simple stuff and it works. in the months ahead, the challenges we face are very clear. we have to continue to tell the story of our successes here in texas. we have to defend the conservative values that have made them possible and we have to remain attuned to the threat by the federal government that continues to overreach, overextend, and tries to overdraw our children's savings accounts in the future. it is clear that the obama

administration and its allies already have texas in their cross hairs. and i can probably assure you that we're going to get all kinds of special attention in the future. but until washington gets its priorities into order and it retreats to the boundaries that are detailed in the 10th amendment we are going to keep working in the state to sustain an economy here in texas, an economy that is leading the economy, we're going to be able to continue to allow hard- working texans like i have had a great opportunity to visit with all across the state, and there

is no better team of hard- working taxes -- texans than the people i have been working with over this past year. thank you for being here tonight. there is no better place to call home to the lone star state -- and the lone star state. without people, with our shared values and our mutual love of work, we will keep taxes strong with texas values and experienced leadership. i want to leave you with a "from what reagan -- from ronald reagan. he said that the common sense and common decency of ordinary men and women working out their own lives in the runway that that is the heart of american

conservatism today. how right he is! that common sense, that common decency remains the heart of conservatism, not just in texas but in america. so let's sustain that, let sustain it with passion and with energy, the same kind of passion and energy that brought victory to us today. god bless you. may god continue to bless the great state of texas. thank you. >> the house foreign affairs

committee looks into the budget and its effect on national security. that begins at 9:00 a.m. eastern time on c-span3. later, a hearing on the possible repeal of the military don't ask don't tell policy. pentagon officials will testify about allowing homosexuals to serve openly in the military. that gets away at to 30 p.m. eastern time. >> this weekend, former republican president candidate mitt romney in his book "no apology," asserts that america is essential for the world. >> the federal government's response to a toyota's recalls was the summer of a hearing earlier today. we will hear from toyota officials, but first, today's testimony from transfer tiryns

-- trace protection secretary ray lahood and the administration -- and the administrator of the in national highways traffic safety administration. this is about an hour. you for the opportunity to -- for the opportunity to appear. >> thank you. when the american consumers and regulators for not a serious issue like the sudden acceleration issue, toyota executives in america did not seem to have any authority to take action on their own. it all has to go back to japan. that might be a matter of corporate or japanese culture, but it is the fact. it was pretty obvious what the president of toyota north america, mr. jim lentz, said he did not have the power to order recalls in the united states, only japan did.

he told the committee that inside toyota, "information only goes one way." this seems to have been a problem in nhtsa's investigations, too. toyota has not been responsive to their inquiries and does not seemç to take consumer protectn as a mission for nhtsa seriously. that is our impression been talking to your people. secretary lahood, last week, you yourself testified that toyota cannot respond to concerns until you personally called akio toyoda. i assume that is correct >> that is correct. >> it is also true that we had to fly to japan to try to get toyota to take these issues

seriously. to get them to take it seriously. in my opinion, stan needs to be i]çsomeone in the united states that can be held responsible when american consumers are injured or killed due to safety problems in toyota pickles. -- toyota vehicles. . . nissan authorizes recalls, and i wonder if this is a model. several people make the final decision, and one of the three- person is always a u.s.-based

safety executive. >> i think this type of decision making structure might help a foreign company be more effective with safety issues in the united states. what do you think? >> i agree with you. >> more than 2000 americans have told your agency, nhtsa, that they had experienced sudden, unintended acceleration in their cars. there were at least 34 deaths caused by sudden acceleration. is that correct? >> yes, sir. >> and yet we still do not fully understand why this is happening. over the last few years, nhtsa has offered several different explanations. first, they said it was the floor mats. and then they said it was a sticky accelerator pedal. it seems to me that until recently, nhtsa accepted the

explanations. but here's the problem. there are still many cases where drivers accelerated very rapidly and formats and pedals were not involved. we know that there was a problem and we don't know what is causing the problem, but there does seem to a fairly easy way to get drivers the ability to regain control of the vehicles from the sudden acceleration accept it -- episodes, and that is called break-overwrite systems. you can have the accelerator on , and it stops it cold. brake stops a cold. this override feature would help toyota owners control their vehicles during a sudden

acceleration episode, would it not? >> yes, it would. >> and if toyota decides to add this feature to its new vehicles, it is true that other manufacturers adopted it years ago, correct? >> yes. >> it is also my understanding but there are a lot of older toyota -- that there are a lot of older models that are not given this brake override system, correct? >> the testimony said they were going to try to install the system in as many cars as they can. i do not know if it reflects the cars your mentioning, mr. chairman. >> it would have to reflect the early ones. >> it sounded like it would be in as many cars as it possibly could do. >> the question is, does it need to be all of them, and i think that it does.

and my understanding is that the brake override feature is not a costly mechanical fix. it is instructions that program into a car parts computer, correct? >> yes. >> so why doesn't the government make toyota install this feature into vehicles? why didn't they do it years ago? couldn't it have prevented some of the injuries reported over the past few years? why don't we require every manufacturers selling cars in the united states to install this feature? in that it does not only affect toyota vehicles. >> we are looking at the possibility of recommending the system in all manufactured automobiles. >> mr. secretary, my time has run out, and i call now on drinking member of the committee -- ranking member of the committee. oh, he is gone.

ok, then order of questions will be in order of arrival. senator udall. >> thank you, chairman rockefeller. i am wondering about the chart published in the "new york times." in 2004, you had this huge spike in what are being reported as crashes and complaints. 126 toyota drivers experienced a crash and later filed eight complaints -- a complaint. all other manufacturers were on the chart, either flat or going down in terms of complaints. it took us five years to actually do something significant in this case.

and you had another spike in 2007, and here you can see this very, very dramatic spike in 2009. so my question to both secretary lahood and administrator strickland is when you look at this problem, and secretary lahood, you have some independence from this because you are new to it, when you looked in your testimony and mention all of these complaints that come in, it seems to me you should have something in your database that when you get a spike like this, i mean, this just stands out, it alerts people that there is something wrong here, something going on, and immediately and activity started that would have gotten to the bottom of this a lot longer. mr. strickland, let me ask you,

you know, there is one big watchdog out there, and that is nhtsa, and you are administrator. the other watchdog is this committee, the commerce committee, and you have served many years in the commerce committee. so all of your experience going back, what do you see? what is the thing that happened here that we need to get to the bottom of to make sure that this does not ever happen again? please. >> senator, first of all, let me just say, we have contacted the "new york times." that article is inaccurate. it did not mention that nhtsa found no safety defect in early camry models. they claim now that they will post on their website the accurate information, which they left all -- out of the story,

which is unfortunate. people read these things and believe what they read. but we did take it seriously and to interview the owners and we looked at these model vehicles -- we interviewed a owners and looked at these model vehicles -- >> you say it reveals toyota had more complaints involving crashes than any other car maker. >> i will let our administrator comment, but i want you to know that the story was not accurate when it reflected we did not have investigations. we opened two investigations, as a matter of fact. and the website will have the report. i do not know what that means, in fact. >> this chart is revealing in terms of the spikes and what it took to get action. >> that article actually reflects the experience that

nhtsa had at the time. since 2000, there have been can open investigations dealing with sudden acceleration its -- tan open investigations dealing with sudden acceleration -- 10 open investigations dealing with sudden acceleration. if you look at the entire market size of toyota, they were the largest fleet during that period, as well. while they had more sudden acceleration incidents, the comparison to the rest of the fleet was on a remarkable -- unremarkable. they just had more issues because they have more cars. in terms of nhtsa's reaction, that was absolutely appropriate.

