Toyota Faces Criminal Investigation Over Steering Rods

Grand jury probe follows ABC News report on delay in steering rod recall.

July 20, 2010 — -- Toyota has confirmed that it is the subject of a criminal investigation by a federal grand jury in New York, which has subpoenaed documents about possible steering rod defects.

Toyota spokeswoman Celeste Migliore said a subpoena was issued on June 29 for documents "related to defective, broken and/or fractured steering relay rods." "[Toyota Motor Corp.] and its subsidiaries intend to cooperate with the investigation," said Migliore, "and are currently preparing their response."

The criminal probe follows an ABC News report that Toyota waited almost a year to recall vehicles in the U.S. with defective steering rods, despite issuing a similar recall in Japan in October 2004. Spurred in part by an inquiry by ABC over the issue, the National Highway Traffic Safety Administration (NHTSA) is also conducting its own inquiry, reviewing new information suggesting that Toyota knew of complaints over breaking steering rods in the U.S. prior to 2004.

The new cases emerged during a lawsuit filed against Toyota by the family of 18-year-old Levi Stewart of Fairfield Idaho, who was killed when his Toyota truck rolled over. Stewart's family blamed the crash on a defective steering rod and says the accident could have been prevented if Toyota had issued the recall in a timely manner.

"Today's news does not surprise us," said John Kristensen, the attorney representing the Stewart family. "We have always contended that Toyota knew Americans were getting in accidents because their defective steering relay rods broke before the Japan only recall of 2004.Toyota misled NHTSA and the American public when they claimed they had no similar information from the U.S. market."

During discovery in the case, Toyota turned over 40 previously undisclosed cases where American owners had complained directly to Toyota about steering rod problems before October 2004.

The fact that a grand jury is now investigating the matter, in addition to the NHTSA probe, underscores the seriousness of Toyota's potential misconduct, said former NHTSA administrator Joan Claybrook. "It's very rare there's a grand jury investigation involving a safety defect of a motor vehicle. This is a very important development because it shows some prosecutors thought that Toyota's actions were so outrageous they deserved possible criminal indictment."

In October, 2004 Toyota issued a recall in Japan of 330,000 vehicles to replace the steering relay rods, which were prone to breaking under stress. At the time of the Japanese steering rod recall, a Toyota official in Washington, D.C., Christopher Tinto, told NHTSA that a recall in the U.S. was unnecessary because it had no reports of similar problems in this country, and that driving conditions were different in Japan. However, in a deposition for the Stewart court case, Tinto conceded under oath that the U.S. complaint information was kept from him by company executives in Japan.

Toyota did not issue a steering rod recall in the U.S. until September of 2005, when it acknowledged that the rods were defective. The U.S. recall affected older models of the Toyota T100 pickup truck (model years 1993-98), Toyota 4Runner (1989-95) and the Toyota Truck (1989-95).

Levi Stewart's accident took place in 2007 on a country road outside Fairfield, Idaho. Levi's father Michael was one of the volunteer firemen who responded to the scene.

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"When we got there, the devastation was just more than you could handle," said Michael Stewart.Three months after Levi's death, a long-delayed recall notice from Toyota arrived in the mail at the Stewart home. In the worst case, the notice said, the steering relay rod might fracture, causing a loss of vehicle steering control and thus increasing the possibility of a crash.

"That immediately explained how the wreck happened," said Michael Stewart. "I was just shocked. How could they wait so long to send out a recall on something so important?"

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