Nightly News   |  February 04, 2010

Safety officials slam brakes on Prius

Toyota denied Thursday that it ordered a Prius recall because of possible brake problems, but U.S. federal safety officials have opened an investigation. CNBC's Phil LeBeau reports.

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This content comes from a Full-Text Transcript of the program.

WILLIAMS: Good evening.

BRIAN WILLIAMS, anchor: For decades in this country , it was the automaker that stood for quality, the car company that could do no wrong. But these days nothing is going right for Toyota . The once mighty automaker has been paralyzed by an accelerator scare, what may be a botched response to it. Now a second safety question involving brakes on some of its cars. Our own government seems to be trying out just how to handle it. US automakers are trying to take advantage of it, and owners are bearing the brunt of it. We begin tonight at a Toyota dealership in Canton , Michigan , with Phil LeBeau , who covers the car business for CNBC . Phil , good evening.

PHIL LeBEAU reporting: Good evening, Brian . With the Prius now under investigation, Toyota 's star car is taking a hit. So you have a company already reeling from two massive recalls now dealing with more questions about safety and reliability. Toyota 's announcement that it will look into what may cause the brakes on 2010 Prius hybrids to pause before slowing down is the latest in the company 's problems. Bob Becker owns a 2010 Prius . He says he bought it for safety because he has a new baby. He also has had brake problems and told Toyota as far back as last August .

Mr. BOB BECKER: It's been frustrating and I'm angry because, again, within two weeks of bringing the car in I knew there was something wrong. And they were just in denial about the problem.

LeBEAU: This morning in Japan , Toyota executives admitted the Prius problem while announcing a quarterly profit for the company . The federal government 's formal investigation into brakes on the 2010 Prius hybrid sedan comes after 124 complaints, including four accidents, were reported to Washington . Toyota says it will cooperate fully, adding, "We're making every effort to address this situation for our customers as quickly as possible." In fact, starting last month, Toyota fixed the Prius brake software for new models being built this year, which makes journalist Paul Eisenstein wonder why the company waited until now to warn owners of other 2010 Prius models that their brakes may have a problem.

Mr. PAUL EISENSTEIN: The big question -- or questions -- are, what did they know and when did they know it? The timelines that they're laying out just don't work.

LeBEAU: The Prius issue comes as Toyota dealers around the country start repairing millions of gas pedals in some of their most popular cars, a repair job Toyota says could wind up costing $2 billion. In Florida , Mel Johnson , with a local Toyota dealership, is making house calls, fixing gas pedals on recalled cars.

Mr. MEL JOHNSON: So far I've done about -- I've done about 40 of them. But I'm -- that number is going up quite a bit.

LeBEAU: But now the Prius , Toyota 's star car, often the car of choice for the stars, is the latest model to be hit with questions about safety. As Toyota dealers, like this one, work extended hours to repair recalled cars, another automaker, Ford is checking out the brakes on more than 17,000 Mercury Milan and Ford Fusion hybrid cars. Apparently, as people are driving those cars, Brian , when they hit the brakes , they may get the feeling that the brakes have failed even though they are completely working. So Ford now checking out brakes on hybrid cars .

WILLIAMS: All right, Phil LeBeau , in Michigan for us tonight to start us off. Phil , thanks.