we opened investigations. >> my time is almost up. chairman rockefeller, i just want to say to you, you have taken this committee in at the -- in the consumer protection agency a number of times as chairman. i applaud you doing this, and i hope you continue, because i think the american public knows when they see these articles that there are big consumer protection issues out there, and i look forward to staying in fault with you in the oversight of those issues. -- involve with you in the oversight of those issues. thank you very much. >> thank you very much. this afternoon, we are sorry to hear from toyota, but this is about the agency. -- we are going to hear from toyota, but this is about the agency. others will take the seats at

some point in the future. i want to ask about the agency. not who is sitting in the seat at the moment, the agency and the credibility of the agency. because my understanding is that nhtsa has a budget of about $145 million compared to $875 million for security for the embassy in iraq. the security for one embassy in one country exceeds by multiples the amount of money we spend in nhtsa evaluating safety and related issues. now i have a seat here, and i want to refer to something that senator boxer said, because i want to ask whether you have investigated this. you just responded to senator udall by saying that investigations had been made and no evidence was found, and i made that list in july of 2003, an investigation in 2004, with

no did in 2005, 2006 -- no data to support in 2004, 2005, 2006. senator boxer said that it's something that made me wonder. mr. santucci, whose job was to conduct investigations, he went to work with toyota. that was immediately thereafter. the two have negotiated with former nhtsa colleagues to limit probes in toyota surging out of control. internal documents obtained by

cbs used the term negotiated. here's the question. if somebody left nhtsa to go to work for the company, that limited the investigations that results in no data to support further investigations, had you gone back and investigated inside the agency what has happened here? is this a case where for several years, the investigation happened, knowing that fatalities were occurring, and they did investigate, and there was no data to support? have you done an internal investigation to find out what this agency has done, what it should have done on behalf of the american people? >> yes, we looked at that employee -- those employees, and they can work for a company, but they cannot report to the department about issues they were responsible for.

and everything we can tell at this point is they did work for toyota, but not in an area where they are responsible did they report to dot. we looked at that, and some people believe that is not accurate. >> to you are saying it is just the appearance? >> i am saying that our review of it does not appear to show that they were engaged in activities that were prohibited by law from their engaging in. i said to another committee that i think this lot needs to be tightened up. i do. i work for an administration that sets the highest ethical standards for its people. they need to be tightened up, but we found no violations for these employees. >> if you take a look at the question of when information was given to nhtsa, and then

investigations begun, no data, no data, and then recalling 50,000 vehicles because the floor mats. then you come down further again and again and again, people are dying. it seems to just -- i am not sure anybody understands yet what is the problem. >> yes, sir. we know from our investigations that the format is a problem, and that is why these cars are up to ♪ -- for a recall. we know from what people have told us that perhaps electronics could be the problem, also, and we are going to do a review of that. if we thought the problem was in the trunk because the manufacturers said you have to put the floor mats in the trunk,

then we will look. but they are a problem. the sticky pedal is a problem. could there >> if you leap -- if you move to electronic accelerator, that is the only way you can prevent the fatalities? >> we a grand -- we agree with the people think that is a problem and we're going to do a complete review of that. >> this did not happen on your watch, i understand that. you have to respond in the aggressive way, but senator udall ask those questions and i think that they have raised questions of the credibility of nhtsa going back.

i know you want to fix all of that and run an agency that people can be proud of and in which people can have trust. >> if people think that there is a problem, we are going to address it. everything that i have talked about that we have to do with safety, it is just what we have to do. it is what people expect of us. but people say there is an electronic problem, we're going to deal with that. that, and we are paying attention to that now. >> thank you. >> thank you, mr. chairman. mr. secretary, i know you are looking at it now. but the point is, we set in place legislation that became law years ago as a result of the firestone tire recall issue.

putting in place the putting in place the thods that are so essential in order for nhtsa to do its job. i do not know on what basis you can rule out electronics. we are urging it, but it is not about us urging it. you cannot rule it out, because you do not know. even toyota does not know, based on their public statements last week that were, as i said earlier, conflicting. one said he could not rule it out, and the other said they are confident. how do we know? i would be interested to know. you have to look at those investigations to find out exactly what went wrong, based on that there was a trend in acceleration. six people died that year, in 2004. so did nhtsa look at it as a trend?

what did they do? did they based it on information they got from toyota? do we subscribe to toyota's explanation of what went wrong in 2004 and 2007? >> and mr., our domestic dissent a letter asking for all of the possible information -- senator, we sent a letter asking for all of the possible information from toyota to make sure they gave us everything they were supposed to give us to begin with. that request has been made. i agree with you, we need to look back and make sure we had everything based on what we had at the time. we felt the remedies were the right remedies. but when we look back and find that there was an additional informational component, we would have found a different conclusion. >> did they get the proprietary

data to make a difference? the point is, we do not know. you cannot conclude one way or the other. >> i cannot conclude we received everything until we receive the request we just sent to toyota. >> these previous investigations in 2004 and 2007, were they relying on toyota's investigations? >> what we have to rely on, senator, our complaints we get from people, what information we get from the industry, what information we get from the manufacturers. >> the independent investigation did not occur, is that correct? >> our people do these investigations. we have people on our staff. >> we have been told you do not have a software expert. looking at it in totality, what is independently verified? that is the issue, if you're -- hear -- that is the issue here.

this is on the heels of firestone. we have to figure out what went wrong. we have got to know. >> we agree with you. >> we have to get resources, then come forward with contract and out. isn't there a way of solving this? we have to get independent reputation. i am not clear we got all of the information from toyota. >> i am not sure, either. that is why we made a huge, voluminous request for information. >> back in 2004, -- they concluded after four months. who is information did they use to make that decision? -- whose information did they use to make that decision?

>> we look at all of the information, we make a judgment call is to recall needs to be made, and if the manufacturer decides needs to do it, if they do not, we required them to do it. >> what if the information comes from insurance companies like state farm? >> we work closely with all insurance companies and regard their information as very valuable. >> it is amazing to me that there is no continuity. this is a matter of life and death. obviously, that memory was not ensconced in this at the time. it was a title recall issue. then you have these debts. if you look at the death curve, at least submitted to nhtsa, 2004, six deaths, 2007, more

deaths attributed to unintended acceleration. i do not see that independent analysis was done. that is what is concerning me. yes, we're looking at it now, but where were they then? we have to look at exactly what happened then to make sure it does not repeat itself. these are all reasons to do a very aggressive investigation. >> senator, on my watch, i guarantee you that it will be done to early, as independently as possible with every piece of information we can get. we will not rest until these cars are safe. >> is it unusual for nhtsa officials to go to japan? >> yes, absolutely. i believe that toyota, the toyota business model is broken. i told mr. toyoda at that.

when they have good, expert, professional people in north america making recommendations and they do not listen to them, their business model is broken. i think mr. toyota got that message, not only from me, but from others. i think you will see some changes in the way that they do business. >> thank you. >> i am also told that mr. medford and his team were treated dismissively. actually, they used stronger language than that. so these are not common experiences. senator wicker, i call on you. >> thank you very much. senator boxer is under a time schedule, so i promise to be brief. let me ask you, mr. secretary, about these two studies, the

exponent study commission in 2009 by toyota, and the study done by professor gilbert of southern illinois university. as i understand it, exponent is an organization is that is widely known in this field, concerning analyses of defects. nhtsa has used them in the past. they conducted an analysis of the electronic throttle system. toyota received a report confirming their contention that the defense cannot be caused by the etc system because there are fail-safes that prevent it.

