Tough Times for Toyota

Making Lexus engines

While you were all pigging out over Christmas, Toyota has been taking it in the teeth, particularly from the L.A. Times in a scathing piece. The world’s largest carmaker is accused of covering up vehicle defects with impunity for years. It’s not just the floormat issue and recall, which everyone in the world now knows about. Major safety cover-ups are charged, including: sudden acceleration in various vehicles for nearly ten years, payoffs to owners of such vehicles, steering defects, and accusations of hiding evidence from courts, lawyers, and the NHTSA.

The Times’ lengthy indictment documents numerous specific instances, among them several where owners of sudden-acceleration cars refused to drive them again and returned them to dealers. The cars were bought back under the lemon law—but then resold to other people!

A big part of the scandal covers the cars’ electronic black boxes, or electronic data recorders (EDRs), whose data can be read by only one (1) device in the U.S. The Times put several questions regarding this situation to the company. Their responses are here. The company has of course denied any allegations of a cover-up, but the NHTSA says, “The matter is not closed.”

Toyota is also getting a blast from none other than Hugo Chavez, boss of Venezuela, who recently ranted about not getting enough 4x4s for public transport and use in poor, hard-to-access rural areas. The righteous ruler was angry and said if the company didn’t choose to make these particular cars, then

We must force them. And if they don’t, then they should leave and we’ll bring another company in…. The Chinese want to come and they make ‘rustic’ models.

The boss then told his trade minister,

You tell the people at Toyota that they have to produce this model and we are going to impose a quota, and if they don’t meet it, we will punish them.

Meaning, expropriate the Toyota manufacturing plant, as the government has done with other industries. The company’s spokesman hastened to say it was all a misunderstanding, that they had quit making the Land Cruiser 70 in 2007 and had duly informed the government about it. Venezuela has been hit hard by the recession, especially in the automotive area, where sales are down 40 percent from November of last year.

And finally, Toyota is requesting the U.S. International Trade Commission to dismiss yet another suit by Paice LLC for patent infringement. The latter company already won one contest, declaring that Toyota stole its ideas for the “Hybrid Synergy Drive” powertrain as used in the Prius. Toyota says they are paying a royalty to Paice for every hybrid sold, and enough is enough.

My goodness, we don’t want to see the company spend all its profits (what little there are these days) on legal fees. Let them keep building and developing great cars—like the FT-86 tgriffith just reported on. But when big companies get too fat and complacent, they sometimes get, well, high-handed. If the Times’ stories are true, we probably haven’t heard the last of their troubles.

Let us have your opinion of Hugo Chavez’ possible expropriation of Toyota auto factories in Venezuela.



  1. You know, having stricter licensing requirements in the US would be a fantastic idea. Where else can you operate multi-thousand dollar machinery with such minimal training?

  2. A non issue for Audi almost killed the brand. Its a shame the Toyota thing isn’t getting more coverage. The Audi unintended acceleration issue proved the be drivers pressing on the gas and thinking it was the brake. Possibly this was a poor design, but mechanically it was not the cars fault. As for the conspiracy talk, I’m guessing you were a big fan of “Who killed the electric car?” movie as well, eh?

  3. I don’t believe the question should be focused on expropriation but rather the coverups that all manufacturers use to save their “good” name. Hell, expropriation has occurred all through history and it happens here regularly. The process is called eminent domain. Hotels, cities, railroads, casinos do it all the time. So what is the big deal with that??

    In my judgement the issue here should be the coverups. In the late 80’s I was forced to sue Chrysler because of sudden acceleration syndrome in my Jeep Commanche. The dealer informed Chrysler that he did every diagnostic test in his arsenal and could not explain it. He also told Chrysler that it happened to him in my car during diagnosis. Chrysler stonewalled the issue and wouldn’t do anything about it until I was forced to sue.

    This stonewalling has been going on way before Nader’s “Unsafe at any speed” was published. You all know the story with that so I will spare you the gory detailing of massive coverups and stonewalling by the Big 3.
    Also don’t forget the devious scheming and investigations the Big 3 paid to try to “get” something on Nader. So why should the great Toyota not do the same? As to Chavez, really, who cares what he says??

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