Transport Committee on June 1st, 2010

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Okay. He couldn't recall the exact date that he became aware of the defect in the pedal design, but he did say that it was around the end of the year. Well, clearly around the end of the year isn't January 21, 2010, so as the person responsible for operations at Toyota Canada, were you surprised to hear the admission by Mr. Tanguay?

[Stephen Beatty]

No. I think that when you look at the operations of a manufacturing company, what happens at the level of the manufacturing plant is that they will be notified of a pending change of production. That's their role: to assemble vehicles. The other engineering issues are dealt with elsewhere.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

As the person responsible for operations at Toyota Canada, you have to take responsibility for the engineering design and the specs that you provide, too, and that are manufactured by your contractors such as CTS. Is that correct?

[Stephen Beatty]

Toyota Motor Corporation does. Yes.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Thank you.

Now, are you familiar with a press release issued by the U.S. Transportation Secretary, Ray LaHood, on Monday, April 5, 2010, entitled “Secretary LaHood Announces DOT Seeking Maximum Civil Penalty from Toyota”?

[Stephen Beatty]

Yes, in general.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

In that press release, it states that the National Highway Traffic Safety Administration, NHTSA:

...learned through documents obtained from Toyota that the company knew of the sticky pedal defect since at least September 29, 2009. That day, Toyota issued repair procedures to their distributors in 31 European countries and Canada to address complaints of sticky accelerator pedals, sudden increases in engine RPM, and sudden vehicle acceleration. The documents also show that Toyota was aware that consumers in the United States were experiencing the same problems.

You are aware that the U.S. government fined Toyota a record almost $16.4 million for failing to give notice of the defect. Are you also aware that Toyota paid that fine rather than contest it? And why?

[Stephen Beatty]

Yes, although Toyota in the United States indicated that it did not believe it was in violation of legislation. Beyond that, I'm afraid that I can't tell you very much. I'm not familiar with the provisions of the U.S. law.

The one thing I would like to point out, however, is that Secretary LaHood's press release was wrong. It made reference to the TI having been received in Canada. That was never the case. We pointed that out in a subsequent message to Mr. LaHood.

I don't know how to explain that, other than to say that sometimes when information crosses borders, wrong material crops up. In this case, the reference to Canada having received the TI was simply incorrect.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

But you do have a system in place to do that, haven't you?

[Stephen Beatty]

I wouldn't ordinarily receive the technical information directed at European distributors.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

I think there's an overwhelming amount of evidence here, which, I'll remind you, was based on documents that were sent to Canada, so how can you say that Toyota did not break the law here? There is evidence that proves Toyota knew at least three months ahead, before you issued a recall. Why didn't you come to the minister with that information? Why the cover-up?

[Stephen Beatty]

One, there was no cover-up.

Two, as I just mentioned with respect to the reference to the TI that wasn't received in Canada, the first cases we had were the subject of a field technical report in October, but we couldn't replicate the condition. We didn't know what it was.

That material was provided to engineering for a review. The first case we had that we could replicate--in other words, we could confirm that something was happening--was in late November. I think we moved as diligently as we possibly could to identify those issues and move to recall.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Thank you.

Just quickly to Mr. McDonald, in the 9,000 pages of documentation that Toyota Canada finally provided, is there any new information, anything relevant that you've gleaned?

I'd also like to know from Mr. Beatty why it took so long. Also, why wasn't that information provided to Transport Canada sooner and why wasn't it presented to the committee as well, in a more timely way?

[Gerard McDonald]

Certainly to date we have not found anything new with respect to the sticky accelerator issue. But as I indicated earlier, we're still analyzing some of those documents, and we expect to be receiving some further documentation as well.

[The Chair, Conservative, Merv Tweed]

Thank you.

Mr. Jean.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Thank you, Mr. Chair.

Thank you, witnesses, for coming here today and providing follow-up information.

Obviously there is a lot of information: I received three CDs in my office yesterday. It took 20 minutes to open the CDs just to get at the documents; there are some 58 documents, I understand, with 221 pages in total. Quite frankly, I will be reserving my opportunity to call you back as witnesses to answer questions from those documents.

