Image: Toyota President Akio Toyoda bows
Kim Kyung-hoon  /  Reuters
Toyota Motor Corp. President Akio Toyoda bows at the start of a news conference in Nagoya Friday where he apologized for a massive global recall that has tarnished the company's reputation.
updated 2/5/2010 6:26:03 PM ET 2010-02-05T23:26:03

Toyota's president emerged from seclusion Friday to apologize and address criticism that the automaker mishandled a crisis over sticking gas pedals. Yet he stopped short of ordering a recall for the company's iconic Prius hybrid for braking problems.

Akio Toyoda, appointed to the top job at Toyota Motor Corp. last June, promised to beef up quality control, saying, "We are facing a crisis."

Toyoda, grandson of the company's founder, said he personally would head a special committee to review checks within the company, go over consumer complaints and listen to outside experts to come up with a fix.

"I apologize from the bottom of my heart for all the concern that we have given to so many customers," said Toyoda, speaking at his first news conference since the Jan. 21 global recall of 4.5 million vehicles.

Toyota's failure to stem its widening safety crisis has stunned consumers and experts who'd come to expect only streamlined efficiency from a company at the pinnacle of the global auto industry.

"Toyota needs to be more assertive in terms of providing consumers comfort that the immediate problem is being addressed ... and that it can deal with these crises," said Sherman Abe, a business professor at Hitotsubashi University in Tokyo.

It took prodding from the U.S. government for Toyota to recall the vehicles, about half of them in North America, for gas pedals that can stick and cause sudden acceleration.

Asked if he should have acted more quickly, Toyoda replied in hesitant English: "I will do my best."

Also on Friday, Safety Research and Strategies Inc. of Rehoboth, Mass., issued a report saying that Toyota and the government must look closely at vehicle electronics for a cause of sudden acceleration.

According to the report, there is evidence that Toyota and National Highway Traffic Safety Administration have not identified all causes of the problem, which they have blamed on sticky accelerators and floor mats that can bend on top of gas pedals and press them down.

NHTSA earlier this week began studying whether automobile engines could be disrupted by electromagnetic interference caused by power lines or other sources.

Safety Research and Strategies, which has received funding for research on Toyotas from five law firms, said the report released Friday was not paid for by attorneys with interest in the Toyota problems.

"Absent a mechanical cause, the automaker and the regulators must look more closely at the vehicle control systems, including the electronic throttle control design and the the associated sensors," the report says.

Biggest auto recalls

Toyota has said it investigated for electronic problems and failed to find a single case pointing that direction. The company says its systems have failsafe mechanisms.

Toyoda was the second successive Toyota president to offer an apology for defects in the company's cars. The first, Katsuaki Watanabe, shocked a news conference in 2006, bowing low to the group before promising to improve quality.

Toyoda bowed as he greeted reporters, but not in apology. He told the hastily called news conference that the company had not decided what to do about problems in the braking system of the Prius gas-electric hybrid. The high-mileage, low-pollution car is a leader in its field and a symbol of Toyota technology.

Toyoda and Shinichi Sasaki, who oversees quality control, offered no new explanations for the braking problem.

Prius drivers in Japan and the U.S. have complained of a short delay before the brakes kick in — a flaw Toyota says can be fixed with a software programming change. The lag occurs as the car is switching between brakes for the gas engine and the electric motor — a process that is key to the hybrid's increased mileage.

Toyota spokesman Mike Michels said Friday the company continues to weigh options on how to handle repair of the problem, and it is communicating with the National Highway Traffic Safety Administration.

Among the options are a service campaign in which Toyota would notify owners to bring their cars in for repairs, or a full-fledged safety recall. Michels said he could not say when Toyota would make a decision.

The automaker said it fixed the programming glitch in Prius models that went on sale since last month, but has done nothing on 270,000 Prius cars sold last year in Japan and the U.S.

The lack of action has raised questions about whether there is a bigger problem.

Sasaki denied any cover up.

"We have nothing to hide. We have just been investigating," he said.

Sasaki said complaints were climbing by the day. The company was checking into them, one by one, and test-driving customer's cars that had developed problems, he said.

But he appeared to view the problem as minor, occurring only at slow speeds.

"We don't see it as critical because if you push on it a bit, then the car will stop," he said of the brake pedal.