i want to ask your opinion about that study as compared to the gilbert study. this study was commissioned by persons who are interested in bringing a lawsuit with regard to these incidents. and professor gilbert determined that toyota -- that the system did not properly detect electronic malfunctions. he was able to induce unintended accelerations vehicles that did not trigger the failsafe mode. toyota, on the other hand, contended that in his tests, he manipulated the system that cannot ever occur under driving conditions. so i would just like to ask, at this time, realizing that their analyses are ongoing, if you

have some advice to the committee or can't comment on these contrasting studies. >> we are going to look at the studies that were done by the professor at southern illinois university in carbondale, but the organization hired by toyota -- by the organization hired by toyota. there is a committee member whose toyota experienced unexplained acceleration. we have purchased that vehicle, and we are going to examine it. what we are going to do is a thorough review of studies that have been done by the professor at siu and other groups. we are going to do our own study. we are going to do a review, we are going to look at the automobiles with unexplained acceleration and figure out if electronics were a part of this. >> so at this time, you do not

feel comfortable doing a preliminary criticism or opinion as to either one of these. >> no, sir, not at all. >> and a study done by your department would be a completely separate and exhaustive -- >> absolutely. looking at the cars that have acceleration which is not explained, trying to figure out if the electronics are the problem. >> can you tell us at this point what you know about this firm, exponent? >> all i know is what i heard at the hearing. we are going to get a copy of their reports and look at them. >> i would appreciate it if you could get back to the committee on the record and tell us whether in fact the department and nhtsa have used exponent. >> yes, on different occasions throughout the years, exponent had a different name, but nhtsa

had used them before. in terms of this report, we are reviewing that report, and it will be involved in our work. but there also will be a significant piece of the work that is independent, where we are going to pull experts from around the country, which various -- from academic and engineering, a science panel. but dr. gilbert's work, we are examining it now. >> if you could stay on the record the number of times your agency has actually used and relied on exponent. and just to be brief, you stated last week that it would be beneficial in terms of foreign country's information -- foreign countries' information, it would be useful to receive information

from there. what types of information do you not currently received that would be beneficial? >> we certainly receive information on complaints, but why don't i tell you specifically what we received and the areas where i think we are deficient? are deficient? >> ok, i a previous linter ship -- leadership to net in and did this with a huge a memo to a broad that separate the -- do not inundate us with a large amount of raw data. thank you, mr. chairman. >> thank you. >> i am trying to connect some of the dot here. we are trying to put together what happened and why it happened and and you are very involved in this.

i do not hold you responsible for what happened. i will talk to about going forward. when we look at any longer and letters of the law, there is a spirit of the law. they went right to work for to you to pryota. he convinced them to focus on the first acceleration, moving along -- ruling out others. you use the word "negotiations." he was involved. maybe if you looked at the letter of the law, maybe he

worked on something else. maybe he worked on safety belts or airbags. i agree with the comments wish to point this out. it is cozy, a cozy, cozy. it happens in a lot of places. i really applaud the senators. they have written a letter to the inspector general, and i want to put that in the record, and one of the issues raised this issue. going forward, without waiting -- because it just seems to me on its face, remember, the outcome of this was put by toyota in their own document, and i want to place it in the record, their own document talks

about the fact they saved so much money on this. this is the car that killed my constituent. this is the car that spun out of control, and that highway patrolman died because, i believe, there was pressure put on nhtsa from people had too cozy a relationship. i think it is part of the problem. could i prove it? maybe, if i had a lot of time, i could. but it does not look good. it smells bad, it is not right, and they applauded their victories. . is. look at this. this is their presentation. it says, a toyota safety group. fmvss110cir, labeling recall.

no penalties, save money on buybacks. negotiate recall on camry es, saved $100 million with no defects found. this is an outrage. so would you work with us now on tightening up this law? >> absolutely. >> i think that is key. as i understand it, toyota is now installing brake override technology. imagine. you are driving your car, you step on the break, and nothing happens. the car goes faster, faster, faster. so toyota is installing a brake overwrite technology as a fix. do you think we should use that in all new vehicles?

should it be involved with more vehicles? >> we are looking at that, senator, and particularly given the fact that mr. lentz has said they will put that in all cars, we are looking at it. it is a good safety device, and we are trying to figure out if we should be recommending that. >> the 2006 camry model is not on the current recall list. why are there models such as the 2006 camry, which have been involved in deadly accidents, not included in the current recall? >> i will get back to you on the record, if i can, senator. >> ok, because i do not think the recall was comprehensive enough, based on what i am reading. but i turn to you, because i trust your gut and on this. >> thank you, senator boxer.

>> the way i look at it, investigations were opened six times, close without action, 34 people died. i think we can do better. in 1980, there were 119 people in enforcement. today, there are 57. in 30 years since 1980, we have doubled the number of cars on the road, from 146 million vehicles in 1980 to 246 million vehicles today. has this diminished staffing level made a difference? >> more positions for nhtsa are recommended in the 2011 budget. we applaud the president for recognizing that we need more resources. >> do you think that would be helpful here? >> absolutely. >> secondly, regulatory or statutory reform, as i understand it, manufacturers can

voluntarily initiate recalls without waiting for nhtsa to order a recall, were nhtsa can order a recall initiated, but to do that you have to go through public hearings and investigations, giving the manufacturer time, defending the recall in court. it goes on and on. what, if anything, can be done to speed up the process? >> well, we do have to do investigations before we can require a recall. but the manufacturers have been cooperative. a recall was just announced today on some automobiles, and i guess what i would say, senator, is that we will look at that. for now, what i am saying is for the most part, manufacturers are cooperative on this. >> but we have an issue where they were showing off for saving $100 million, saying it was the floor mats. you can assess fines for this kind of behavior, but those

penalties can be as high as $16 million for a related series of violations. it sounds like a lot of money, but when toyota is bragging about save $100 million by negotiating a resolution to a safety defect that is not a recall, is that enough money? should there be more vulnerability to assess fines? would this be a useful tool? >> i think so, and i would also say because of our insistence and going to japan, talking to mr. toyoda, we cut short their ability to stall this out by them recognize and have a safety problem -- in talking to mr. toyota, we cut short their ability to stall this out by them recognizing they have a safety problem. >> regulators complaint, and you do not get an answer. i liken it to a hockey puck

going back and forth on the ice. i know you just pursued this with senator boxer. do you have statistics or information on the number of former nhtsa staff who now works for car manufacturers? >> we can get back on the record. >> and he suggested there might be ways to tighten the rules to bring back that public trust. what are your ideas? >> i think we should have the highest standard possible, nhtsa which, nhtsa employees -- which would prohibit nhtsa employees from working with auto manufacturers for a limited amount of time. for this administration, it is two years for a cabinet secretary. i think it probably should be longer. >> so you are saying that they can work with the agency on a specific issue, it just not with the regulators. that sounds like a good

idea. i know when you get these complaints, you scan your databases to figure out if there is a match or you have seen a number. we do not want to get in the fight about what the "new york times" said or not, but nhtsa stands its own databases. who scans corp. databases? >> we work with that, and we try to go through all of the data we can. >> toyota has a statutory requirement to report to our early-warning system. so we receive their peaceful reports, technical service bulletins. all of that -- we receive their full reports and technical service bulletins. >> the guy i mentioned, i talked

to him directly, and he felt like he was being told he was not telling the truth. he has never driven a car, she is afraid to drive it. and we have another woman, a nurse, the same thing happened. she barely survive. she was able to put it in neutral finally and stop it from accelerating. the problem from a trust standpoint with government is that these people all came forward and went to the agency had filed complaints, and all of these other complaints were going on. these details were somehow in the computer system. i truly believe that employees are trying to do the right thing, to figure out what tools we can give you so there is no chance of this happening again. when my constituents file complaints, at least there is some feeling that they were not going crazy when this happens to them, and they did the right thing reporting it, and they are part of the solution.

>> thank you for your leadership, senator. we appreciate it. >> thank you, senator. ñi>> i have a packet to hand ou, if that is ok. administrator strickland, i hate to see the secretary have all the fun, so i'm going to ask a few questions, if you do not mind. first, i want to ask about the resource issue. we have had a few senators today suggest that you need more resources, and i know that is in the president's budget, but have you made decisions on how you were going to fill those spots? it sounds like you might need more expertise in the software electronics area. do you know whatçó you are going to do? >> we have six positions provided for in the budget, if it is approved.

in terms of expertise, we have several pipelines. we have five electrical engineers, 125 in two years total. we also have a vehicle research center in ohio were we have an electronics engineer, a software engineer, in addition to other engineers. we are in the process of hiring and other electrical engineer. but i am having my staff go through and have a full assessment of the department, and we will deploy resources to make sure we buttress a stronger nhtsa. >> the camera -- camry solara and es300, and uia stands for unintended acceleration, basically, what you see is that in model year 2002, they added electronic throttle control. you can see the numbers, what they do.

