Transport Committee on March 16th, 2010

[Stephen Beatty]

Those are two different issues.

If I may, what we indicated was two things. We would do a general advisory to our customers, which we're doing in waves. With respect to people who have affected vehicles, every one of those customers has already received a letter from us.

[Brian Masse, NDP, Windsor West, ON]

That's different from what I received.

I want to move on to Mr. Inaba. Thank you for coming here.

As Canadians, sometimes we seem to be very courteous and don't have the same type of push that Americans might have and other nations, but I do want to make sure we're clear on where decisions are being made for Canadians.

One of the things I've been a little bit troubled by is that Mr. Toyoda has not apologized to Canadians. He has appeared in the United States, apologizing, and also offered his sincere apologies to the Chinese--going to China not upon request. Why has Mr. Toyoda not come to Canada, or issued an apology statement, especially seeing the Chinese market only has 75,000 vehicles on recall? Canada has hundreds of thousands; there's one-fifth in China compared to ours here. And also, which I think is really important, we're equal percentage-wise--or very close--to the American market.

[Yoshi Inaba]

The message I wanted to deliver is not only to American customers, but also all our customers worldwide, so that his apology goes everywhere. Although he visited China right after the United States, of course he wished that he could visit many more countries, but because of his limited time he could not do so. But I think it really applies to any customers in the world, and that includes Canada, and any customer is as important as anybody.

[Brian Masse, NDP, Windsor West, ON]

I'd like to move on to his testimony in the United States just to get a clear understanding, because today we've heard that general managers make the decisions on recalls, but in his testimony on February 24 at the U.S. House of Representatives Committee On Oversight and Government Reform, Mr. Toyoda stated, and I quote:

Up to now, any decisions on conducting recalls have been made by the Customer Quality Engineering Division at Toyota Motor Corporation in Japan. This division confirms whether there are technical problems and makes a decision on the necessity of a recall.

This was also backed up by Mr. Lentz, who was actually testifying at another committee, and once again said that Toyota Japan makes decisions on recalls. That seems counter, though, to what you've just mentioned in terms of general managers.

[Yoshi Inaba]

I didn't have a chance to explain. Going forward, we are making a great many changes in our processes, and one of them is that Mr. Toyoda himself initiated this approach of a global quality committee, which has been formed in Japan, and there is always a North American member there. But also to the recalls, specific to your question, we have changed our format for the decision-making process on recalls. It used to be that it was strictly done in Japan alone, and by the Japanese alone. Now we are forming a committee that consists of four different regions. One is North America, one is Japan, one is Europe, one is China. So there will be North American representation in the decision process for recalls from now on. It is now in the process of being formed; in a matter of two weeks or so we will start this process.

[Brian Masse, NDP, Windsor West, ON]

So for all the Canadian current recalls, at some point in time the decision about the timing of that recall and if it would happen did take place, though, in Japan.

[Yoshi Inaba]

That's right.

[Brian Masse, NDP, Windsor West, ON]

And then the new system comes into play in the next few weeks. So we will be further integrated, then, with the American system for recall if it's North American.

[Yoshi Inaba]

Absolutely. I would also make sure that it will happen.

[Brian Masse, NDP, Windsor West, ON]

Okay.

[Yoichi Tomihara]

I want to comment that because Canada has quite unique road conditions and environment, especially cold temperatures, Toyota Canada also really influenced TMC a lot this year on recalls. This is not simply just an instruction from TMC about the recalls. We have full consultation and full influence, I want to add.

[Brian Masse, NDP, Windsor West, ON]

And that's fair. I just wanted, though, to confirm where the final decision-making process was taking place. I of course would assume that there would be quite a bit of input here.

I know that there's the six-point plan that's come through that's been mentioned. Americans under the current system right now are going to get a quality centre for excellence and research with new postings, and Americans are going to also have their Toyota vehicle picked up and have a replacement vehicle, as the U.S. Attorney in New York State negotiated and Mr. Toyoda stated at congressional hearings.

Is there a Canadian equivalency to this that is taking place? If not, why not? If there is, when is it going to take place?

[Yoshi Inaba]

I'd like to have Mr. Beatty answer that question.

[Stephen Beatty]

Thank you.

I think it's important to understand that one of the differences in customer handling obviously comes down to policies operated between Toyota Canada and Toyota Motor Sales in the United States. Every new vehicle in Canada is sold with roadside assistance. These are late model vehicles, so in general all of our vehicles that were affected by the recall were also covered by the provision that would allow for free towing of vehicles to our dealerships.

On top of that, the moment that the sticky pedal recall was announced, we gave our dealers an interim inspection procedure, which was something unique to the Canadian marketplace, and provided them with authority from Toyota Canada to take customers out of any vehicle where there was any concern about the safety of the vehicle or sticking of the pedal and put them in a rental vehicle. Those policies actually were in place across Canada prior to in the U.S.

[Brian Masse, NDP, Windsor West, ON]

Yes, but the decision about that, then, is with the dealership, not the customer.

[Stephen Beatty]

The roadside assistance belongs to the customer, so the call to roadside assistance is what gets the car in. The decision with respect to the vehicle was, right from the outset, if the customer has concern, get them out of the vehicle and put them in a rental car until we can address the pedal. Once the pedal is addressed, then they're back in their car.

[The Chair, Conservative, Merv Tweed]

Thank you, Mr. Masse.

Mr. Watson.

[Jeff Watson, Conservative, Essex, ON]

Thank you, Mr. Chair.

Thank you, of course, to our witnesses for appearing here today.

Mr. Beatty, you gave testimony earlier that you discovered the sticky gas pedal issue in late October, and ultimately you had to submit a report to Toyota Motor Corporation for review and ultimately a recall was issued January 21. According to Transport Canada you had a meeting with Transport Canada officials, or Toyota did, on November 25, 2009, regarding the floor mat issue. You didn't mention at that time there could be an alternate problem that you were investigating?

[Stephen Beatty]

No. It's typical that in any discussions with Transport Canada we're focused on the specific agenda item at the time, as opposed to going into any of the other technical issues we're investigating at that point. In retrospect, would it have been good to have a dialogue about it? Maybe it would. But we didn't at that time know that we had a defect in the car. What we had was an issue we were investigating.

[Jeff Watson, Conservative, Essex, ON]

So you weren't able to confirm a sticky gas pedal until you issued the recall on January 21, is that correct?

[Stephen Beatty]

Right. Just to clarify the situation, as Toyota Canada, my responsibility is to issue a recall notice the moment I become aware of a defect—

[Jeff Watson, Conservative, Essex, ON]

I'm aware of that. I asked whether you had a—

[Stephen Beatty]

So that's what I'm saying—

[Jeff Watson, Conservative, Essex, ON]

—permit until the 21st.

[Stephen Beatty]

Once we have identified a problem, we send it to Japan for review by engineering. They come back to us with their report. As soon as we have that, we trigger.