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By John Kristensen of Kristensen, LLP posted in Employment Law -- Employee on Thursday, May 8, 2014.
Toyota fixed steering rods for over a decade before recall

Toyota recently paid a record fine for dragging its feet on disclosing a safety defect blamed for potentially fatal unintended acceleration. Now, documents have come to light in a California lawsuit that point to possible delays involving an earlier safety issue, one that could result in loss of steering control. Records of Toyota warranty repairs and customer complaints that are part of the lawsuit show the car company was dealing with cracking and breaking steering relay rods in the U.S. for at least 11 years before it recalled 330,000 pickups and SUVs in Japan to replace the rods — and 12 years before its 2005 recall of nearly a million similar trucks in the U.S. for the problem. The steering rod records that are part of the lawsuit again call into question whether Toyota promptly reports safety problems in the U.S. Earlier this year, the National Highway Traffic Safety Administration fined Toyota the maximum $16.4 million for delaying a recall of 2.3 million vehicles for gas pedals that could stick, causing unintended acceleration. An ongoing investigation is looking at whether Toyota improperly delayed a separate recall of 5.4 million vehicles for floor mats that could trap poorly designed gas pedals. Now NHTSA — which accepted Toyota’s assertion after the 2004 steering rod recall in Japan that U.S. action was not needed– has opened a probe demanding that Toyota explain why it waited nearly a year to recall the trucks in the U.S. to fix the rods. The 2005 U.S. recall covered 1989-1995 Toyota 4Runners, 1989-1995 compact pickups, and 1993-1998 T100s. Federal law requires an automaker to report a known safety defect within five business days. “There is a pattern of covering up defects at Toyota,” asserts Clarence Ditlow, head of the Center for Auto Safety, a watchdog group often at odds with both automakers and NHTSA. “It looks to me like Toyota knew about” the relay rod problem long before the recalls, he says. Because the documents are part of a lawsuit, Toyota declined to comment or address why it told NHTSA in 2004 there wasn’t a U.S. problem, even though Toyota had been fielding U.S. complaints for years and had been making warranty repairs for more than a decade. “Toyota’s long-standing policy is to not provide comment in regard to ongoing litigation,” spokesman Brian Lyons says. He says Toyota is cooperating with NHTSA’s demand that Toyota explain why it didn’t recall U.S. vehicles sooner. The steering relay rod links the front wheels to the steering system. If it breaks, the vehicle can’t be steered. “You might have a little control over one tire, but that other one is going to do what it wants,” says Idaho State Police Capt. Brian Zimmerman. Idaho State Police investigated a fatal crash on Sept. 15, 2007, near Fairfield, Idaho, of a 1991 Toyota compact pickup that was on the U.S. steering rod recall list. Driver Michael Levi Stewart, 18, was killed; three passengers were injured. None wore safety belts, Zimmerman says. The Stewart family’s lawsuit, filed in California state court by John Kristensen of the O’Reilly Collins firm in San Mateo, includes the Toyota-owner complaint and warranty information, obtained in discovery. Kristensen says Stewart got the truck in July 2007. He says the previous owner testified he received no recall notice. The Stewart family got a notice three months after the crash. The lawsuit is scheduled for trial this fall. A USA TODAY analysis of that complaint and warranty data shows at least 153 steering rod repairs to 4Runners and compact and T-100 pickups from 1993 to September 2005, when the vehicles were recalled in the U.S. Two fatal crashes in addition to Stewart’s are linked to Toyota relay rod failures, according to NHTSA. One happened before the recall. The warranty records show that not only was the company replacing relay rods in U.S. trucks under warranty, but also doing so called goodwill replacements, free repairs on vehicles on which the warranty has expired. “It would seem unusual that warranty work would be conducted after the warranty period, unless it were a known fault. There’s a certain admission of guilt if the work is repeatedly performed after the warranty period,” says Jeff Bartlett, an editor at auto and consumer products tester Consumer Reports. “That would suggest they saw a trend, an emerging problem.” The steering problem was apparently well known enough to Toyota dealers that at least once (in August 1995) a dealer replaced the rod on a new pickup before it was sold, the warranty records show. Not all customers equal Complaint documents also show that Toyota didn’t treat all customers equally. Jack Anderson of Garland, Texas, recalls the relay rod snapping in 2000 on his 1989 compact pickup that was later on the recall list: “It could have been a wreck deluxe if I hadn’t gotten off” the road. He says Toyota refused to repay him for the repairs. He also says he never got a recall notice, even though his truck is covered. In some other