there may be other factors in that, but i am glad you are looking at it, and as you look at it, i would hope that you focus on the electronics product control and other parts of the system that makes sense -- electronic throttle control and other parts of the system that make sense. >> that is a priority. the secretary has also already laid out plans for nhtsa to do a comprehensive review in the automotive industry. we are not only going to look at toyota. we will be looking at every manufacturer, because this is a system that has gone through the entire united states fleet. >> on the second chart, these are state farm numbers. unintended acceleration claims. you can see thatñi the numbers e different. every time they add electronic çótroubleñr control, with two

models,]iñ camry and corolla, yu see a spike. does nhtsa have comprehensive in other words, some of these numbers are from state farm, some are from customer questionnaires. do you have the data that you need? about three weeks ago, the issue three query's for everything regarding the but the brakes. there is a rich amounted data. -- an amount of data. we to pave the get the data.

we saw it coming in purdan. we cannot find that defect. people were to find a defect. we never stopped looking. >> the us question i have for you is that some of the senators have alluded to -- there is an

allegation or inference that there is a relationship between them and the manufacturers being too cozy. i do not know if that is true or not. you are the new administrator there. do you have concerns about the relationship b being too cozy? i know you need a close working relationship. that is important from. do you have that concern that the relationship was too close? >> my responsibility was to run the department for tt. ng balls at -- running of the halls at -- running the halls at nhtsa

other than my employees. i will respond in more detail on the record, but the claims that toyota made about negotiations or influenced is false. that is like me claiming that i was responsible for the sun rising today. absolutely false. and nhtsa's people did independent work and investigations, and that document absolutely has no foundation. >> thank you, senator pryor. >> mr. administrator, let me ask you this. there are questions about the vehicles that you investigated, and again, i think you have said that full investigation top to bottom happened. ok. so where were these vehicles

manufactured? with a manufactured here in the united states, or in some -- were they manufactured here in the united states, or in some other location? these specific vehicles. at these specific toyota vehicles. >> i do not know where specifically. a significant number of camrys are manufactured in the united states, but i have to get back to you on the absolute country of assemblage. >> please do. is that important in your investigation? if you see all of the vehicles are coming from one location, would you go whoa, the lightbulb just went off? >> i think you are alluding to fort-firestone, where there was one plant in particular that produced the tires that have to tread where separation issue.

we take everything into account, the place of manufacture. if there is a trend, we will find it. for example, the sticky pedal recall was linked to indiana. they used two manufacturers. the other was in japan. my understanding was that we did not see the same issues and that japan pedal as the u.s. pedal. so we absolutely take into account all manufacturing inputs, whatever the problem is. >> ok. now tell me, this full investigation, top to bottom, tell me what that would entail. walk me through what you mean by that kind of investigation. do you look at the car itself? >> in some situations, there are several steps in the process. from a preliminary investigation all the way to an engineering analysis. but in the typical investor toward process, we send an

investigator to the complaint tends -- complaintant to review their car. if it is electronic, we will take a look at those particular assemblages. we will take a look at the map, we will take a look at whether there is a surge, and they go through to eliminate any and all possible causes. if we find a defect, that is where we take action at that point. if there is a risk, we go further with the recall request. >> ok. but when you send them to look at these things, do they fly out their computers and everything else? what are you seeing? >> it depends on but -- on the type of car. in 2004 and 2007 -- 2004 was a smaller look, 2007 was a larger look at electronic throttle

control. in either case, if the investigator goes through the list and finds a defect that had been made aware from a prior recall, that is what they will fly. at the end of the day, in terms of how the investigator goes through this process, it is confined to the defect. if we do not find it does affect -- a defect, that is when we go forward. >> there is an investigation, and then there is an investigation. when you say full investigation, top to bottom, the image to create for me is that there are computers hooked up to this car, they are testing this and that, the next thing, the car is taken apart, i could go to the shop floor and there are parts everywhere. that is not happening, is it? >> i think the consumer would not be happy if my investigator took apart the car. but in situations where there is

a need to take a look at on board diagnostics, investigators bring those tools with them. they also look at the assemblages and drive the car, seeking to replicate the problem. that is what i mean by top to bottom. if something warrants something broader, nhtsa will do that, as we did in 2004 and 2007. and what we will be doing in undertaking the full review for emi in days coming. >> let's confine ourselves to the instances were something tragic happened, where somebody died. i would like to know what the investigation was. i am not asking you to tear open all the files of your agency, but what i am trying to get to, because we could add 50 more people, if we could add 500 more people, but if the investigation is not getting us there to what is going on here, it will not make any difference. the second thing, because i am out of time already, is this.

i do want to know where this all comes from. i am as free trade as anybody here. but i will tell you, the american consumer is getting tired of this kind of thing. if the problem is that we're getting substandard products from some other part of the world. what i am also extremely tired of his the -- is the treatment we get versus how we handle these things. our borders get shot, their borders keep coming -- our bordersgé d shut, their borders stay open. i will tell you, i have worked with this country before, and i think they have some responsibility here. >> sir, let me just say, the comments from your opening

statement struck me. i am going to japan. i talked to the japanese ambassador to the united states on a couple of occasions about this, and i wish i would have the insight -- i think it is something that we need to raise. i am going to raise it with the japanese ambassador to the united states, and i am going to raise it when i go to japan. i think it is a point well made, and one that we should be making when it comes to automobiles. >> mr. chairman, we are out of time here, and i appreciate it, but i hope you do. what they have done to us in an area that i'm concerned about, in my personal opinion, is outrageous. andçóñi yet they want us to cone to buy their products. again, i am a free trade sort of guy. fair trade. i hope he will >> this hearing will come to

order. people will be seated. i welcome our panelists. and what happens here is that i usually make an opening statement. there were three -- two members, two senators who didn't make opening statements this morning. so they will then make their statements. and then we will go to the panel. i want to welcome our panel and thank my colleagues for dedicating so much of their day to this extraordinarily important issue. as i said this morning, we have two goals today.

first, to figure out exactly what happened so those who made the wrong decisions can be held accountable, and second, to determine what actions need to be taken both to fix on going safety issues and to make sure this never happens again. we learned a lot this morning from secretary lahood, secretary of transportation, and administrator strickland and clarence dillow about the the government's role in toyota's recent recalls and why these problems were not identified sooner. we have an obligation on this committee to make sure that the american people know the full story. that's what we do. we do oversight so the american people can understand what goes on. and what is the root of the problem and what is being done

to solve the problem. and both federal regulators and toyota must learn the lessons of these failures and make sure they are never repeated. this afternoon, we will hear from toyota executives about how these problems occurred. and why the company did not respond more quick little. i want to say again in the presence of the second panel what i said this morning at the first panel. toyota is an extraordinarily important company to america. as well as to my home state of west virginia. and to our national economy, as well. i worked very hard to bring a toyota engine and transmission plant to buffalo, west virginia, because i knew toyota was a company that believed in perfection and reliability.

a company that believed a winning business plan was one where growth and profit came from only putting the quality of its products and the safety of its consumers first. it saddens me deeply that it seems somewhere along the way, public safety decreased in value as profit margins soared. the commerce committee has been examining the recent toyota recalls and asking whether the company was losing its focus on quality and safety. indeed, the president of the company indicated that. what we have found is that toyota has plenty of warning

signs that something was changing. in september of 2006, for example, the president of toyota north america jim press, expressed concern in a presentation to toyota's top executive boards in japan that toyota quality was slipping. and that the company, he said, was facing growing problems with nht nhtsa, the u.s. safety regulator. but it doesn't seem like the message was heard in japan. >> we have a less indefensible projects. it is not typical of the 20 nootka that i know. i ask consent to present the power point presentation. it is so ordered toyota want to

remain successful and resume consumer confidence. i believe that will happen. it needs to find this balance between quality and province once again. toyota i's please deserves nothg less. they tried to you into cars. i greek -- they drive a toyota cars. the american people deserve a top to bottom review and an honest picture of what happened and what we are going to do moving forward. this morning, we began an important conversation about the

kind of legislation we may need to strengthen our system. that legislative work will continue. the public's trust has been compromised. the system has broken down. for the safety of millions of americans, let's get this right. ds of toyota workers in america, let's get this right. thank you to all of our witnesses for participating and for working with our committee. i look forward to hearing from each and every one of you. let me just add this. we have a system in this country where our committees have