Originally, I did receive a letter from Toyota Canada in relation to a request I made for pedals...in particular, at a committee meeting, I asked whether or not the defects that we're talking about in Canada--the pedal assembly and the material utilized--were the same as what was found to be defective in Europe. The answer to that in the first letter was a wiggle letter, quite frankly, as we call them in law; it didn't answer my question. I was very disappointed with that. I want to put on the record how disappointed I was with that answer by Toyota Canada.

Certainly, the response that I received just recently, on May 31, 2010, in a letter from Toyota Canada answering those questions in more detail, is quite frankly what I would have expected from a professional organization in the first place, and it indicated that in essence the material used in Canada resulting in the sticky pedal phenomenon was the same as that used in Ireland and the United Kingdom.

I understand that you have indicated you feel everything was done, in particular in relation to the notice period, but I would argue that point. I do not believe adequate notice was given for me personally. In this particular case, you had notice a year before. I'd like to talk about that first.

What recall mechanisms, professional notices, technical service bulletins, etc., would have changed hands among Toyota Europe, Toyota Canada, or Toyota United States? Because, in essence, Toyota International--I suppose I could utilize that--owns a percentage of everything; it in fact owns Toyota Europe and Toyota U.S. and owns 50% of Toyota Canada. So what was exchanged between Toyota Europe and Toyota Canada or other branches in Toyota? Because certainly, I would suggest, you should have notice of that.

[Stephen Beatty]

I can't speak to what may have been transmitted between Europe and any other part of the world.

With respect to Europe and Canada, there was no direct communication on this issue. I might say that as Toyota Europe was looking at it, they were looking specifically at two models, the Aygo and the Yaris. While the Yaris is sold here, it is sold with a different design of pedal by a different manufacturer, so it's not covered by it at all. The Aygo is not sold outside of Europe.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

I understand the pedal assembly is made of the same manufactured polymer, is it not? And in fact, it's the same assembly except that one is right-hand drive and one is left-hand...?

[Stephen Beatty]

No. Allow me to just break up the question so that we can be clear about this. As a general rule, ultimately all of the pedals that were recalled used the same polymer and are of the same general design. The vehicles that were being reviewed in the European case were not the same.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

I understand, but they were of the same general design and the same material, so to me, bingo: ding, ding, ding, bells go off, we have a problem.

A year later--a year later--you give notice to the regulator in Canada that there may be a problem with it, after an additional three months of confirmation.

Now, Mr. Beatty, I am not satisfied with that. We'll see whether or not the regulator is satisfied with it.

Do you have a mother?

[Stephen Beatty]

Absolutely.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

As we all do. My mother taught me how to drive some 30 years ago. Today, she's not quite what she was 30 years ago when she taught me how to drive; she's 68 years old and her ability to react is not quite what mine was or what hers was 30 years ago.

She does not drive a Toyota, but I will tell you this: if I found out that she was driving for three months with equipment that could only be described as malfunctioning or having a possibility of malfunctioning, I would be very upset. I've heard from many Canadians that they are very upset, so I hope Toyota takes that to heart and does something differently.

Speaking of which, what could we do differently as a committee here today? What could we do differently in the future to make sure that the notice period shrinks considerably?

[Stephen Beatty]

What I think it comes down to, on the part both of companies and of the government, is to put as many technical resources as we can on the identification of those problems and on determining whether or not a safety defect actually exists.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Mr. Beatty, because I'm limited in my questions, I would ask that you provide to us, through the committee, some suggestions you may have in relation to regulation, legislation, and how we could shorten that notice period, because, quite frankly, it's not adequate.

But I do have one final question on your document dated May 31, 2010. You have at the top of the document “privileged and confidential attorney work product”: does this mean that you're trying to provide to us documents that are protected by solicitor-client privilege?

[Stephen Beatty]

Well, obviously when we've provided it to you, we've waived that.