The business press continues to turn in devastating reporting on Toyota’s problems and the parallel failures of its main regulator, the National Highway Traffic Safety Administration.
As with all government system-failures, there are useful lessons for the press. But for now, let’s take a look at what’s been bubbling up. Much of the new reporting centers on who-at-NHTSA-knew-what-when questions that accompany the troubling facts raised by Reuters and others:
Over the prior seven years, the number of U.S. consumer complaints about unintended acceleration in Toyota cars had been steadily climbing, hitting 400 reported cases for the 2007 model year, according to an analysis of National Highway Traffic Safety Administration (NHTSA) data.
But five previous investigations into Toyota opened by NHTSA under the Bush administration had hit a dead end, with no action taken. Two safety probes resulted in relatively cheap floormat recalls by Toyota in 2007 and early 2009. Neither attracted much notice.
The New York Times looks in the same area. After Transportation Secretary Ray LaHood is quoted offering assurances about NHTSA’s diligence, the paper says:
But internal agency documents and interviews with auto safety experts demonstrate that the safety agency and the auto giant it regulated engaged in a Kabuki dance of sorts in the months and years before tensions coalesced. Drivers would file complaints by the dozens about mysterious accelerations and other hazards, federal regulators would open official reviews, Toyota would promise answers, the regulators would complain about not receiving the information they needed, and in the end, almost nothing would come of any of it.
Six times since 2003 in fact, the safety agency opened inquiries into possible Toyota safety problems, and six times it closed them without any significant action.
The numbers vary a bit between news accounts but the point is the same: investigations opened, investigations closed.
The Washington Post yesterday reported that even State Farm was trying to warn NHTSA starting in 2007. Here’s a NHTSA spokesman’s response to the Post‘s findings:
“Our investigative staff reviewed the report and added the information to our complaint database,” she said in a statement.
Ah, all righty then.
In a probe of Toyota’s “secretive culture,” the Journal describes how regulator and regulated can be intertwined:
NHTSA officials worked on the probe with their main contact at Toyota, Christopher Santucci. The NHTSA team knew Mr. Santucci: He had worked there from 2001 to 2003. Mr. Santucci’s supervisor at Toyota, Mr. Tinto [a Toyota liaison official], had worked at NHTSA in the past, too. Messrs. Santucci and Tinto didn’t respond to requests for comment.
All of this is good reporting—though, of course, not as good as the L.A. Times reporting on this that began last fall, just after the carmaker announced its largest-ever recall at the end of September. Indeed, this was the paper’s wilderness period, before lawmakers joined the Toyota probe in force, when NHTSA’s role was still murky, and the carmaker’s U.S. arm was still playing public-relations hardball. In late December, as I wrote, it issued a statement denouncing the newspaper, along with a link to six pages of answers to questions from the Times that today should probably be re-examined:
Toyota has absolutely not minimized public awareness of any defect or issue with respect to its vehicles.
Any suggestion to the contrary is wrong and borders on irresponsibility.
Indeed, today we learn in the Journal story above that two top executives admitted to regulators in January that the company had known of the problems for more than a year:
On Jan. 19, in a closed-door meeting in Washington, D.C., two top executives from Toyota Motor Corp. gave American regulators surprising news.
Evidence had been mounting for years that Toyota cars could speed up suddenly, a factor suspected in crashes causing more than a dozen deaths. Toyota had blamed the problem on floor mats pinning the gas pedal. Now, the two Toyota men revealed they knew of a problem in its gas pedals.
The two top officials from the National Highway Traffic Safety Administration “were steamed,” according to a person who discussed the meeting with both sides. As the meeting closed, NHTSA chief David Strickland hinted at using the agency’s full authority, which can include subpoenas, fines, and even forcing auto makers to stop selling cars.
Toyota had known about the gas-pedal problem for more than a year. Its silence with U.S. regulators, and other newly uncovered details from the crisis enveloping Toyota, reveal a growing rift between the Japanese auto maker and NHTSA, one of its top regulators.
The L.A. Times, by the way, ran its terrific expose on NHTSA back in early November:
Runaway Toyota cases ignored
Safety investigators dismissed numerous reports of sudden acceleration, then said data were lacking.
The broader point, though, is that it may be time to start connecting the dots on regulation.
Frontline last night aired a scary story about regional airlines that found, among other things, that the FAA can’t say how many inspectors it has devoted to the growing sector. The pre-crisis collapse of the financial regulatory system has been well-documented by now. Heck, The New York Times last month found problems with the oversight of linear accelerators.
News organizations with stretched resources can’t be everywhere, but with regulatory systems running out of control like so many Toyotas, some big-picture thinking might be in order. This is an area that clearly doesn’t lack for stories.Dean Starkman Dean Starkman runs The Audit, CJR's business section, and is the author of The Watchdog That Didn't Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014). Follow Dean on Twitter: @deanstarkman.