Video: Toyota in damage-control mode

  1. Closed captioning of: Toyota in damage-control mode

    >> mike viqueira, thanks.

    >>> until just days ago toyota enjoyed one of the best reputations in the car business, with sales to match. now the company has a huge problem on its hands, potentially dangerous accelerator problems, and the recall of millions of vehicles. tonight toyota is scrambling to fix the problem and contain the damage. nbc 's george lewis reports.

    >> reporter: it's images like this that toyota dreads. a brand new camry flips over in a ditch in louisville, kentucky after the driver, todd allen, said it accelerated suddenly and went out of control. he's in a hospital intensive care unit.

    >> when they went to stop, it just accelerated and they just flew off the cliff.

    >> reporter: toyota ran full-page ads in sunday newspapers saying "sticking accelerator pedals have occurred in some of our vehicles. we believe we are close to announcing an effective remedy." for rhonda talbot that remedy can't come soon enough. she's had her toyota camry a year now and says she's been in seven accidents.

    >> i have my foot on the brake, and i'm coming to a slow stop. but for some reason the car then lurches forward.

    >> reporter: so for the time being she's leaving her toyota in the driveway. the experts say that if you get into a situation like rhonda's the best thing to do is stomp on the brake with both feet, shift the car into neutral, then try to steer out of the way of traffic and come to a stop and, finally, turn off the ignition. nbc 's ian williams reports from tokyo that toyota is feeling the heat .

    >> reporter: there has been no cars recalled here in japan, but there has been damage. damage to the pride and reputation of a company widely regarded as a national icon. toyota built that reputation on the quality of its cars. and the news from the u.s. has shocked many people here, who question whether toyota sacrificed quality in the rush to become the world's biggest carmaker.

    >> reporter: a crisis management expert says toyota doesn't just have a quality control problem, it has a transparency problem.

    >> customers have a right to wonder if the cars are safe because toyota has not been as forthcoming as they should have been in telling the customers what's going on.

    >> reporter: this as the horror stories about toyota 's acceleration problems are also accelerating. george lewis , nbc news, los angeles .

    >>> we have this program note .

updated 1/31/2010 8:36:25 PM ET 2010-02-01T01:36:25

Toyota has launched a media campaign to bolster its reputation for quality as nervous customers confront dealers across the country about faulty gas pedal systems.

Crisis-management experts said Sunday that the recall of millions of cars and trucks isn't the Japanese auto maker's only problem: its message to Toyota owners — delivered in full-page ads Sunday in 20 major newspapers — isn't as clear and reassuring as it needs to be.

On Monday, the head of Toyota's North American sales division, Jim Lentz, is scheduled to appear on NBC's The Today Show to detail the company's plans for a fix. Federal regulators have approved Toyota's plan to start sending parts to dealers in the coming days.

Toyota dealers over the weekend said there has been a noticeable drop in customer traffic and sales, though they have faith that customers loyal to the brand before last week's recall will not abandon it altogether. Dealers selling U.S. brands have seen more Toyota drivers in their lots than usual, but for now those visits haven't translated into many new customers.

Toyota's black-and-white ads Sunday characterized the halt in sales and production as a "temporary pause" to put customers "first." The ads don't give details on how the pedals will be fixed or when customers can expect a remedy.

The company has said the recall of about 4.2 million cars and trucks is related to condensation that builds up in the gas pedal assembly and can cause the accelerator to get stuck. Dealers say the fix involves slipping a shim into an area where springs push the gas pedal back to its resting position after a driver has eased off the gas. Toyota has not commented on the repair.

"They are trying to do the right thing," said Alexander Edwards, president of automotive research group Strategic Vision, of the ads. "But what's going on isn't stated very clearly and that causes more uneasiness with customers."

Larry Smith of the Institute for Crisis Management in Louisville, Ky., said "The ads are intended to buy Toyota a bit of time, to ask people to give them a chance."

But what matters now is "how Toyota expresses its plan and executes the repairs," Smith said.

Cutting the company some slack, Smith said the ads likely had to be placed on Friday, before Toyota received the go-ahead for its planned fix from federal regulators.

"They are a really good company, and there is no reason they should not snap back from this," Smith said.

At Earl Stewart Toyota in North Palm Beach, Fla., sales initially dropped off after the recall announcement but began to rebound by the weekend. General manager Stu Stewart said he'd even sold some cars in recent days that have the faulty gas pedal system. Customers will just have to wait for the cars to be fixed before picking up their new vehicles, Stewart said.

At Toyota World of Lakewood, N.J., sales manager Joe Glidden said they had received many calls from customers with questions about the recalls. But he said customer traffic had only slightly decreased since the gas pedal recall was announced Jan. 21.

Customer Herb Jackson, shopping at the Lakewood showroom for a new Prius gas-electric hybrid — which is not one of the vehicles that was recalled — said he's still confident in the world's biggest automaker.

"I don't plan on changing horses," said Jackson, who has owned many Toyotas over the years.

Other customers are checking out Toyota's competition, however.

In Pittsburgh's northern suburbs, Richard Bazzy, owner of two Ford dealerships, saw increased traffic on Saturday and noticed more Camrys and Corollas driving onto his lots. But he also said it has yet to turn into increased sales from Toyota customers.

Bazzy said the Toyota troubles should get customers to at least consider Detroit's improved cars.

Industry analysts expect Ford to be among the beneficiaries of Toyota's troubles because some of its models have recently received good quality scores from third parties such as Consumer Reports magazine.

Rob Larson, a sales manager at Larson Ford in Lakewood, said he hadn't seen an influx of disaffected Toyota customers so far. But he expects to see them soon as more people learn about incentives being offered by Ford, such as $1,000 to Toyota, Lexus, Scion, Honda or Acura drivers who trade in vehicles or have leases expiring by June 30. GM and Chrysler are offering similar deals to lure Toyota customers.

At Hyundai Giant in New Port Richey, Fla., CEO Scott Fink said dealers are having trouble figuring trade-in values on Toyotas, wondering if they will drop even after they are repaired.

He said it's too early to tell if there will be a mass exodus from Toyota.

The recall widened beyond Toyota over the weekend. France's largest automaker, PSA Peugeot Citroen, said it was recalling 100,000 cars across Europe to change accelerator pedals on two models designed and produced in a joint venture with Toyota. The recall is a "preventive" measure, Peugeot said, adding that there has been no evidence of accidents or safety problems linked to the pedals.

The National Highway Traffic Safety Administration said on its Web site that it opened an investigation last Tuesday into CTS Corp., the manufacturer that supplied the faulty gas pedals to Toyota. The agency wants to find out whether CTS notified other gas pedal customers of the recall and if other automakers have received reports of similar problems with the pedals.

The pedal recall is separate from another recall involving floor mats that can bend and push down accelerators. The two recalls combined affect more than 7 million vehicles worldwide. While the multiple recalls, investigations and image troubles are disheartening for Toyota owners, for now many still remain loyal.

"They're going to be fine," Stacey Krupski of State College, Pa., said as she parked her Toyota Saturday. "And I would most likely guarantee the fact that my next car will still be a Toyota."

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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