oversight. we take that very, very seriously. and we need to take it even more seriously because not all administrations are doing what, you know, presidential administrations are doing all that they could. nhtsa is not doing all that it should. so we step in to try to hold a measure of clarity to all of this. now, with your permission, i want to call on senator cantwell and i don't don't see senator lautenberg. >> thank you, mr. chairman and thank you for holding this important hearing today. toyota has built a reputation in america for its quality, safety and reliability. toyota introduced into our manufacturing lexicon lean manufacturing, kazen, root cause

analysis, and the ability of each line worker to pull the ondon cord and stop the assembly line if they see problems. when toyota became aware of the 2004 nhtsa data that indicated a possible problem with sudden unintended acceleration of some vehicles, someone in the management should have pauled the ondon cord. part of our collective disappointment with toyota's response to date is that we expected more from them given the principles under which they operate. no doubt entrapped floor mats do explain a percentage of the reports of unintended acceleration but i do believe we need to explore other causes such as electronic throttle control and electronic and the engine control model software. a recent article in discovery.com sums it up. it takes dozens of microprocessors running 100 million lines of code to get a premium car out of a driveway and the software is only going

to get more complex. small errors in how software performs can lead to big system problems. i think of these unexplained occurrences of unintended acceleration as being part after extreme tale of a bell curve. it's an occurrence, a rare occurrence but when it does happen, it can have catastrophic consequences. i'm glad that secretary lahood is looking at electronic throttle controls and engine control models across the industry. i am concerned that unless all of these critical variables associated with one of these reports of unintended conflue e confluences can be identified and then reproduced there may not be definitive answers. toyota's solution is to have a brake override. it is not really a solution as much as it is a failsafe strategy. so mr. chairman, i hope that we can come up with answers today to these important questions beyond these concerns.

i'm going to be questioning our witnesses about the electronic data records because one of the issues here is having people who have been involved if these incidents be an able to have the information that gives them certainty about what's happened in these incidents. i thank the chairman for allowing opening statements. >> thank you, senator cantwell. now senator lautenberg. >> thanks, mr. chairman. last year when congress and the president stepped in to help the american auto industry, there were many who said that gm, chrysler, ford, deserved to fail. we heard cries that the big three were bloated, they didn't understand the american consumer, and they didn't know how to innovate. and we especially heard that they needed to be more like their foreign counterpart, toyota. we're not hearing that anymore.

and questions are raised that have a sinister appearance. did toyota gain market share by short cuts on safety? by trying to minimize expenses that were to be made to make sure that everything was operating appropriately? toyota became the number one car company in the world because of its relentless marketed reputation for safety. we hadn't seen that. and i'm deeply concerned that this reputation was built on a house of cards. if we learned anything from the crisis that's gripping toyota, it is this. that if a company puts profits above all else, especially safety, consumers are the one who pay the price. we saw in toyota that single-minded drive for profit when last year it bragged about

an internal document that gave it a regulatory win. toyota bragged of a win when it saved $100 million by avoiding a full recall of the 2007 camrys and other car models. it bragged of a win when it saves millions by avoiding a investigation into the tacoma pickup while delaying safety changes to other models and it bragged of a win when it avoided another investigation into the sierra minivan. with every one of these toyota wins, americans have been the ones who have lost. and i come from the business world and i know the importance of revenues to a company and i understand what it means to work hard to make a corporate profit. but i also know that striving for profits should never be so critical that it eliminates corporate responsibility. toyota's quest for profit hasn't just placed the black cloud over this car company. it's led to death, injury and

fear among drivers all across the united states. matter of fact, had i someone walk up to me last night, a woman who had just ordered a toyota, and she asked me if i thought it was safe. well, i couldn't really answer the question. i assume that will this was an aberration. i certainly hope so. toyota drivers and all-americans are owed a complete and candid explanation about what is wrong these vehicles. and it's clear we're still not close to getting these answers. in fact, a few days ago, toyota executive used language that sounded like it came right out of a crisis management playbook, explaining the company's problem. it said it had grown too big, too fast, it had misplaced its priorities and now it will put consumers first. nothing more than words and they ring hollow.

we need to see action. and a real response not just slick excuses created by public relations strategy. justice just as toyota has to get to the bottom of this crisis, the national highway traffic safety administration has to do everything in its power to prek toyota buyers and every single driver on american roads. in recent months, the agency has taken responsible accepts to entangle this mess but it's critical that nhtsa be given the resources it needs to keep our roads safe and hold our car companies accountable. mr. chairman, i'm running one page longer if i might or otherwise i'll just cut off. >> please go ahead. >> at the same time, nhtsa must continue to stay on top of toyota, make sure that consumer complaints are taken seriously, responded to swiftly. and i know that nhtsa and toyota are in talks to confront the problem but let's get one thing

straight. when it comes to safety, there's no room for negotiation. it's my hope that toyota, the company that has a lot of good things to say, to be said about, there is my hope that toyota will start to address this crisis fully and forthrightly so that americans will have the confidence they're safe when they get behind the wheel of a toyota. thank you very much. >> thank you, senator. i want to introduce our panel. the first speaker will be the executive vice president of toyota motor corporation. seco secondly, executive vice president also of the toyota motor corporation. and the third person from toyota is president and chief executive

officer toyota motor north america. and then there is mr. clarence ditlo, director for auto safety. we would like to start with you, sir. >> chairman rockefeller and members of the committee, thank you for inviting me to address you today. my name is uchiyamada, executive vice president of toyota motor corporation. and i am the chief engineer for the overall company. i was fortunate to be the chief engineer of the first generation prius. i helped develop the first mass produced hybrid in the world and this hybrid made other

automakers realize the importance of environment friendly technology. as the toyota president testified last week, toyota's priority has traditionally been first safety, second, quality, thi third, profit. we are not only trying to comply with regulations and standards and to strive for good safety ratings but also to improve the consumer safety in the real world. why concerns have been raised about our electronic control system. this system used by all major

automakers, actually represents a great safety advancement enabling traction control and electronic stability control among other things. the controls the engine structure system, toyota takes the greatest importance on insuring that the reliability of the system is absolute by undertaking design and testing processes. three things insure this absolute reliability. the first is defensive mechanisms we built into the design. second is its tolerance to extreme environmental conditions. and third is it resistance to

other problems. systems in toyota's cars are robust. the design includes two separate central processors. the main or control cpu calculates and executes the operating command for all engine systems. the subcpu monitors control input and output and main cpu to confirm they are working correctly? they are not in agreement provided the main or subsequent one.

the management system will go into a failsafe mode of operation. they are tested to make sure it will stand the environment in terms of moisture and interference purda. we have a system that has confirmed this. there is no -- we test it with a double the year paean epi. -- double the european epi.

we tested in the system during the design phase and usher there is no intensive -- to ensure there is an intensive acceleration an. . . absolutely clear. as a result over extensive testing, we do not believe sudden and intended acceleration because of defect in our control stim systems has ever happened. however, we'll continue to search for any event in which any event ever occurred. you no long ver to question the safety of our ecs.

we have asked a scientific consulting firm to conduct its own independent, comprehensive evaluation. we're also addressing the issue of unintended acceleration through new technologies including event data recorders and break ovake override system. and break ovake override system. we have plans to the industry was its environmental performance. now, we will strive to continue to be the leader in the area of safety. i help drive our team's effort to meet this challenge. insure our drivers' safety and regain their trust and confidence. thank you. >> thank you, mr. chairman.

