February 23rd, 2010 at 12:09pm
ABC News slams Toyota claiming to be able to recreate electronic throttle malfunction. Executives at the company get hit with subpoenas and support for Toyoda begins to flag. All that and more, plus John McElroy explains why network exposes on the auto industry should be taken with a grain of salt.
Transcript and Story Links after the jump . . .
Here are today’s top headlines. ABC News slams Toyota. I slam ABC. And Akio Toyoda is starting to lose support.
Up next, we’ll be back with the news behind the headlines.
This is Autoline Daily for Tuesday, February 23, 2010. And now, the news.
The Toyota story is reaching a crescendo. Last night ABC News ran a piece on how a college professor, Dave Gilbert at Southern Illinois University, artificially caused a short in a Toyota Avalon’s throttle pedal that induced full-throttle unintended acceleration. And the engine computer did not record any error code, meaning it could not be traced. Toyota says it talked to Gilbert about this, and showed him how it could not cause unintended acceleration. Now Toyota says Mr. Gilbert is causing a different kind of short than what he showed them, and the company says it welcomes the opportunity to evaluate the new procedure themselves with ABC News present to witness the test. I’ll have more to say about this later in the show.
Toyota executives were also hit with subpoenas from a federal grand jury and the Security and Exchange Commission, the Wall Street Journal reports. These things tend to center on improper disclosure and misleading investors. And the Journal also says that support for Akio Toyoda within the company is starting to waver. Employees question if he’s the right executive to lead the company through this crisis.
It was bound to happen sooner or later but experts predict gas prices will reach over $3 a gallon this summer in the U.S. According to the AP, it’s not being driven up by consumption instead it’s the cost of crude oil that is driving up the price of gas due to its high demand around the globe.
Tengzhong, the Chinese company attempting to acquire Hummer from GM, may try to buy Hummer through an offshore investment party. According to Reuters, the acquisition needs approval from the Chinese government but it says it has never received an application from Tengzhong. The deadline to buy Hummer has already been pushed back once from January to the end of this month. If Tengzhong doesn’t get approval it could try to buy Hummer through an offshore investment as long as production remained outside of China because it needs government approval to build a new plant.
GM announced that current board member Steve Girsky, has been appointed to vice chairman of corporate strategy and business development. Girsky will be responsible for corporate strategy, business alliances, new business development, and other related areas. The appointment is effective March 1. The company also announced that John Smith, vice president of corporate planning and alliances, will retire. He will remain as an advisor to CFO Chris Liddell until the end of the year.
Network television has a history of producing fraudulent reports when it comes to automotive safety. And ABC News could be continuing that tradition. More after the break.
As we reported at the top of the show, last night ABC News ran a report showing how a college professor had rigged up a Toyota Avalon so he could induce a short that would cause unintended acceleration. ABC News had no input or rebuttal from Toyota. It left their side out altogether. That alone should make you suspicious.
We’ve seen instances in the past when investigative reports from network television ginned up tests that looked damning, but later turned out to be fraudulent. 60 Minutes on CBS famously found some automotive expert who could cause an Audi to experience unintended acceleration. But he had to disassemble the transmission and weld parts shut to make it happen—something that would never occur on its own in the real world.
The news program Dateline on NBC even more famously rigged up a Chevy pickup with explosives to make it “blow up real good” in front of the cameras. GM hired investigators who ultimately found that the Dateline test was nothing but a fraud.
Last night, ABC also featured Sean Kane of Safety Research and Strategies, on its report of the Avalon’s unintended acceleration. He was presented as a safety advocate, but Mr. Kane makes his living by selling data and information to plaintiff attorneys, the very people who are going to try and make themselves fabulously wealthy suing Toyota. Sean Kane has a vested interest in seeing Toyota sued, but ABC never mentioned that.
It could turn out that Toyota does indeed have an electronics problem. But don’t jump to conclusions based on last night’s report from ABC News.
And that’s it for today’s top news in the global automotive industry. Thanks for watching, we’ll see you next tomorrow.