By Jeff Green and Alan Ohnsman Feb. 26 (Bloomberg) — Toyota Motor Corp. in 2008 succeeded in blocking a formal recall of Sienna minivans linked by U.S. regulators to 98 injuries caused by collapsing liftgates, according to company and U.S. documents. Instead of issuing a recall under the U.S. Safety Act, Toyota sent letters to owners of 196,222 Sienna vans offering to replace struts on the liftgates as part of a “safety improvement campaign” without acknowledging a defect. The National Highway Traffic Administration accepted the response and stopped pressing for a costlier recall, agency documents show. The Sienna case was among the “wins” cited by the automaker’s Washington office in a memo obtained by a congressional panel investigating the recalls of 8 million Toyota vehicles worldwide for defects that could cause unintended acceleration. The claimed wins saved Toyota $255 million, including $100 million previously reported for less extensive responses to the acceleration issue, according to the memo. Toyota executives this week underwent two days of congressional hearings during which lawmakers said there was a pattern at the company of failing to respond promptly and adequately to reported safety problems. “Toyota’s own internal documents indicate that a premium was placed on delaying or closing NHTSA investigations, delaying new safety rules and blocking the discovery of safety defects,” Representative Edolphus Towns , a New York Democrat and chairman of the House Committee on Oversight and Government Reform, said at a hearing of the panel two days ago. Prius, Tacoma Yoshimi Inaba , Toyota’s North American president, testified at the hearing that the Washington office’s memo was presented to him when he assumed his current position last July. The presentation also cited Toyota’s success in limiting responses to reports of defective Prius headlights and of two separate defects in Tacoma pickups, one involving rust and the other unexpected acceleration. NHTSA opened an investigation of the Tacoma on Feb. 16 as part of a broader probe of vehicles that may have sudden acceleration defects and haven’t been recalled. Jim Wiseman , Toyota’s vice president for North American corporate communications, said the Washington briefing materials “didn’t represent the views of the company.” Wiseman said he wasn’t aware of any pending recalls or defect issues. “But the effort going forward is to pursue maximum openness,” he said. “We want to get everything out in the open.” Olivia Alair , a spokeswoman for the Transportation Department, which oversees NHTSA, disputed the contention that Toyota had succeeded in the Sienna matter. Struts Replaced “In a letter to the agency, Toyota agreed to replace the struts free of charge to the consumer to address the problem,” Alair said. “It is unclear why this safety recall was touted as a ‘win’ for the manufacturer.” As in at least four unrelated cases in which Toyota warded off U.S. recalls involving unintended acceleration allegations, a former NHTSA employee hired by the company took part in negotiations with the agency over handling the reported Sienna problems. “Although Toyota is willing to identify this campaign as a safety recall in the owner communication about the campaign, Toyota has not determined that the condition described above is a ‘safety-related defect’ within the meaning of the federal vehicle safety laws,” Toyota Vice President Christopher Tinto , the former NHTSA employee, wrote in a May 30, 2008 letter to the agency. NHTSA agreed to the lesser classification in a June 25, 2008, report that cited the Toyota letters to owners. Agencies’ Resources “Based on these actions, the agency had decided to close the investigation,” the report said. “While Toyota has not made a decision that the recalled vehicles contain a safety- related defect, in view of the recall, further use of the agencies’ resources does not appear to be warranted.” Toyota’s letter was sent to owners of Siennas for model years 2004 to 2006. As of September 2009, the last time Toyota submitted an update to NHTSA, 98,582 vehicles, or about half of the total affected, had been inspected and repaired. Among those injured were a 50-year-old resident of Illinois who suffered a cervical sprain and nerve damage requiring more than $50,000 in medical bills; a 68-year-old Utah man who incurred an injury to his rotator cuff and damage to his knee; and a 51-year-old California resident who had a concussion while standing under his liftgate, according to NHTSA reports . Striking Owner’s Head The first injury filing came on April 10, 2006, when NHTSA reported a “2004 Toyota Sienna liftgate closing automatically and striking the owner’s head,” according to a search of complaints in the agency’s database. The agency eventually tallied 410 complaints with 98 injuries and an additional 12,452 warranty repairs conducted by Toyota prior to the safety campaign, according to a June 2008 report. In a January 2008 letter to Toyota, the agency said the liftgates might fall with the strength of 140 to 300 pounds if gas leaked from the struts, which NHTSA said were showing “a steady increase in failures.” NHTSA at that time asked Toyota to initiate a safety recall , saying it had identified 70 injuries. Toyota initially rejected the request because it had already agreed to an extended warranty on the parts. The six- year warranty notice didn’t warn of a risk of injury, according to a copy submitted to NHTSA by Toyota. The automaker also disputed the injury reports in the NHTSA letter as not being as serious as initially reported. Fix ‘Exacerbated’ Toyota’s attempts to change the design of the liftgate strut started as early as December 2003, for 2004 model-year vehicles, according to NHTSA documents. The first three fixes were “mixed,” as the first fix “exacerbated” the problem, the agency said. The final change, in December 2006, was deemed successful and included in minivans starting in model year 2007. The NHTSA database shows at least two reports of injuries to owners of 2007 Sienna minivans that were also made since then because of hatch failures. The owner of a 2010 Sienna minivan also complained to NHTSA on Nov. 15 that his liftgate has hit him and his family members on their heads and shoulders by closing unexpectedly. To contact the reporters on this story: Jeff Green in Southfield, Michigan, at jgreen16@bloomberg.net ; Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net