and now i'd like to turn to mr. sasaki. >> thank you for inviting me to join you to day. my name is mr. sasaki, i'm executive vice president of toyota motor corporation where i am responsible for quality assurance and customer service. in my testimony, i will outline the significant ways in which toyota is changing its approach to customize safety in light of the lessons we have learned from our recent recalls. as we look to the future, we have to listen more closely to our customers' voices and

address them more quickly and aggressively. we have fundamentally overhauled toyota's quality assurance process under our president akio toyoda. this overhaul will cover entire quality assurance from vehicle planning and design to manufacturing, sales, and service. in the design stage, we previously had been focused on -- [ inaudible ] however, we need do need to consider customer expectations and real world usage over our peoples. even irregular use, we also will reduce the number of things we

ask our customers to do correctly. while quick and reliable recall decisions are important, so, too, are the steps we can take to prevent such an event during our quality assurance process. therefore, we will intensify our focus on safety design and the principle of preventing any harm during the full vehicle ride. with regard to customer service, we will build a better network to correct customer information in a more timely manner at the site. in the position, in the united states, we will establish additional technical branches in

several cities. this will reinforce our local customer service and allow us to deploy s.w.a.t. teams over technicians to make on site inspections of reported instances of unintended acceleration as quickly as possible. to make this activity more useful, we will not only use the data but improve our vehicdiagn tools w regard to recalls, in order to help us make timely and appropriate decisions, we will share global field information by allowing each regional staff to access toyota quality network globally. for the future, our u.s. stock,

we'll have a clear additional making law or made to be our goal is for the united states to have an even greater voice in decisions on recalls and other safety and satisfaction issues. the quality and safety of our vehicle are toyota's life line. i will do my uphmost to make sure that our vehicles remain among the safest and the most reliable in the world by meeting and training all toyota quality and safety personnel in united states and all other areas. chairman rockefeller, members of the committee, these important actions reflect toyota's unwavering commitment to respond

to the question of quality that our company has built in the united states over more than half a century. we look forward to working with nhtsa and with congress to advance our shared world of improved road safety for the drivers and the general public. thank you. >> thank you very much mr. sasaki. and now i would like to call on the president and chief executive officer of toyota motor company of north america. please? >> chairman rockefeller, members of the committee, thank you for inviting me to testify today. my name is yoshimi inaba. in my testimony, i'll address the deceasive steps toyota is

taking to restore the trust of the tens of millions of americans who purchase and drive our vehicles. for 50 years, toyota has provided americans with cars and trucks that are safe and reliable. for the past 25 years, we have built many of those vehicles here in the united states are 200,000 toyota team members at plants, dealerships, and suppliers in this country are united in their determination to provide even safer, high quality vehicles in the future. i'm honored to be joined by several members of the toyota family in the united states. their dedication to our values has helped establish toyota's record for quality and dependability. in recent months, we have not lived up to the high standard

our customers and the public have come to expect from toyota despite all of our good faith efforts. we sincerely regret that our short comings have resulted in the events associated with our recent recalls. i can assure you that we have learned from this experience. here are the actions that we have taken. first, we have developed effective and durable solutions for the vehicles we have recalled. our u.s. dealers have repaired more than one million vehicles to date and continue to make xrart efforts to complete these recalls quickly and conveniently. they're literally working around the clock. second, we're making fundamental changes in the way our company

operates in order to insure that toyota sets a higher standard of safety, responsiveness to customers and transparency with regulators. at a global level, we have established a special committee for global quality led by toyota's president to thoroughly review operations. in addition, we are sending a blue ribbon panel of distinguished independent experts to confirm that the in-house quality controls we are putting into place conform to best industry practice. i am pleased to say that former transportation secretary rodney slater will help lead this panel. we are also putting a system in place to better share important quality and safety information across our global operations and

to work more closely with the government agencies including nhtsa in the united states. at the regional level, we'll insure that our customer's voices will be heard and acted upon in a timely manner. in the united states, we will deploy s.w.a.t. teams of technicians to make on site inspections of unintended acceleration reports as quickly as possible. and north american operations will have more autonomy and decision making power with regard to recall and other safety issues. we will have a team of top engineers who will focus on strengthening our quality control throughout the region. at the customer level, we're taking significant steps to bolster confidence in the safety and reliability of our vehicles.

toyota will be one of the first full line automakers to make brake override systems standard on all our new models sold in north america including hybrids which have a system that achieved a signal we love. we also are installing brake override on seven existing models. in addition, we have commissioned a comprehensive independent evaluation of our electronic control system by a world class engineer and scientific consulting firm. chairman rockefeller and members of the committee, toyota continues to produce manufacture the best vehicles in the world. we are proud of our heritage and deeply appreciate the loyalty of toyota drivers so many of whom

continue to tell us how much they love our cars. for the future, we will revitalize the simple principle that has guided toyota since 1937 to build the highest quality, safest and most reliable automobiles in the world. >> thank you so much. >> thank you, senator rockefeller and members of the committee. i won't go over the earlier points from this morning. >> i can't hear you very well. >> sorry. >> thank you senator rockefeller. i won't go over my earlier points from this morning. i'll focus -- i want to go to some policy issues. first of all, strong regulations and infective enforcement protect not only the consumer from deaths and injuries and crashes, but it also protects the manufacturers' reputation by insuring the safety and reliability of the vehicles that

they sell. no one wins by cutting corners on safety. the unfortunately the department of transportation is not kept up with modern automobiles. the standards should lead technology, not lag behind technology. the agency, toyota itself, during the last ten years has lost sight of where it was. in 1980s when the camry was first introduced as one of the best vehicles in %)a@åh2 toyota needs to go back to what it does best, building safe, reliable vehicles and responding to the consumer. first and foremost for toyota,

it needs to install the brake- override for all vehicles with the electronic product components. throttle control. to restore consumer faith and the openness of toyota, it needs to release all the information that it submitts to the government and the acceleration investigation. it needs to conduct a public engineering study into electronic controls that has experts with no ties to the automobile industry. nhtsa needs to immediately set a standard for accelerators and not the old mechanical standard that dates from 1973. it needs the standard for electronic brake overrides for all manufacturers. it needs to upgrade the event data recorder rule. we have to have event data recorders on all vehicles.

they need to be standardized and there need to be readouts. finally, one of the things that come out of this is we don't do adequate crash investigations in this country to protect -- to find out what the problem is. to predict defects and catch them before they become major crisis like toyota acceleration and ford explorer. if we had a national accident sample system at the full design level, 19,000 crash investigations per year, we could have predicted defects like this. we would have found them earlier. we wouldn't have them built up over ten years before we get a recall and before manufacturers like toyota suffer in their reputation. let's build a system that works as we move forward. because it gets back to that final thing, cutting corners on safety is no bargain for anybody. the consumer, the manufacturer, or the government.

thank you. >> thank you. i will ask the first question and then senator wicker from mississippi who said he'll be back in time is acting to day as the ranking member. and he'll as the second question. we'll good on from there. last week mr. lentz, the president of toyota motor sales usa, testified that he had no authority to recall toyota vehicles sold in the united states when those vehicles have safety problems. i believe one of you indicated that that's going to change. i want to probe that. is that an accurate statement as of now?

>> translator: let me answer. it is true that north american member was not officially included in our recall decision making process. [ speaking japanese ]

>> translator: and we believe that we were taken into consideration the opinions of those members in north america sufficiently. however, we realize that as you pointed out, our old system may have caused some concern or suspicion on the part of the united states or north american marketplace. therefore, in order to improve this, we have decided to include someone who is very well familiar with the north american market situation to become a panel member, a very important panel member that will be involved in the recall decision making process. and this inclusion is an official one. >> and when will that system start?

[ speaking japanese ] >> translator: our north american entity has already selected candidates for this particular position. so although i hope bewouldn't ha we wouldn't have to come to that, however, if we have to come to this, then this new system will be deployed immediately. >> let me ask -- we have two members who are full board members, actually special board members of toyota motor company. so i can't help but wonder when this shift began to take place. it came as a surprise to me.

but it evidently has taken place for some time now. enough to affect quality. and your president has so indicated. was that a board decision? was that just something that evolved? how did that come to pass that there was a little bit less adherence to quality and safety which is what i always associated toyota with and the desire to become the largest company in the country. that is a shift that was caused by something, some decision. >> may i step in? [ speaking japanese ] >> allow me to answer.

>> translator: as our president indicated in the house hearing last week, we really did not keep pace with our business expansion, our reinforcement of the human resources of the quality assurance.

