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Toyota Crisis: Recall Extended to Europe and China
« on: January 28, 2010, 11:46:33 AM »
Toyota's massive North American recalls over problem gas pedals are being extended to Europe and China, the latest blow to the world's top automaker as it struggles to salvage its safety reputation.

The move comes after Toyota announced on Tuesday that it was suspending sales of eight models — including the Camry, the top-selling U.S. car — and slowing vehicle production in Canada and the U.S. while it moves to fix Canadian-made accelerator pedals that could stick without warning.

Ford halts some production in China

Ford Motor Co. Thursday announced it has halted production of some full-sized commercial vehicles in China because they contain gas pedals built by the same company behind the accelerators in Toyota's recall.

Ford spokesman Said Deep said Thursday the diesel version of its Transit Classic built by a Chinese joint venture contains accelerators built by CTS Corp. which is based in Elkhart, Ind., and has a manufacturing plant in Streetsville, Ont.

The vehicles began production in December and only about 1,600 have been produced, he said.

In a statement, Ford partner Jiangling Motors Co. said there have been no reported problems with the Transit Classic, but it is conducting a review of pedal assembly part to determine the next step. The diesel Transit Classic is Ford's only vehicle that has gas pedal parts made by CTS, Deep said.

Details not known

The scale of recalls has snowballed over problems with sticking gas pedals and floor mats that can trap the accelerator. Details on actual incidents of dangerous acceleration are not yet known, but U.S.-based safety research firm Safety Research and Strategies said it had identified 2,274 incidents of unintended acceleration causing 275 crashes and 18 deaths in Toyotas since 1999.

A week before the sales suspension, Toyota issued a recall for the same eight models, affecting 2.3 million vehicles. On Thursday, it 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.

The company is recalling 270,000 vehicles from the Canadian market.

Those steps came on top of a recall in late 2009 involving 4.2 million vehicles amid concerns that floor mats could bend across gas pedals, causing sudden acceleration.

In Europe, Toyota is unsure how many vehicles are affected, but the Chinese vehicle recall affects 75,500 RAV4 sport utility vehicles that were manufactured in China between March 2009 and January 2010.

Earnings recovery in jeopardy

Colin Hensley, a manager at the carmaker's European operations, said the company is checking how many European models use the parts involved in the latest North American recall.

CTS Corp. said it knows of only a few cases of drivers having problems with accelerators. The firm said that Toyota told it about fewer than a dozen cases in which drivers struggled with pedals.

It said it knows of no accidents or injuries tied to the problem, and also said that it's not aware of any cases where the pedal became stuck after drivers pushed it down, potentially causing unwanted acceleration.

The automaker said it would communicate with European owners of vehicles that are affected by sticking pedals. "Toyota is making every effort to address this situation for our customers as quickly as possible," it said.

The problem is rare, Toyota said, and customers who are concerned should contact customer service for help before recall instructions are issued.

The sales suspension in North America — 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 21.8 billion yen ($256 million Cdn) after three straight losing quarters.


Investors continued to dump shares in the global auto giant Thursday. Toyota dropped 3.9 per cent to 3,560 yen even as the benchmark Nikkei 225 stock average gained 1.6 per cent to close at 10,414.29. Toyota stock had tumbled 4.3 per cent 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.

North American recall expands to floor mats

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 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 recall and the plans to suspend sales and shut down of six factories while Toyota tries to fix the problems.

One of the affected plants is in Cambridge, Ont., where Toyota makes the Corolla, Matrix and Lexus RX 350 models. A plant in nearby Woodstock, Ont., that builds the RAV4 sport utility vehicle will also be affected. Together, the two plants employ about 5,900 people.



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