cases, however, the customer complaint documents show Toyota provided “goodwill” reimbursement for some or all of the costs. The lawsuit documents include these examples of the warranty relay rod replacements for vehicles that were out of warranty: February 2002, before the Japan or U.S. recalls, on a 1998 T-100 pickup with 111,000 miles. February 2003, before the recalls, on a 1997 T-100 with 103,000 miles. January and February 2005, after the Japan recall but before the U.S. recall, on five 4Runners, ranging from a 1990 to a 1994, with mileage ranging from 109,000 to nearly 278,000 miles. The complaints include comments from dealer technicians or service managers about the rods. Typical: “Weak metal stressed and cracked,” says a note about a rod replacement in February 2006. Where was NHTSA? The warranty fixes raise another question: Where was NHTSA? Its early warning system, intended to track such repairs and spot trends, was in operation by 2003. The system requires automakers to make quarterly reports to NHTSA of warranty work done on vehicles up to 10 years old. It was set up under the so-called TREAD Act (Transportation Recall Enhancement, Accountability and Documentation), a law passed as a result of the Ford-Firestone recall that grew to some 20 million tires by 2001. Also, the 2004 Japan recall should have triggered a closer look at U.S. models, says Jeffrey Runge, the NHTSA administrator at the time. If an automaker “reports something (in another country) and says, ‘We don’t see any reason to recall it here,’ it would appear on the radar screen and the agency would ask for information,” says Runge, administrator from 2001 to 2005 and now a consultant. “Once a company reports something like that, it goes into the database as something to watch.” In NHTSA procedure, the Japan recall should have triggered a PE (preliminary evaluation), Runge says. It did not, and he says he does not know why. “That would never have risen to my level” at the agency. NHTSA’s top spokeswoman, Julia Piscitelli, says that the agency “closely monitors foreign recalls” and uses “a wide variety of resources to determine if an investigation is needed.” But in this case, “Given the low number of incidents and lack of injuries or fatalities over a span of many years in this case, we did not have information that warranted an investigation.” NHTSA’s data show 19 complaints prior to the U.S. recall, significantly fewer than the 153 relay rod fixes specified in the Toyota warranty documents. The NHTSA complaints alleged one crash and no injuries or deaths before the U.S recall. Although the steering rod recall was years earlier than Toyota’s recent multiple recalls for unintended-acceleration issues, there are similarities in how the company handled them: After each recall, Toyota’s leader pledged more attention to quality, less to sales growth. In a 2006 report, after a rare Japan government reprimand for how it handled the 2004 rod recall and other defects in Japan, then-Toyota president Katsuaki Watanabe was quoted as saying, “There will be no growth without an improvement in quality.” This February, current President Akio Toyoda told a U.S. congressional hearing that unintended-acceleration issues, now linked by NHTSA to as many as 89 U.S. deaths, occurred because “Toyota has, for the past few years, been expanding its business rapidly.” Because of such growth, he said, the company “became confused, and we were not able to stop, think and make improvements as much as we were able to before.” He vowed to de-emphasize growth, re-emphasize quality. The recalls came after highly publicized crashes. In Kumamoto, Japan, in 2004, steering failed on a vehicle similar to the U.S. 4Runner, causing a head-on crash that injured five and receiving considerable media attention. The relay rod recall in Japan followed. In San Diego County last August, a crash killed off-duty California Highway Patrol Officer Mark Saylor and three family members after an improper floor mat jammed a Lexus gas pedal. Toyota announced a recall to fix mats and pedals in November. The U.S. recalls came months after foreign actions for the same problems. In the steering rod case, Toyota recalled 330,000 vehicles in Japan in October 2004 and didn’t recall 977,000 similar U.S. models until September 2005. In the case of gas pedals that could cause unwanted acceleration, Toyota changed the design of gas-pedal assemblies in European-market vehicles in July 2009 but said it didn’t suspect a problem with similar U.S. models. Jan. 21, Toyota recalled 2.3 million U.S. vehicles to replace the sticky pedals. Kristensen, the lawyer in the Stewart suit against Toyota, calls that a pattern: “If they didn’t change last time, why do you think they will this time?” Runge says automakers generally resist recalls. “I would hesitate to single (Toyota) out,” the former NHTSA administrator says. “I don’t recall any one (automaker) standing out as more difficult than another. They all had the same concerns and wanted to avoid using ‘recall.’ ” In his experience, “They’ll want to call it ‘customer satisfaction action’ or such. Once they call it a ‘recall,’ they open themselves to liability.”