Toyota Part-Maker: Fix Is in the Works

Updated at 2:01 p.m. EST

The company that makes the gas pedal systems implicated in Toyota's big recall says it is working with the automaker on a fix.

CTS Corp. officials say they have ramped up production at three factories to manufacture redesigned pedals. The pedals are meant to solve problems with condensation that Toyota has said can cause them to react slowly when a driver presses on the gas. In rare cases, the gas pedals can get stuck.

CTS says it is also working with the Japanese automaker to find a potentially quicker repair for vehicles already on the road.

Toyota spokesman Brian Lyons said the automaker has not decided if the new pedals will go to dealers or factories.

He said the company has also not decided whether it will repair the defective pedals or replace them. Toyota engineers are working on ways to fix the pedals, he said.

Lyons says the company's No. 1 priority is figuring out how to repair the largest number of vehicles in the shortest amount of time.

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Repairs to the pedals still have to go through the normal durability testing to make sure they work properly, Lyons said. He would not estimate how long it will take for Toyota to decide on repairing versus replacement, nor would he say how long it will be until cars and trucks are fixed.

Toyota officials were meeting Thursday with the National Highway Traffic Safety Administration to discuss a potential fix for the recalled vehicles.

Since the initial recall last October, the company has held discussions with the government over the accelerator problem, and NHTSA was expected to review a possible remedy for the latest recall.

Earlier this week, Toyota halted sales of eight models due to problems with the gas pedal system. That followed a recall last week of 2.3 million trucks and cars, including Camrys and Corollas.

The recall and production halt have put CTS in an uncomfortable spotlight.

Like most companies that make thousands of parts in automobiles, CTS was virtually unknown to the average car buyer. The Elkhart, Ind.-based company found itself the focus of intense scrutiny over problems with their gas pedals, which were manufactured at a plant outside Toronto.

The parts supplier tried to tamp down concerns over its accelerators, saying it knew of fewer than a dozen cases of problems in Toyota vehicles. It also said there were no reports of pedals getting stuck, though Toyota warned federal safety officials last week that could occur in "the worst case."

The Toyota recall hit one of CTS's bigger automotive supply businesses. The company makes gas pedal systems for a variety of automakers, including Toyota, Honda, Nissan and Ford.

On Thursday, Ford announced it was halting production on the diesel version of its Transit Classic built by a Chinese joint venture because it contains accelerators built by CTS Corp.

But the problems are limited to Toyota models, and spokesmen for Nissan and Honda said their CTS-produced pedals are based on different designs.

And Ford has reported no problems with the Transit Classic.

CTS said the Toyota business comprises only about 3 percent of its overall sales. The pedals were made to Toyota's design specifications, the company said.

Employees at the CTS plant in Mississauga, Ontario, where the Toyota accelerators are manufactured, would not comment Wednesday. Inside the building lobby was a 2005 trophy that read "Toyota Excellence." CTS was also recognized by Toyota in 2007 for "outstanding quality performance" in the prior year at the Canadian plant, according to a company press release.

CTS manufactures auto parts in Elkhart, Canada, Scotland, the Czech Republic, Mexico, Taiwan and China.

Only part of the company's 2008 sales came from automotive work, with the rest split between equipment for sectors like communication, aerospace, medical and defense.

CTS on Wednesday reported lower fourth-quarter earnings of $4.1 million, or 12 cents per share. While its automotive unit, which includes the gas pedal business, saw sales grow 44 percent in the quarter, total sales fell 19 percent to $133 million.

The safety recall also includes the Pontiac Vibe, a General Motors Co. compact car that was outfitted with the same CTS gas pedal and made at a California plant jointly run by CTS and GM.

GM spokesman Tom Wilkinson said about 99,000 Vibes were subject to the recall. GM had already begun closing down the Pontiac brand, and only two Vibes remain unsold, Wilkinson said.