Thursday, January 28, 2010

Toyota Recall, Production Halt Were Ordered by Obama Administration

There's something funny going on regarding Toyota Motors recalling the cars and trucks and stopping sales and production.

Toyota announced it was recalling 2.3 million cars and trucks it had sold in the U.S. because of sticking accelerator pedals.

Then, the company announced it was stopping the sales of the affected 8 brands, and stopping the production of these cars and trucks in the U.S. while they figure out the cause.

The pedal assembly is manufactured by an American subcontractor (CTS), who says it is Toyota's problem not theirs, as the company also supplies Honda and Nissan.

It turns out that CTS also supplies GM and Ford. Ford today suspended the production of commercial vans in China, which use the pedals supplied by CTS.

Then, it turns out that Toyota's recall and sales/production suspension was ordered by the Obama administration, specifically by U.S. Transportation Secretary Ray LaHood.

Government Motors, also known as General Motors, is offering $1,000 or zero financing to Toyota owners to switch brands. Nice job, Auto Czar. Ford has decided to join.

Now, Congress has joined the frey. House Energy and Commerce Committee (chairman Henry Waxman, D-CA) will hold a hearing on February 25 "to examine the persistent consumer complaints of sudden unintended acceleration in vehicles manufactured by the Toyota Motor Corporation".

A Congressional hearing??

Toyota today announced additional 1.09 million recall due to floor mat concerns.

Brands recalled:
2009-2010 RAV4
2009-2010 Corolla
2007-2010 Camry
2009-2010 Matrix
2005-2010 Avalon
2010 Highlander
2007-2010 Tundra
2008-2010 Highlander
2009-2010 Venza
2008-2010 Sequoia

Lexus, Scion, Prius are not affected.

Toyota's share price, which was at $91.97 on January 19 before the announcement of recall, plummeted $14 dollars (or 15%) since, and ended today at $77.67.


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