Toyota's Massive Recall Snowballs
AP, file
Toyota's massive recalls over problem gas pedals in the U.S. are being extended to China and Europe, the latest blow to the world's top automaker as it struggles to salvage its safety reputation.
The announcements Thursday come after the company earlier this week said it was suspending U.S. sales and production of eight models - including the Camry, America's top-selling car - to fix faulty pedals that could stick and cause acceleration without warning.
Toyota Motor Corp. also announced an additional recall of 1.09 million vehicles in the United States covering five models - 2008-2010 Highlander, 2009-2010 Corolla, 2009-2010 Venza, 2009-2010 Matrix, and 2009-2010 Pontiac Vibe.
Toyota dealers across the U.S. have been swamped with calls from concerned drivers but had few answers as the recalls snowballed.
A week before the sales suspension, Toyota issued a U.S. recall for the same eight models, affecting 2.3 million vehicles. In late 2009 it recalled 4.2 million vehicles amid concerns that floor mats could bend across gas pedals, causing sudden acceleration.
Toyota has insisted the problem of sudden, uncontrolled acceleration was "rare and infrequent" and said dealers should deal with customers "on a case-by-case basis." But drivers of Toyotas and those who share the road with them were left with uncertainty.
Toyota has informed Chinese authorities it will start a recall in February for 75,500 RAV4 sport utility vehicles that were manufactured in China between March 2009 and January 2010, said Toyota spokeswoman Ririko Takeuchi.
They use the same problem parts in accelerators that caused the recent spate of massive recalls in the U.S., she said.
Read more about the Toyota recall at CBSNews.com:
Ford Stops Some China Vehicle Production
Toyota Part-Maker Gets Unwanted Spotlight
Toyota Took Short Cuts in Drive to Top
Toyota's Massive Recall Snowballs
Toyota Recalls 1M More Vehicles
Toyota Recall Not Result of Simple Glitch
GM Tries to Lure Wary Toyota Owners
Toyota's Sales Halt Deals Blow to Image
In Europe, Toyota is still unsure how many vehicles are affected by the problem with pedals that are manufactured by CTS Corp., based in Elkhart, Indiana.
Colin Hensley, a manager at the car maker's European operations, said the company is checking how many European models use the parts involved in the latest U.S. recall.
"Toyota is making every effort to address this situation for our customers as quickly as possible," its European arm said in a statement.
The sales suspension in the U.S. - Toyota's biggest market - could endanger the company's fledgling earnings recovery. Toyota only returned to the black for the July-September quarter with net income of $241 million after three straight losing quarters.
In response to the recalls, General Motors General Manager of Retail Sales Steve Hill said Wednesday GM is offering interest-free loans and other incentives to Toyota owners who may want to get rid of their cars.
The Detroit automaker is offering offer zero percent financing for 60 months on most models. It also will offer $1,000 to Toyota owners toward a down payment on a GM vehicle and up to $1,000 to help to pay off current leases early. The offers run through the end of February.
Investors continued to dump Toyota shares Thursday. Toyota dropped 3.9 percent to 3,560 yen even as the benchmark Nikkei 225 stock average gained 1.6 percent to close at 10,414.29. Toyota tumbled 4.3 percent Wednesday.
"It is still uncertain how this recall problem will affect Toyota's profits. But investors are worried it could really pressure the company's overall earnings," said Masatoshi Sato, market analyst at Mizuho Investors Securities Co. Ltd.
Fitch Ratings warned Thursday the massive recalls and sales suspension could dent Toyota's recovery, especially in the vital U.S. market.
Fitch placed Toyota's credit rating of 'A+' on watch negative, meaning the rating could be downgraded. That could increase the interest rate Toyota pays on any debt.
"The recalls and sales and production suspension cast a negative light on Toyota's reputation for quality, just as the company emerges from an unprecedented downturn in the auto industry," Fitch said in a statement.
Toyota spokesman Hideaki Homma said Toyota decided to recall more vehicles in the U.S. due to the risk of accelerator pedals becoming stuck in floor mats.
Toyota said in a statement it will fix or replace the accelerator pedals for the recalled vehicles to avoid the risk of floor mat entrapment. The company said it will replace floor mats as well for the latest recalled vehicles.
In March of 2007, Toyota started getting reports of gas pedals being slow to rise after being depressed for acceleration. Engineers fixed the problem in the Tundra pickup early in 2008.
But troubles persisted in other models, eventually leading to last week's U.S. recall and the plans to suspend sales and shut down of six factories while Toyota tries to fix the problems.
CBS/ AP The announcements Thursday come after the company earlier this week said it was suspending U.S. sales and production of eight models - including the Camry, America's top-selling car - to fix faulty pedals that could stick and cause acceleration without warning.
Toyota Motor Corp. also announced an additional recall of 1.09 million vehicles in the United States covering five models - 2008-2010 Highlander, 2009-2010 Corolla, 2009-2010 Venza, 2009-2010 Matrix, and 2009-2010 Pontiac Vibe.
Toyota dealers across the U.S. have been swamped with calls from concerned drivers but had few answers as the recalls snowballed.
A week before the sales suspension, Toyota issued a U.S. recall for the same eight models, affecting 2.3 million vehicles. In late 2009 it recalled 4.2 million vehicles amid concerns that floor mats could bend across gas pedals, causing sudden acceleration.
