Now It's FBI. Obama Government Piling Up on Toyota

While the sham hearing continued on Capitol Hill, FBI raided three Toyota suppliers in an anti-trust investigation. The three suppliers are Denso Corp, Yazaki North America and Tokai Rika. Their Japanese parent companies supply Toyota in Japan.

FBI raids US headquarters of Toyota supplier Denso in antitrust probe (2/24/2010 AP via Los Angeles Times)

"NEW YORK (AP) — The FBI raided the U.S. offices of three auto suppliers to Toyota and other manufacturers as part of an antitrust investigation, the agency said Wednesday.

"The FBI's Detroit office said agents raided the offices of Denso Corp, Yazaki North America and Tokai Rika. All the raids took place Tuesday evening. There was no immediate indication the investigation involved the safety of the auto parts." [The article continues.]

Apparently, Japanese companies supplying a Japanese company is a punishable offense in the U.S.

Denso supplies Toyota with accelerator pedals that are superior to the ones supplied by CTS and trouble-free. Can't allow that, can we? (Read these excellent articles from The Truth About Cars "Complete Guide to Toyota's Gas Pedals")

Abject apology by the CEO of Toyota was stupid and unnecessary. Clearly he wasn't informed of "taking the fifth". Chicagoland thugs won't stop until they drive Toyota out of the country. The U.S. consumers will have less, inferior choices when it comes to choosing their cars and trucks.

""Where is the remorse?" scolded Rep. Marcy Kaptur, D-Ohio." (from AP article today)

Hahahahaha that's rich. What a circus.

The inept DPJ (Democratic Party of Japan) administration is bogged down with land transaction scandal of the party leader and probably has little time or inclination to spare to protest to the Obama administration.

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Toyota and Goldman Sachs: Who's Bad?

So... I don't quite understand. Toyota is bad and evil because it built cars that occasionally failed for unknown reasons. Goldman Sachs is brilliant because it designed CDOs that would fail so that they could bet against them. And oh by the way in that process Goldman may have helped crash the world economy into the deepest recession since the World War II.

Here we have Goldman Sachs, who, from all indications, created CDOs (collateralized debt obligations) specifically designed to FAIL. Goldman sold them to either gullible investors or co-conspirators (think Societe Generale), often with AIG's insurance (CDS, credit default swap). Goldman itself shorted those CDOs through AIG's CDS. Sure enough, CDOs crashed when 1) underlying MBS (mortgage backed securities) crashed because of sub-prime loan debacle; 2) index that supposedly tracked CDS started to show unusually high spreads, making the securities insured with those CDS drop in price; 3) AIG got downgraded, triggering the collateral requirement and downgrade of CDOs; 4) all of the above and probably more. (Read AIG-related article by David Fiderer at Huffington Post, if you think you can keep your blood pressure from shooting up.)

Goldman Sachs has gotten away with it.

Now we also have Toyota, subject of media and congressional circus right now, whose Japanese CEO naively admits guilt, saying he is sorry, that his company shouldn't have expanded this rapidly, that they were remiss in quality, etc - the usual, honorable thing to do in Japan and totally stupid thing to do in the U.S., where anything he says will be used against him and his company in a criminal prosecution which the Obama government is so intent on pursuing.

For Toyota to replicate Goldman's success, Toyota has to build a car specifically designed to fail, sell it and take out huge insurance policies on the car and the driver. An accident happens, and the insurer cannot pay because the payout is simply too huge. The government steps in to pay on behalf of the insurer. When someone raises the question of a faulty car built by Toyota, Toyota will say "People are simply jealous of our performance, because we're so good." And people will say "Oh OK, I guess you guys are really good."

FBI raided the offices of Toyota suppliers Tuesday night. For what criminal offense?

Some people may say "Well, in Toyota's case, people actually have died from the defect." People have died from the stock market and housing market plunge at least in part caused by the products and trading strategies by the likes of Goldman Sachs. I remember a few who committed suicide.

Still, Goldman Sachs has gotten away with it.

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US Toyota Workers Stand Behind Their Man, Their Company

The Congressional hearing on Toyota's recall problems (aka "kangaroo court", aka "witch hunt" in the name of public safety, my foot) will have Toyota's CEO Akio Toyoda tomorrow.

Japan's Nikkei Shinbun reports that Toyota's US factory workers are in Washington D.C. to show their support for their CEO and for their company.

"The Congressional hearing on February 23 on Toyota's recall problems was an unusually popular event. The line of people wanting to attend the hearing was 50 meters long. 300 people showed up for 150 slots.

"Among them, there were people wearing shirts with Toyota logo. They were men and women who work in Toyota factories around the country. One of them, from a Toyota factory in Indiana, said to the reporter, "We are only a small portion of the Toyota employees. We want everyone to know that there are tens of thousands of Toyota employees supporting the company throughout the United States."

"Referring to Toyota's CEO Akio Toyoda, who is going to testify on February 24, she said, "I trust him to make the right decision. I want him to correct the wrong impression that Americans have gotten about Toyota over the recall problems."

"There are already people forming a line to attend the February 24 hearing."

CNN also reports that Toyota's US dealers staged a rally on Capitol Hill in support of the company and their brands which have exemplified quality worldwide.