>> translator: how this issue came about is because there were many vehicle -- excuse me, many voices were sent to us from the customers. but we really not listen to every one of them very carefully one by one. we should have really listen the to them carefully and rendered some technical analysis. so that it would be connected to our following product improvement. however, the quality of this work or the efficiency of our work or the speed with which we worked had become sluggish or sort of failed gradually. and this has come to a much larger issue. and we have taken this very seriously and reflected upon it very seriously. and then as we said earlier, we

have changed our system and we are to improve our system very drastically and very greatly. we're working on it very hard right now. >> we have a rule here that each questioner can only ask five minutes of questions. and my time has run out. i will come back. senator wicker is not here now. so i'll call on senator cantwell. >> thank you, mr. chairman. i think i'll direct my questions to mr. inabaf somebody else knows the answer, that's great. under what circumstances does toyota make available the c contents of the electronic data recorder? >> i will be glad to answer but he is the specialist. [ speaking japanese ]

>> translator: at this time all the toyota vehicles have the electronic data recorder or i is set in such a way that event electronic data will remain. it is not the case whether this is disclosed or not disclosed. however, because there is a special interface that we use, it is -- it just turns out in such a way that only toyota can read it out. may i continue? >> yes, go ahead. [ speaking japanese ]

>> translator: we believe that such data should become more public and, therefore, we are trying to make this data available to other entities than ourselves. indeed, we're trying to provide 100 such data recorder by early april and 150 units of such recorder by the end of april in north america. >> can i -- if i co. we only have five minutes. i'm asking this because one of my constituents son died in a single vehicle crash driving one of the recalled 2007 toyota tundras. his parents have the truck's edr and requested the company to

give them access to the software to read its contents. toyota has turned them down. in my state there is a law pending in the washington legislature as a result of toyota's refusal. i want to know, is it possible that you will provide -- can you provide that information to mr. eaves' familiar sloi th eaves' family? >> we o would be glad to do so. and this is also our desire to find out what has happened and very, very sorry that what has happened to that family. but we will be -- as he said, you know, 100 units are going to be made available by first of january -- or beginning of january. and also just for your information, we are delivering first three units to nhtsa tomorrow. and also at the same time, we are dispatching our engineers to train how to use it. so we are doing this just

tomorrow. >> does toyota store all the information? i should say thank you for. that we look forward to getting that information. does toyota collect and store all the information from edr rz it decodes? and what does the company do with the information? [ speaking [speaking japanese] >> i am not 100% sure, but so far in the united states, when the information was requested by entities like nhtsa or the courts, we submitted it to them and i assume it is they that they are keeping it.

>> is in it valuable to collect this information to see trends? [speaking japanese] >> i think you're completely right. we should utilize that data more actively to expedite the cause of accidents. >> and is there some reason that it is not standardized, why that data device is not an open interface that is readable by other individuals? is there some reason why u.s. manufacturers do that and toyota does not? [speaking japanese] >> i understand that at this time some makers make it open

and some do not. it is not a uniform state. >> my time has expired but this is an issue to continue to look at and investigate. >> senator can well, because of translation, we have decided that each member will have seven minutes rather than five. you have another two minutes. >> all along that line of questioning, if i could, it has been the intention of victims of this accident that they cannot get access to the information. only one electronic data recorder. and so i know you think maybe making a move to 100 is a big step but then when they have this information but i assume that data and information

analyzed by lots of different people could yield important information. so besides the 100 devices, when will you try to make it an open interface? >> let me address that. i think by middle of 2011. we're working with vendors and therefore it is going to be commercially available, health regulation. ahid ahead of time of the regulation. [ speaking japanese ] >> translator: we would like to

make this interface open or public so that it can contribute to the finding out the cause of the accidents. and not just waiting for that to happen, we would like to bring more data readers to the united states so that this will also help to make this information available. >> and nhtsa would also have this information and make it available if necessary? >> translator: that is correct. we'll be handing over our readers to nhtsa. >> thank you, mr. chairman. >> thank you. senator wicker? >> thank you very much. i was out of the room whether this hearing began. it is great to see senator lautenberg back and looking so

good. he had his first treatment. he tells us that it's good for weight loss. but, frank, you're looking -- i don't want to try it. but i think i speak for everyone. it's wonderful to see you back and looking so great. let me ask my question about three analysis of the electronics. you have december 2009 -- and i'll ask this of which ever representative from toyota would like to volunteer to answer this question. commissioned to an outside firm and it's my understanding that there has been an interim report confirming toyota's contention that the unintended acceleration events could not be caused by the etc system because the

fail-safes are successful in preventing it. now you have another study called the gilbert study, this is a study paid for by, basically, plaintiff's lawyers and people interested in bringing a lawsuit against toyota. they have a perfect right to do. mr. gilbert, professor gilbert is a professor at southern illinois university. he did a study that determined that the system did not properly detect electronic malfunctions. and, of course, we understand that toyota disputes these results saying that professor gilbert's tests required a manipulation of the system that cannot actually happen on the road during driving conditions. and then let me ask about the 2007 study done by nhtsa.

it was done on the lexus. they concluded that there was no defect in the electronic system. i understand you've been critical of that study. but i'd like to ask toyota and mr. ditlo about those three analysis. and ask when this sort of thing is done, are they peer reviewed? who takes an outside objective look at it? people have a right to hire an attorney and make an assessment. toyota has a perfect right to do an assessment. and then nhtsa assessment, i guess that was done internally,

perhaps. they contracted that out. but is there an accepted peer review process to look at the methodology and tell us whether it was skewed one way or the other, whether the table was tilted in one direction or another? whether it was absolutely called by the numbers? so i'll let mr. ditlo go first and then toyota can -- >> there are a known peer review process to review any scientific test and study. none of the three studies that you cite have yet been peer reviewed. and our taking the -- >> even the 2007? >> no. as a matter of fact, there's nothing to peer review because the government has no data from that test on the electronics. it has no test procedure that it did. so if you called in a panel of scientists to look at the information on the testing, there is no information to look

at. i mean i know that this is difficult to fathom. but i called up -- we filed a freedom of information act request, didn't get any data or procedure. i called up the government and said are you sure? you know, speaking as an engineer, you have to have a data. you have to have procedure. they said, no, we have nothing other than the conclusions. it is what it is. so you can't peer review something that you don't have. certainly to the southern illinois study, it should and could be reviewed. >> who will speak for toyota? >> let me start. my colleague will supplement. first of all, to that question that i have said in my testimony that we have asked the honorable rodney slater who is the

ex-secretary of transportation as our outside adviser who set up a panel and we will also ask him specifically that he can set up a different from ex-poen ent laboratory or whatever he deems appropriate so they can test again our ets system. as far as the exponent is concerned, it is a reputable consulting firm. and when the final report is available, we'll certainly make it public. [ speaking japanese ] >> translator: i would like to talk about the exponent case and also dr. gilbert report. [ speaking japanese ]

>> translator: we asked exponent to evaluate this. we asked them to do it completely independently. we have not interfered with them at all with regards to the method they might apply. [ speaking japanese ] >> translator: i'm sorry. so i think we can call it a pure third party evaluation. [ speaking japanese ]

>> translator: we have tried to re-create the experimentation based on our estimate. we were able to reproduce his result. however, this we could do only in the laboratory and we believe it is extremely unlikely or very difficult to reproduce in the real world. [ speaking japanese ] >> translator: we also used other car manufacturer's vehicle to do this experiment. and we were able to create the same result using other make, other vehicle makes. >> well, thank you, mr. chairman. it's amazing how quickly seven minutes rolls past.