Toyota has insisted the problem of sudden, uncontrolled acceleration was "rare and infrequent" and said dealers should deal with customers "on a case-by-case basis." But drivers of Toyotas and those who share the road with them were left with uncertainty.
Toyota has informed Chinese authorities it will start a recall in February for 75,500 RAV4 sport utility vehicles that were manufactured in China between March 2009 and January 2010, said Toyota spokeswoman Ririko Takeuchi.
They use the same problem parts in accelerators that caused the recent spate of massive recalls in the U.S., she said.
Read more about the Toyota recall at CBSNews.com:
Ford Stops Some China Vehicle Production
Toyota Part-Maker Gets Unwanted Spotlight
Toyota Took Short Cuts in Drive to Top
Toyota's Massive Recall Snowballs
Toyota Recalls 1M More Vehicles
Toyota Recall Not Result of Simple Glitch
GM Tries to Lure Wary Toyota Owners
Toyota's Sales Halt Deals Blow to Image
In Europe, Toyota is still unsure how many vehicles are affected by the problem with pedals that are manufactured by CTS Corp., based in Elkhart, Indiana.
Colin Hensley, a manager at the car maker's European operations, said the company is checking how many European models use the parts involved in the latest U.S. recall.
"Toyota is making every effort to address this situation for our customers as quickly as possible," its European arm said in a statement.
The sales suspension in the U.S. - Toyota's biggest market - could endanger the company's fledgling earnings recovery. Toyota only returned to the black for the July-September quarter with net income of $241 million after three straight losing quarters.
In response to the recalls, General Motors General Manager of Retail Sales Steve Hill said Wednesday GM is offering interest-free loans and other incentives to Toyota owners who may want to get rid of their cars.
The Detroit automaker is offering offer zero percent financing for 60 months on most models. It also will offer $1,000 to Toyota owners toward a down payment on a GM vehicle and up to $1,000 to help to pay off current leases early. The offers run through the end of February.
Investors continued to dump Toyota shares Thursday. Toyota dropped 3.9 percent to 3,560 yen even as the benchmark Nikkei 225 stock average gained 1.6 percent to close at 10,414.29. Toyota tumbled 4.3 percent Wednesday.
"It is still uncertain how this recall problem will affect Toyota's profits. But investors are worried it could really pressure the company's overall earnings," said Masatoshi Sato, market analyst at Mizuho Investors Securities Co. Ltd.
Fitch Ratings warned Thursday the massive recalls and sales suspension could dent Toyota's recovery, especially in the vital U.S. market.
Fitch placed Toyota's credit rating of 'A+' on watch negative, meaning the rating could be downgraded. That could increase the interest rate Toyota pays on any debt.
"The recalls and sales and production suspension cast a negative light on Toyota's reputation for quality, just as the company emerges from an unprecedented downturn in the auto industry," Fitch said in a statement.
Toyota spokesman Hideaki Homma said Toyota decided to recall more vehicles in the U.S. due to the risk of accelerator pedals becoming stuck in floor mats.
Toyota said in a statement it will fix or replace the accelerator pedals for the recalled vehicles to avoid the risk of floor mat entrapment. The company said it will replace floor mats as well for the latest recalled vehicles.
In March of 2007, Toyota started getting reports of gas pedals being slow to rise after being depressed for acceleration. Engineers fixed the problem in the Tundra pickup early in 2008.
But troubles persisted in other models, eventually leading to last week's U.S. recall and the plans to suspend sales and shut down of six factories while Toyota tries to fix the problems.
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That's not the point. The issue here is that late last year Toyota blamed the floor mat for the problem and the company argued with the government for months before finally admitting that the "bad floor mat" problem was just a ruse to divert attention from the real problem.
"...This is a domestic parts issue and its not uncommon for parts not to be up to snuff...."
The same company made gas pedals for Ford and Nissan but those pedals are of a different spec and they do not exhibit the problem. It's not a problem with the pedal manufacturer it's a problem with the design specs Toyota had the manufacturer use to make the pedals.
"...The media has way over blown the significance of this problem as they always do...."
No they have not, the media has UNDERBLOWN the significance for months. Any problem with the gas pedal or brakes or steering in a car is a major, major, major problem and cannot be overblown. The Ford "exploding gas tank" problem was way overblown - even 20/20 when they tried recreating the problem admitted that they had to strap explosives to the bottom of the truck during filming because after T-boning 3 trucks with full side-mount gas tanks they were not able to get the truck to explode and they were running out of trucks! (needless to say this detail came out months after they ran the story)
"...It saddens me that some of these people did not have to die if they had simply shut the ignition off? Why are we so stupid??..."
Why are you sad that (in your words) stupid people died? Uh huh.
Well the problem here is a lot of the accidents happened so fast there was no time to turn off the ignition. One lady was pulling into a parking spot, car was going about 2MPG and the pedal stuck - by the time she turned off the ignition the car was 5 feet in front of the parking spot smacked into a tree. Another guy was coming to a stop at a light and by the time he got his foot under the pedal and pulled it up he was in the intersection and was t-boned. This isn't like you seem to think were they were just driving along the highway with plenty of space in front. And in any case most of the reports didn't involve an accident they were just people reporting the problem.
You sound like a Toyota owner hoping that your resale value of your roach coach doesen't drop too much.
It saddens me that some of these people did not have to die if they had simply shut the ignition off? Why are we so stupid??
Or like my 2007 Toyota Matrix built in Oxnard, California with 63% American parts content?
The number one selling Ford is the Focus made 100% in Turkey and Brazil.