Toyota dealers rally in defense of brand (2/23/2010 CNN International)

"Washington (CNN) -- More than 100 Toyota dealership owners and staff rallied on Capitol Hill Tuesday to defend their businesses and Toyota as Congress opened high-profile hearings into recent large-scale vehicle recalls.

""We take great pride in the fact that as of last night, together we've done over 690,000 recalls already and are pacing at 50,000 a day throughout the United States," Paul Atkinson, chairman of the Toyota National Dealer Council, said to the crowd. "My question for you is: How did we suddenly overnight become the villain?"

"... Tamara Darvish of Darcars Automotive was quick to point out more bad news for Toyota could mean more bad news for their network of 172,000 employees in the United States.

"Atkinson noted that, in the wake of last year's bailout of General Motors and Chrysler, they're now in competition with government-backed automakers for market share."

"... But a message of optimism also was a recurring theme at Tuesday's rally. AutoNation President and CEO Mike Jackson said he believes the drop in sales was largely due to the fact that many vehicles were taken off the market until they were repaired. He does not expect the brand to suffer in the long term.

""What's fascinating about the American people is that if they see a company that's done it right for decades, but has a bad moment and makes a mistake and owns up to it and commits to change and does everything possible to make it right, the American people will understand and forgive," he said."

That's the spirit.

Now, can you imagine GM (or Chrysler or Ford) factory workers and dealers coming to Washington D.C. to show support for the CEO and the company, defending their brand and quality? I can't.

Good for them, these Toyota US workers and dealers. I just don't buy the allegation that Toyota short-changed safety for the profit. That's not how they have made cars anywhere in the world, from what I once observed in a Toyota plant in Japan. Local Craigslist has a listing for night shift auto technicians at a Toyota dealership to fix the pedals.

Transportation Secretary LaHood today "testified that ... NHTSA's investigations of complaints about unintended acceleration have produced no evidence that electronic throttle systems are affected by electromagnetic interference, as some have speculated." (Wall Street Journal, 2/23/2010)

In other words, no one knows what causes unintended acceleration, but let's gang up on Toyota because it sells more vehicles than Government Motors and people actually like them, and we the government won't allow that.

My next car will be a Toyota.

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Chicagoland-Style Toyota Witch Hunt Intensifies

Don't they have better things to do?

Grand jury subpoena has been issued, and now SEC has joined the fray.

Toyota faces federal, congressional probe (2/22/2010 AP via Yahoo Finance)

"WASHINGTON (AP) -- Federal prosecutors have launched a criminal investigation into Toyota Motor Corp.'s safety problems and the Securities and Exchange Commission was probing what the automaker told investors, the company disclosed Monday. Newly released internal documents showed that Toyota officials visited with U.S. regulators years ago who "laughed and rolled their eyes in disbelief" over safety claims.

"The twin developments created new public relations challenges for Toyota plus the prospects -- however likely or unlikely -- of hefty federal fines or even indictments against executives in the U.S. and Japan. They also complicate Toyota's ability to discuss details driving its recall of 8.5 million vehicles because anything executives say could be used against the company inside a courtroom.

"Top Toyota executives were expected to testify at hearings Tuesday and Wednesday on Capitol Hill. One lawmaker said he believed Toyota misled owners about the repairs and relied upon a hastily-arranged study to reassure the public.

"In a new filing with the SEC, Toyota said it received the grand jury request from the Southern District of New York on Feb. 8 and got the SEC requests Friday.

"It wasn't immediately clear what U.S. laws Toyota might have broken. A subpoena would specify why prosecutors sought company documents, but Toyota would not comment beyond its disclosure with the SEC. A spokeswoman with the U.S. Attorney's Office for the Southern District of New York declined to comment, saying it does not confirm or deny its investigations as a matter of policy."

"...Legal experts said the fresh subpoenas could affect how Toyota executives respond to the questions from lawmakers.

"Eric Dezenhall, a crisis management consultant in Washington, said the subpoena might cause Toyota to limit its testimony because apologies are admissible in court. He predicted the company would walk a line between carefully phrased testimony and enough disclosure to describe the cars' mechanical problems and steps Toyota had taken to make the vehicles safer." [The article continues.]

Ms. Shapiro's agency is yet to do anything about naked short selling that probably precipitated the market crash in September-October 2008 which in turn crashed the global economy, or about so-called "flash-trading" (aka front-running) by big investment houses like Goldman Sachs. But she finds time to investigate Toyota.

This is getting beyond absurd.

No word about other companies with the same sticking pedal problems. No word about the company (CTS) who makes the accelerator assembly for Toyota and other major auto manufacturers including GM, Ford, Chrysler, and Honda that is known to cause the problem.

And how about this allegation by Wayne Madsen that CTS's accelerator may be negatively affected by military frequencies? (CTS supplies to the US military.)

But no. Obama-land is intent on doing all it can to squash Toyota by staging a show trial. With the subpoena, Toyota executives have little choice but take the fifth in the congressional hearing, and they will be painted by the obliging media as "guilty". Its union pals must be ecstatic.

When will Japan start dumping US Treasuries, I wonder?

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