let me just suggest to you -- >> 7:40. >> that's right. let me suggest to the next ten seconds that there is an entity called a national academy of science that's does independent peer reviews. i found in my experience 14 years in the house and senate that they can be relied upon to call it by the numbers. i would simply suggest to this panel and to colleagues that it might be worth while to ask nas if they're interested in performing an outside independent peer review of all three of these analysis so that the committee can benefit from it. thank you, sir. >> thank you. senator dorgan? >> mr. chairman, thank you very much. i've been sitting here thinking about it. about four months ago i responded to a want ad and purchased 2003 camry for my daughter who is an upper classman in college. i did that because the want ad

seemed appealing to me and i knew that toyota was a car with quality and reliability. and i have to tell you that as i've read and studied what has gone on in this issue, i am enormously troubled by toyota's response going back some seven or eight years to this issue of acceleration, unintended acceleration. i just think the customer and certain the federal agencies would expect more of and expect better of your company. mr. ditlow, you said in your testimony of the 2002 to 2010 camrys linked to unintended acceleration, the unrecalled camrys have twice as many fatal

crashes and deaths as those who have been recalled. >> that's correct, senator. >> are you confident with those numbers? >> yes, i am. i expect that the numbers will increase as more investigation is done. we have two other cases right now that we're looking into. >> if mr. ditlow is correct that they're linked to unintended acceleration, if there are twice as many that are not recalled as there are that have been recalled, doesn't that raise real questions about whether the recall is extensive or as extensive as it should have been? >> senator, i'm not personally familiar with that information. i will ask mr. ditlow to look into that. >> if the information is accurate as mr. ditlow has presented it, you would reach

the same conclusion that i have reached, that recalling body of automobiles that has only half you would recall particularly those that have twice the rate. >> i believe that that should be the case. >> less ask anyone about this accelerator. you have indicated in your testimony, mr. uchiyamada, that as your testing results, it was not because of the defect, and we do not believe that it has ever happened. and then, mr. inaba, you're saying that you are taking steps to bolster confidence and have never found a defect that has caused unintended acceleration. i think you are saying that you

are bolstering confidence but you do not believe that there was a defect that caused the unintended acceleration. is that what you're saying to us? [speaking japanese] >> it also depends on the results. we've sold over 40 million vehicles and there was not a single case where we could identify that a defect was a cause of the on wanted or unintended acceleration. >> so your position is you do

not at this point think that there's a defect in the accelerator or the throttle sensors that has caused sudden acceleration. i want to try to understand what you're saying to us. and then i want to ask this question finally. mr. wicker mentioned the studies by a professor from illinois university. voracity of that study. it's very technical, i'm sure. i want to show a chart that i believe -- this is a chart, a photograph that is on your own website. and it shows some technical data with respect to sensors. the first image shows how the sensors in the accelerator pedal send signals to the engine computer. and professor gilbert wrote this model has the potential for the engine computer not to recognize or short circuit in the pedal censor. i think you've indicated you're

not -- you don't necessarily agree with that conclusion. but then there's another censor on the throttle belt inside the engine, and that is the second chart. and toyota uses -- and by the way, this is a different censor. toyota uses sensors that correspond to the second picture. most automakers use the type of sensors on the second. both -- for both the accelerator pedal and the engine throttle, toyota alone, i believe, uses the better censor on the engine throttle control but the less reliable censor on the accelerator pedal. and so i guess my question is why does toyota use a different and at least concluded by some a less reliable censor on the pedal assembly than most other manufacturers use? is it a cost issue? what has pushed toyota into that

judgment? who could answer that question? [ speaking japanese ] >> translator: we do not use a censor less reliable because of the cost. >> translator: we put together a system under which the two sensors do not really give up the same values at the same time by so doing we could examine the va b validity of the signalling system. >> all right. i'd like to inquiry with a written question a bit more about that subject. let me, again, just make this point, if i can. i think what you are saying to

the committee is you're doing a lot to try to establish reliability once again. i don't think there's any question -- everybody in this room has read the ratings over many, many years. toyota has been a brand that has inspired confidence and reliability and dependability and quality and so on. but i do think even those of us that purchased that vehicle have some great concerns about what we have learned in the recent months about the company's response to the questions of sudden acceleration. and i'm especially interested in and also concerned that you're saying to us that the sudden acceleration issue is not -- is not in your judgment resulting from a defect in the electronic system of a throttle or an accelerator pedal. it seems to me to be at odds with what many others believe to be the case. and so you're doing a lot of

things with respect to recall. you've got, i know you've got good men and women working 24 hours a day trying to call vehicles in to dealerships and so on. but is it because you think there is no defect just because you're trying to instill some greater notion of reliability? [ speaking japanese ] >> translator: as i said, there is not a single case that etc's failure led to unwanted or unintended acceleration at this point. however, we would like to do the following to insure the safety of our product. [ speaking japanese ]

>> translator: our first point is it could be sciences you'd liesing a third party organization to do another evaluation. >> translator: for example, right now when you look at the notations in the vehicle sped control of a nhtsa data base, there is something we should work with a third party. but as far as we could see it, more than half of those complaints related to

nonacceleration. [ speaking japanese ] >> translator: so we would like to continue to look at these one by one. we want to ask nhtsa to give us the vin number of certain event. we're deploying the s.w.a.t. team and sending the team to the site of the ua. we would like to use that data. we want to, you know, do various things and we really want to work on this. >> we are very eager to find out. >> thank you very much, senator dorgan.

>> thank you very much, mr. chairman. as can you imagine, you have a lot of loyal customers in minnesota and group that hasn't been mentioned today, a lot of loyal auto dealers who have been, of course, hurt by this as well and are doing everything to meet the requirements of the recalls. and want to do that. do you know, mr. inaba, how many vehicles have been recalled so far and how many remain to be fixed? >> well, talking about two recalls related to this unintended acceleration, we have about in total of 5.3 million customers. and we have done more than 1 million. we are doing them as quickly and as conveniently as possible with the dealers really fully backing us up. and i'm really they are doing. >> and do you know how many remain to be done? >> obviously, there are about 4 million. and we like to do it as quickly

as possible. >> okay. thank you. and then i -- my major focus this morning was, as worthy as a discussion is about what you're going to do to fix these cars, which is incredibly important, how are you going to deal legally with some of the victims and their families and things like that. but my focus is on our own government and their relationship with toyota and other industry players and how we do a better job of regulating. so that when we go forward, we're going to be able to do a better job. and so i was obviously concerned by this power point presentation that was -- came out in the last we week. where it talks about wins for toyota. i understand businesses have to do well and get wins and move ahead. but it seems these were wins for toyota but arguably losses for american customers. and this was the document that was presented to you by toyota's washington, d.c., office. is that correct? >> that is correct.

and what does it mean when they talk about wins for toyota here? >> first of all, this is only after a few days of my arrival to the united states. and this is the very first orientation material by our washington office. and, to be honest, i do not recall the meeting or the data in any depth, and i reread it again and i'm very embarrassed. first of all, this tone of this information is so inconsistent with our company guiding principles and also my beliefs. and, of course, you can expect the first time president coming to the office and they try to impress me. and let me -- may i? and i think this is somewhere, you know, small sample, big

universe. i want to believe that. but at the same time, this is my job. if there is any element of this thinking around any organization somewhere, my job is to really rectify it and to make sure this is not going to happen anymore. >> i don't know if you've talked to anyone since. you know what they mean when they say negotiated recall on camry regarding sa, which is acsemeration, which saved 100 plus with no defect found. was that that the nhtsa hadn't found a defect? >> i don't know. i mean, i don't know the basis of calculation of $100 million or so. or using a word negotiation is the wrong one, in my opinion. it should be a discussion. and, therefore, i think there is an element that i have to really go into and then rectify it.

>> and do you know if the people involved with whom toyota was negotiating, one of my concerns is right now there are some nhtsa employees that are in toyota's washington office. were any of those employees involved in this -- former employees involved in this negotiation? >> well, they are -- i must say, window person. day-to-day basis and discuss issues with nhtsa. that's correct. and two of them came from nhtsa. one 15 years ago and second one is six years ago. i know them personally by now. and they are of very high integrity. i really respect their expertise, and we value them. not their influence, but their experti expertise. and i think also they came from a very -- it's hard to imagine they can exercise any strong influence rather than expert. and i really value the work they

are doing. >> i understand under the current rules this wasn't like a violation but they were involved in these negotiations then. >> discussions. >> mr. ditlow, i went through earlier with secretary lahood and administrator strickland some ideas on how we can fix this going forward. i want to throw them out there again because that's what i'm most interested in. fixing the relationship between the government regulators where our public and my two customers and many more in minnesota who had these acceleration events and one was so bad for six miles that it burned her hub caps, the brakes did. fortunately, both of them survived. the thing i threw out there was the resource issue, the procedural tools for nhtsa so that they maybe can move things quicker when they want to do their own recalls. the fines which are, in this case, maybe as much as this cap may be something like $16 million compared to the $100 million saved. that's right up here on the chart. it seems to be not a