Jeff Kingston, director of Asian Studies at Temple University in Tokyo, said Toyota may be trying to avoid the large costs involved with a recall. The automaker has already said repairs for the gas pedal recall and lost sales will cost it $2 billion.

"Toyota is saying ... there is no real problem yet also announced they fixed the problem as of January," he said. "Odd, given that there is no problem to fix."

There is also high level government concern in Japan about Toyota's quality fiasco.

Transport Minister Seiji Maehara, who oversees auto regulation, has urged Toyota to consider a recall for the brake problem.

In the past, the world's No. 1 automaker has moved quickly to address problems and the handling of its most recent problems has experts puzzled.

"There's a sharp contrast with previous times in terms of handling these kinds of situations," said Koji Endo, managing director of Advanced Research Japan. "I really don't know why — if it was the change in management or if the PR office was responsible or what."

Some experts speculated a degree of arrogance or corporate insularity may have clouded the company's judgment this time around.

"Toyota is the top of the totem pole," said Kenneth Grossberg, a marketing professor at Waseda University in Tokyo. "They don't have to learn from anyone else."

Grossberg noted that Japanese companies "have a problem with rapid decision making."

Biggest auto recalls

"Until they get everyone to sign on, it takes forever," said Grossberg, who has spent 16 years in Japan, including several years as a Citibank executive.

Toyoda said the company was cooperating with the U.S. investigation into the Prius problems and moving as quickly as it could to repair the gas pedals on a wide-range of models.

The NHTSA's safety database includes several hundred complaints from 2010 Prius drivers. Most of the reports, which date back to May 2009, detail problems with brakes that are slow to respond or sudden lurches of acceleration when the vehicle goes over potholes or other rough spots in the road.

"This is asking for accidents to happen and something must be done to fix this problem," wrote one driver, who described four cases of loss of braking power and acceleration on bumps. All the complaints in the database are anonymous.

Sasaki told the news conference he was grateful that LaHood had pressed Toyota to go ahead quickly with the gas pedal recalls in the U.S.

"It would have become even harder to win back the trust of customers, and the damage to the Toyota brand would have been greater," Sasaki said solemnly. "It was hard but in hindsight I am grateful to Mr. LaHood."

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Video: Toyota aims to repair relationships

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    >>> toyota is now investigating possible brake problems on lexus hybrids after thursday's admission that there were problems on its 2010 prius models. this as toyota 's chief executive addresses the media for the first time. cnbc's phil lebeau covers the car industry and has certainly been covering this story for us. phil , good morning, again.

    >> reporter: good morning, matt. and as we speak right now, okio toyota , the chairman and ceo of toyota , is holding a press conference in japan, talking about the recalls that are taking place, this on a morning when an official with the japanese government says toyota has a mistaken view of the prius brake problem. he says the company does not see it as a major issue, even as toyota says repeatedly it is moving quickly to deal with prius brakes that are slow to work. toyota 's latest problem, the prius , its best-selling gas- electric hybrid . the prius is considered toyota 's gold standard and a badge of conspicuous conservation for its proud owners.

    >> there's a lot of consumers out there that are really nervous about driving their toyota products.

    >> reporter: last november, less than a month after buying her 2010 prius , "today" west coast contributor maria menounos told police her brakes failed after an accident.

    >> i just felt like the brakes didn't work.

    >> reporter: federal investigators are looking into more than 100 consumer complaints about the brakes in the 2010 prius .

    >> it's going to really hurt toyota , definitely in the short term.

    >> reporter: toyota says it's looking into what may cause the brakes to pause before slowing down, adding, "we're making every effort to address this situation for our customers as quickly as possible." yet another setback for the world's number one automaker, already under the microscope for two massive recalls to address unintended acceleration. but as dealers around the country began the monumental task of fixing potentially faulty gas pedals --

    >> basically is this area right here.

    >> reporter: -- they're also faced with repairing relationships with millions of loyal customers.

    >> i just want it fixed. i want to go on driving my car and be happy and safe.

    >> reporter: as toyota looks into the issue of what's wrong with prius brakes, the big fix begins at dealerships across the country. toyota dealers are going to have to take weeks to fix millions of sticky gas pedals. remember, there's 2.3 million vehicles that have been recalled. matt?

    >> all right, phil lebeau on this story for us in illinois this morning. phil , thanks very much.

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